Morning Report

September 21, 2022

“The dollar rallied against six major peers, hitting a two decade high after Russian President Vladimir Putin mobilises more troops for Ukraine and accuses the West of nuclear blackmail.”

Sam Cornford, Partner – Head of Trading

Main Headlines

Joe Biden will use his speech at the United Nations today to rally the world to stand firm in the face of Russian plans to hold referendums in occupied parts of Ukraine and possibly introduce widespread conscription, which the US described as signs of desperation unlikely to halt Ukrainian military gains. Biden will seek the broadest possible support for Ukrainian resistance at the UN general assembly by depicting it as a direct violation of the UN’s founding charter and will make new announcements about the US funding of measures to address global food insecurity, caused in part by the Russian invasion, which has threatened developing countries with famine.

UK businesses will be protected from soaring energy bills under an emergency government scheme that ministers hope will prevent a wave of corporate collapses. The support scheme, to be set out on Wednesday by the government, will cap the wholesale costs that energy suppliers can incorporate into businesses’ bills but will not determine the final rate paid by corporate customers. Prime minister Liz Truss this month announced a huge energy support package costing about £150bn under which the government pledged to help UK households and companies with surging gas and electricity bills.


Sterling is stronger against euro and weaker against the dollar this morning. Liz Truss has declared that cutting taxes for the wealthy and profitable companies is not “unfair,” signalling a radical shift in economic policy ahead of a growth-focused mini-Budget on Friday. The UK prime minister has signed off plans to cut national insurance, a policy that will disproportionately help the better-off, reverse a planned rise in corporation tax and lift a cap on bankers’ bonuses. Liz Truss will announce a new UK defence and foreign policy review today to take account of Russia’s invasion of Ukraine and the threat posed by authoritarian regimes.


Euro is weaker than most major currencies in the early morning trade. Vladimir Putin said Russia’s armed forces would call up its reserves immediately to support its invasion of Ukraine and indicated Moscow would probably annex large swaths of Ukrainian territory. Carlo De Benedetti has warned that Italy risks shifting its alliances to eastern European countries with rightwing governments if the hard-right emerges as the winning coalition in this week’s general election. The German government will nationalise utility Uniper, with the bailout for the country’s largest gas importer ballooning to €29bn after it was brought to the brink of insolvency.


The dollar is well bid against most major currencies overnight. The Bank of Korea has denied that it will announce a currency swap arrangement with the US Federal Reserve, as the Korean won continues its slide against the dollar to the lowest levels since March 2009. US real yields, the returns investors can expect to earn from long-term government bonds after accounting for inflation, have soared to the highest level since 2011, further eroding the appeal of stocks on Wall Street. US President Joe Biden will urge Prime Minister Liz Truss to work with the EU to resolve tensions around post-Brexit trading arrangements in Northern Ireland.


Treasuries, gold and the dollar led gains in haven assets after Russian President Vladimir Putin stepped up his war against Ukraine, rattling markets that were already bracing for a super-sized rate hike from the Federal Reserve. The euro fell and oil jumped as investors reacted to Putin’s vow to use all means necessary to defend the “territorial integrity of Russia.” European and US stocks futures fell, following Asian equities that were well in the red from the open. A dollar gauge traded near a record high amid the market jitters. The offshore yuan fell to the lowest against the greenback since mid-2020.

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

8:00 a.m.: UK Aug. public finances
8:00 a.m.: Sweden Aug. unemployment rate
9:00 a.m.: ECB’s Guindos speaks
10:00 a.m.: Poland Aug. retail sales
11:00 a.m.: Sweden sells bonds
11:30 a.m.: Germany sells bonds
11:30 a.m.: Portugal sells bills
12:00 p.m.: UK Sep. CBI trends total orders, selling prices
4:30 p.m.: EIA US crude inventory report
8:00 p.m.: Fed rate decision
8:30 p.m.: Fed’s Powell holds press conference


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