Morning Report

September 20, 2021

“The dollar and the yen strengthened in Asian trading, against the backdrop of China Evergrande’s debt crisis. The greenback’s rise is linked to a reduced appetite for risk dented as investors awaited this week’s Federal Reserve FOMC Meeting.”

Tim Hallinan, Trading Director

Main Headlines

Scientific advisors to the US Food and Drug Administration have voted against Pfizer’s application to offer a third shot of its Covid-19 vaccine to everyone over 16, creating a serious obstacle for the Biden Administration who had planned a widespread booster programme to limit the surge in the Delta variant across the country. The regulators advisory committee voted 16 votes to 2 votes against endorsing a booster shot of the BioNTech/Pfizer vaccine for US citizens aged over 16. There is still potential that Pfizer’s application to rollout a third booster shot will be accepted if they comply with the rules set out in the FDA’s recommendations.

The UK’s largest energy suppliers are requesting a multibillion-pound emergency support package from the government to help them survive the crisis sparked by high gas prices, including the creation of a bad bank to absorb potentially unprofitable customers from failing rivals. Business Secretary, Kwasi Kwarteng, held emergency talks with regulator Ofgem on Sunday and was due to meet energy suppliers face-to-face on Monday, amid fears that dozens of smaller companies could go bust in the weeks to come because of higher costs of natural gas and electricity. Contingency plans are being considered at BEIS and Ofgem to prevent business failures.


Sterling is lower against most majors overnight. Boris Johnson to use UN General Assembly visit to push for global climate commitments ahead of COP26 summit. The PM gave his chances of securing $100bn in annual climate aid as “6 out of 10” as he arrived in New York to galvanise wealthier economies to step up to the plate. This follows over 100 UK businesses such as Unilever, BT and Santander asking the PM to show leadership on climate change in a “limited window”. A report issued by the Resolution Foundation on Monday, points to job satisfaction remaining steady in the United Kingdom over the last thirty years. Overall, 54% of employees said they were satisfied with their jobs in the decade up to 2019.


The euro is higher against sterling and lower against the dollar in early morning trade. Germany’s Social Democrats, the SDP and its leader Olaf Scholz are in poll position heading into the final week ahead of Germany’s election campaign. It now looks increasingly likely that Angela Merkel’s CDU will exit government to be replaced by Germany’s first centre-left government for 16 years. Washington and Brussels continue to work towards a transatlantic data deal, following the European Court of Justice’s decision to annul the so-called Privacy Shield agreement in July 2020. Washington claims a deal is close, whilst the European Commission has suggested there is a long, long way to go.


The dollar is higher against most major currencies overnight. The US military said a drone strike it launched on August 29 killed 10 civilians, including up to 7 children, reversing its initial claim that it had hit an “imminent ISIS-K threat” to Kabul airport. The mistake came after ISIS-K killed 13 members of the US military at Kabul Airport. The Commander of US Central Command, apologised for a “tragic mistake”. Democrat senator, Joe Machin, has emerged as a key swing vote on climate legislation, as well as President Biden’s $3.5 trillion budget bill. Joe Manchin chairs the Senate energy panel and earned over $500,000 from coal production last year.


US equity futures and Asian stocks fell Monday amid a slump in Hong Kong property developers and jitters before a Federal Reserve meeting that’s expected to hint at moving toward paring stimulus. U.S. and European contracts dropped after the S&P 500 slid the most in a month, a test for the buy-the-dip mentality as the gauge jabs at its 50-day moving average. Hong Kong shares tumbled on growing concern about China’s crackdown on the real-estate sector. The offshore yuan declined. Australia’s stocks and currency weakened as iron ore extended losses below $100 a metric ton. Ten-year Treasury yields have risen ahead of the Fed meeting this week where policy makers are expected to start laying the groundwork for paring stimulus. Japan and China were among key Asian markets closed for holidays.

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

8:00 a.m.: Germany August PPI

11:00 a.m.: Cyprus to sell bills

11:30 a.m.: Germany to sell bills

11:30 a.m.: Netherlands to sell bills

12:00 p.m.: Ireland July trade balance

12:35 p.m.: ECB’s Schnabel speaks in Riga conference

1:00 p.m.: Swedish Parliament debates budget proposal

2:50 p.m.: France sells bills

7:00 p.m.: ECB’s Villeroy speaks in Paris

Corporate Events

Earnings include Lennar, GCL-Poly Energy, Osram Licht


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