Morning Report

April 19, 2023

“Global stocks eased this morning and the dollar strengthened further from its one-year lows with investors shifting their attention to the potential measures the Federal Reserve may implement to curb inflation.  Sterling strengthened in early trade on the back of hotter than expected UK inflation data.”

Tim Hallinan – Trading Director

Main Headlines

In the UK, inflation remained in double digits in March, with annual price rises reaching 10.1%, higher than the expected 9.8%. Although petrol and diesel prices decreased, the rising costs of food, recreation, and culture contributed to the persistent inflationary pressure. The Bank of England had been closely monitoring these figures as they were the last significant data release before their next meeting in May. However, core inflation, which excludes food and energy prices, remained unchanged at 6.2%, posing concerns for the central bank.

Netflix’s performance in the first quarter of the year fell short of Wall Street expectations, as the streaming giant added only 1.75 million customers, compared to the anticipated 2.41 million. This has raised concerns about the future of the popular TV network. The company also forecasted lower sales and profit for the current quarter and delayed its plan to crack down on password sharing in the US. As a result, Netflix’s shares dropped as much as 12% in after-hours trading, marking the second consecutive year of a shaky start for the streaming giant.


Sterling is well bid against most major currencies this morning. Central London property prices experienced the largest annual fall in three and a half years, dropping almost 5% in the 12 months to March. The UK’s weak economic outlook and fears of further decline in the housing market deterred wealthy buyers from committing to deals. While pressures in the UK labour market are easing, wage growth has not slowed as much as economists anticipated, with average wages in the private sector, excluding bonuses, rising by 6.9% in the three months to February compared to a year earlier, down from 7.3% growth in the final quarter of 2022, according to official data.


Euro is weaker than most major currencies in the early morning trade. Sumitomo Mitsui Financial Group became the first major Japanese bank to sell additional tier-1 debt, totalling $1.04 billion, since the value of similar bonds issued by Credit Suisse was wiped out. In Germany, the EVG union announced a nationwide transport strike for Friday, impacting 50 companies including national rail operator Deutsche Bahn. The strike will last from 3 am to 11 am, according to the railway and transport union. Russia accused Ukraine of sabotaging the Black Sea grain deal by demanding bribes from ship owners to register new vessels.


The dollar is stronger against euro and weaker against sterling this morning. Dollar stores, which are known for catering to budget-conscious shoppers, are undergoing a makeover as inflation drives more middle-income consumers to their doors. The industry’s largest chains, Dollar General and Dollar Tree, have announced plans to remodel almost twice as many stores as they will open this year, with increases of 11.4% and 25.6% from last year, respectively. Credit-default swap prices may already be showing signs of concern, as worries about the US debt ceiling loom in the near future.


Stocks in Europe retreated along with US equity futures, while bond yields rose as yet another a hot inflation print in the UK brought price pressures back in focus ahead of data for the euro region. The Stoxx Europe 600 index slipped 0.2% at the open, with the technology sector leading the decline. ASML Holding NV dropped more than 3% after the Dutch chip maker after reporting results that raised concerns about the demand outlook. Contracts on the rates-sensitive Nasdaq 100 fell about 0.5%, while those on the S&P 500 were down 0.3% ahead of the next swathe of US bank earnings reports.

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

8:00 a.m.: UK March CPI, RPI
8:00 a.m.: EU March Car Registrations
9:00 a.m.: SNB’s Maechler speaks
9:00 a.m.: Czech March CPI
10:00 a.m.: ECB Feb. Current Account
10:00 a.m.: South Africa March CPI
11:00 a.m.: Euro-area March CPI
11:30 a.m.: Germany to sell bonds
12:30 p.m.: UK to sell bonds
12:35 p.m.: ECB’s Lane speaks
1:00 p.m.: ECB’s Knot speaks
1:00 p.m.: South Africa Feb. Retail Sales
4:25 p.m.: ECB’s de Cos speaks
6:00 p.m.: SNB’s Schlegel, ECB’s Schnabel speak
Informal meeting of EU environment ministers
ECB Governing Council Non-Policy meeting

Corporate Events

Earnings include ASML, Morgan Stanley, Heineken, Abbott, Baker Hughes, Tesla, IBM, Las Vegas Sands, Alcoa, Kinder Morgan


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