Morning Report

September 23, 2022

“The Bank of England has said that Britain’s economy is now in recession, as it hiked rates by 50bps for the second meeting in-a-row to tackle the worst bout of inflation for 40 years. The meeting statement indicated the BoE maintains a hawkish bias.”

Sam Cornford, Partner – Head of Trading

Main Headlines

In a major action to address climate change, the Senate ratified an international agreement that compels the United States and other countries to limit use of hydrofluorocarbons, highly potent greenhouse gases commonly used in refrigeration and air conditioning that are far more powerful than carbon dioxide. The so-called Kigali Amendment to the 1987 Montreal Protocol on ozone pollution requires participating nations to phase down production and use of hydrofluorocarbons, also known as HFCs, by 85% over the next 14 years, as part of a global phaseout intended to slow climate change.

UK consumer confidence has fallen to another new low amid deep concerns about personal finances over the coming year. GfK’s long-running consumer confidence index fell five points in September to minus 49. The latest record low is the fourth out of the last five months, with confidence in personal finances over the coming year down nine points to minus 40 and confidence in the economy over the next 12 months down eight points to minus 68. The major purchase index, an indicator of confidence in buying big ticket items, remained unchanged at minus 38, but is 32 points lower than this time last year.


Sterling is weaker than most major currencies in the early morning trade. Chancellor Kwasi Kwarteng has announced that April’s National Insurance hike is to be reversed from 6 November. The 1.25 percentage point increase was introduced under former chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it. The UK government has introduced a new Bill designed to remove the special features of EU law that remain in the UK legal system. Ministers are setting up a £500m emergency fund to get thousands of medically fit patients out of hospital as soon as possible in an attempt to prevent the NHS becoming overwhelmed this winter.


Euro is stronger against sterling and weaker against the dollar this morning. The downturn in German business activity deepened in September as higher energy costs hit Europe’s largest economy and companies saw a drop in new business. Vladimir Putin was “pushed” into the war on Ukraine to install a new government in Kyiv, former Italian premier Silvio Berlusconi said late on Thursday, in comments likely to concern Western allies ahead of Italy’s election. Finland is considering barring most Russians from entering as traffic arriving from its eastern neighbour “intensified” following Putin’s order for a partial military mobilisation.


The dollar is well bid against most major currencies overnight. Apple is facing additional pressure from US Senators as lawmakers in the chamber have asked members of the intelligence community to examine if a deal between the tech giant and Chinese memory chip maker Yangtze Memory Technologies poses national security concerns. US House Democrats released a framework for legislation that would restrict lawmakers and other senior government officials from trading in stocks. New York City will open two emergency centers to house migrants arriving on buses sent by the Republican governor of Texas in a political dispute over border security.


Stocks and US equity futures extended declines at the end of a week that underscored expectations for tighter monetary policy and a slowing global economy. Energy shares led a drop in Europe this morning as oil headed for a fourth weekly loss. The MSCI Asia Pacific Index was set for a sixth weekly decline, the longest streak since May, after the S&P 500 Index closed at the lowest level since June. Strategists are giving up on a year-end rally for European stocks as Goldman Sachs Group Inc. slashed its year-end target for the S&P to 3,600 from 4,300, arguing that a dramatic shift in the outlook for higher interest rates will weigh on valuations.

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

9:00 a.m.: Spain 2Q GDP
9:15 a.m.: France Sept. Manufacturing and Services PMIs
9:30 a.m.: Germany Sept. PMIs
10:00 a.m.: Euro-area Sept. PMIs
10:00 a.m.: ECB’s Kazaks speaks
10:30 a.m.: UK Sept. PMIs
3:45 p.m.: US Sept. PMIs
7:00 p.m.: Baker Hughes US rig count
UK mini budget to be presented

Corporate Events

Earnings include Smiths Group


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