Morning Report

September 13, 2022

“The dollar decline continues this morning, having reached two-decade high last Wednesday. All eyes on the US CPI inflation data for August, with an actual  figure above the estimated likely to validate market expectations for a 75bp increase by the Fed next week.”

Sam Cornford, Partner – Head of Trading

Main Headlines

The Biden administration yesterday urged railroads and unions to reach a deal to avoid a shutdown of the rail system, saying it would pose “an unacceptable outcome” to the US economy. Earlier, the US Chamber of Commerce called for “urgent action” in railroad labour negotiations to avoid a strike and a “national economic disaster” that could cost $2 billion a day. Unions and railroads have until a minute after midnight on Friday to reach tentative deals with unions representing about 60,000 workers.

UK Chancellor of the Exchequer Kwasi Kwarteng has told Treasury officials to adapt to a new approach focused on boosting annual economic growth to 2.5%, as he prepares to unveil a tax-cutting mini-Budget next week. University students face a disrupted start to the new term, after the University and College Union yesterday announced 10 days of walkout in a dispute over pay. A rise in part-time work drove employment among Britons over the age of 65 to a record high of almost 1.5 million in the second quarter of 2022, the Office for National Statistics said yesterday.


Sterling is well bid against most major currencies overnight. UK unemployment has plunged to its lowest level since 1974 as more people dropped out of the workforce. The unemployment rate fell to 3.6pc between May and July, down from 3.8pc in the previous quarter, according to the Office for National Statistics. The decline was driven by a sharp increase in the number of people classed as economically inactive or not looking for jobs.


Euro is stronger against the dollar and weaker against sterling this morning. The European Union is set to propose a mandatory target to cut power use, a step toward rationing, along with measures to funnel energy company profits to struggling consumers as it tries to stem the crisis. Natural gas prices fell as the EU started outlining details of its intervention into an unprecedented energy crisis. Power prices also slumped. The EU is seeking to curb power consumption and provide liquidity to energy markets as it seeks to prevent the crisis from engulfing the broader economy. Still, prices remain almost eight times higher than normal for the time of year.


The dollar is weaker than most major currencies in the early morning trade. Goldman Sachs is planning on cutting several hundred jobs this month, making it the first major Wall Street firm to rein in expenses amid a collapse in deals volume. The bank is reinstating a tradition of annual employee culls, which have historically targeted between 1% and 5% of lower performers, in positions across the firm. At the lower end of that range, which is the size of the expected cull, that means several hundred job cuts at the New York-based firm, which had 47,000 employees at midyear.


The pan-European Stoxx 600 was up 0.2% in early trade, with food and beverage stocks adding 0.9% to lead gains while retail stocks slid 1.3%. The inflation report is one of the last pieces of data on inflation the US Federal Reserve will see ahead of its September meeting, where the central bank is expected to deliver its third consecutive 75bp rate hike to combat high inflation. On Wall Street, the S&P 500 jumped by 1.1%. Meanwhile, benchmark sovereign bond yields were little changed in the US, Eurozone, and UK. Elsewhere oil prices rose by over 1% climbing to $94 per barrel.

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

8:00 a.m.: Germany Aug. CPI
8:30 a.m.: Switzerland Aug. producer & import prices
9:00 a.m.: Spain Aug. CPI
9:00 a.m.: Turkey July industrial production
10:00 a.m.: Czech Republic July current account monthly
11:00 a.m.: Germany Sept. ZEW survey
2:00 p.m.: Poland July current account balance, trade balance
2:30 p.m.: US Aug. CPI
The 77th UN General Assembly opens in New York, through Sept. 27
OPEC publishes monthly oil market report

Corporate Events

Earnings include Acron, Core & Main
Twitter holds a special shareholder meeting to vote on its sale to Elon Musk


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