Morning Report

October 25, 2022

“Rishi Sunak will be the UK’s next Prime Minister, with current Chancellor Hunt expected to remain in place – investors now await the much-anticipated fiscal statement, which is still due to go ahead next Monday. Meanwhile, the US dollar eased against its peers this morning after data showed that US business activity is contracting for a fourth straight month in October, indicating that the world’s biggest economy is slowing down in the face of high inflation and rate hikes.”

Tim Hallinan – Trading Director

Main Headlines

US authorities have charged two Chinese intelligence officers with seeking to obstruct the criminal prosecution of Huawei, in one of three cases announced on Monday that government officials say shines a light on Beijing’s “flagrant violation of international laws.” In court filings, the Department of Justice alleged two Chinese citizens paid a US law enforcement officer $61,000 in bitcoin to obtain information on the prosecution and probe against a big Chinese telecoms company. While the company was not named, details in the legal documents match Huawei’s description.

Energy suppliers are set to force vulnerable British households to switch to expensive prepayment electricity and gas meters at a rate of 10,000 meters a month by the end of 2022, as consumers fall behind with regular payments. Data from the energy regulator Ofgem showed the number of prepayment meters fitted in homes rising on a quarterly basis for the first time since 2019, despite government intervention aimed at shielding families from soaring wholesale gas and power prices.


Sterling is well bid against most major currencies overnight. Britain’s business leaders urged Rishi Sunak to put an end to the government’s “flip-flopping” and chaos of recent months and get a grip on the pressing issues facing the economy. Royal Bank of Canada is planning a push into the UK’s commercial banking market potentially through an acquisition and will look for opportunities to expand in wealth management. Markets remain “febrile,”and the medium-term fiscal plan set for next Monday will be crucial for investor clarity over the UK’s fiscal policy and wider economic context.


Euro is weaker than most major currencies in the early morning trade. The ECB is searching for ways to stop banks profiting unduly as it hikes rates. The issue concerns about €2.1 trillion of ultra-cheap loans granted at the height of the pandemic to keep credit flowing. They’ve since become a headache as banks can park the proceeds at the ECB and earn interest that exceeds their costs. The ECB may act when it meets this week. European Union energy ministers will discuss a bloc-wide gas price cap today, attempting to navigate their next steps although it is likely to be weeks before any final decisions.


The dollar is stronger against euro and weaker against sterling this morning. US President Joe Biden has said “it matters” and is “pretty astounding” that Rishi Sunak is set to become the UK’s first British Asian prime minister. A group of liberal Democrats in the US Congress is pressing President Joe Biden to pursue direct talks with Russia’s leader Vladimir Putin, opening a new front of pressure on his Ukraine strategy as his administration tries to maintain domestic support for Kyiv. Some Americans could pay up to $130 to get a COVID-19 vaccine made by Pfizer starting in 2023, but most will still get it for free.


Stocks in Europe gained, and equity-index futures were steady as mostly positive earnings reports buoyed sentiment. Treasury yields dipped for a second day. The Stoxx Europe 600 Index added about 0.4% at the open, led by the technology and media sectors. Software developer SAP SE added 3.5% after a third-quarter revenue beat. Futures on the S&P 500 and Nasdaq 100 fluctuated between small gains and losses after Monday’s strong performance on Wall Street. A fifth of S&P 500 companies have now posted third-quarter earnings, with more than half outperforming estimates.

Main Economic Data/Central Banks/Government (All Times CET)

8:00 a.m.: Sweden Sept. PPI
9:00 a.m.: Spain Sept. PPI
10:00 a.m.: Germany Oct. Ifo Survey
10:00 a.m.: ECB publishes bank lending survey
10:30 a.m.: Australian budget
10:55 a.m.: BOE’s Huw Pill speaks
1:00 p.m.: ECB’s Centeno speaks
2:00 p.m.: Hungary Central Bank Decision
6:00 p.m.: SNB’s Schlegel speaks
Future Investment Initiative conference starts in Riyadh, through Oct. 27
IAEA holds meeting of ministers responsible for nuclear energy in Washington, through Oct. 28
WNBA player Brittney Griner is due to appear in a Russian court to appeal her drug conviction

Corporate Events

Earnings include Chubb, Orange, Spotify, ASM International, Norsk Hydro, Microsoft, Alphabet, Visa



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