Morning Report

September 10, 2021

“Yesterday’s data on jobless claims – which hit an 18 month-low – reminded market participants that the growth in employment is held back by labour shortages. The dollar has climbed back from earlier sell-off by the end of this week, with Fed officials making taper-confident statements despite the worrying signals on jobs. Meanwhile, Europe displayed confidence in recovery, with the ECB announcing the trimming of emergency bond purchases over the coming quarter, even though they refused to call it tapering.”

Sam Cornford, Partner and Head of Trading

Main Headlines

The Biden administration will demand that US companies force employees to be vaccinated against Covid-19 or submit to weekly testing. The new measures are Biden’s response to a resurgent Covid-19 pandemic driven by the delta variant of the virus and by tens of millions of Americans who have refused to be vaccinated. Federal employees who don’t comply could be dismissed, the administration said, and private employers might be fined. In total, officials said the mandates — including an expansion of vaccine requirements for healthcare workers — applied to about 100m people, or about two-thirds of the US workforce.

The UK economic rebound slowed in July as consumers spent less in stores and a shortage of raw materials hit the construction sector. Gross domestic product expanded just 0.1%  – a tenth of the pace posted in June, the Office for National Statistics said Friday. Economists surveyed by Bloomberg had expected 0.5% growth. The slowdown heralds a return to more normal growth rates after pent-up demand following the lifting of restrictions in the spring saw the economy surge by almost 5% during the second quarter. The services sector had no growth overall, with rises in IT, financial services and outdoor events offsetting large falls in retail and legal services.


Sterling is stronger versus most major currencies this morning. Restrictions imposed during the coronavirus pandemic preventing businesses serving winding-up petitions against debtors will ease from the end of September, the UK government said on Thursday. Companies can start using the legal instrument to pursue unpaid bills from next month but only for debts of more than £10,000 compared with the pre-pandemic threshold of £750. Elsewhere, FCA and PRA wrote to banks ordering them to conduct a full financial crime risk assessment of their trade finance businesses.


The euro is higher against the dollar and lower against the pound overnight. After a two-day meeting of its governing council, the ECB said on Thursday it had decided to move to “a moderately lower pace” in its €1.85tn pandemic emergency purchase programme from the €80bn-a-month level it has run at since March. Christine Lagarde said “the lady isn’t tapering” to reassure bond investors. Germany’s ruling centre-right has stepped up its election campaign rhetoric against opponent Olaf Scholz, attacking the frontrunner to succeed Angela Merkel as chancellor over his policies on Europe.


The dollar is weaker against most majors in the early morning trade. Democrats have included a provision in their $3.5 trillion healthcare, education and climate bill that would require companies without retirement plans to automatically enroll workers in individual retirement accounts. The Justice Department sued Texas Thursday to block a new state law banning most abortions, saying it was enacted “in open defiance of the Constitution.” Joe Biden has held his second call with Chinese leader Xi Jinping since becoming president in an effort to break an impasse in the Sino-US relationship after previous top-level meetings produced little progress.


A Hong Kong gauge of Chinese tech names jumped more than 2% in the wake of a clarification by a newspaper that China has slowed rather than frozen new game approvals, the latest twist in Beijing’s regulatory crackdown. Traders were also evaluating a telephone call between President Joe Biden and China’s Xi Jinping to see if the increasingly adversarial relationship between the two sides could be repaired. The Shanghai Composite Index was on track for the highest close since 2015 and the offshore yuan ticked higher. The S&P 500 overnight posted its longest losing streak since June, hurt by concerns about slower economic reopening due to the delta virus strain. Treasuries trimmed gains. Oil pared a weekly loss and a broad rally in base metals gathered steam.

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

8:00 a.m.: Norway August CPI

8:00 a.m.: Germany August CPI

8:00 a.m.: U.K. July GDP, industrial production, trade balance

8:45 a.m.: France July industrial production

10:00 a.m.: ECB’s Villeroy speaks

10:00 a.m.: Italy July industrial production

11:00 a.m.: Italy Istat releases monthly economic note

11:30 a.m.: ECB’s Lagarde speaks

12:00 p.m.: U.K. to sell bills

12:10 p.m.: ECB’s Elderson speaks

12:30 p.m.: Bank of Russia key rate announcement

6:00 p.m.: Russia preliminary 2Q GDP

S&P to rate Austria, Luxembourg, Malta and Portugal sovereign debt

ECB’s Rehn, Fed’s Mester Speak at monetary policy conference, 09/10 – 09/11

Corporate Events

Earnings include Kroger

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