Morning Report

July 19, 2021

“The dollar continues to sit near a three-month high, lending stability to investors opting for safety amidst the surging Delta variant. Nerves have also characterized sterling’s trend across the Atlantic, as the currency drops to reflect investors’ concerns about the lifting of Covid-19 restrictions.”

Sam Cornford, Partner & Head of Trading

Main Headlines

Republicans in the House of Representatives outraise Democrats in a funding battle ahead of the US mid-term elections. Data from the National Republican Congressional Committee, which raises funds to elect Republicans to the lower chambers of Congress, reported bringing in more than $45mn in the second quarter of 2021 in donations. In contrast, the Democratic Congressional Campaign Committee, supporting Democrat candidates to get elected, raised $36.5mn in the second quarter of the year. Several corporations did withdraw donations, but the January 6 riots appear not to have dented GOP fundraising.

The UK is set to ease Covid-19 and social distancing restrictions further today, on so-called ‘Freedom Day’ for the country. This comes amid an embarrassing U-Turn for Boris Johnson and Rishi Sunak who will now be self-isolating after being contact traced from an encounter with Sajid Javid, the Home Secretary who tested positive. Johnson and Sunak had planned not to self-isolate as part of a pilot scheme assessing the necessity of isolation measures. The number of cases continues to rise across the country, reaching 48,161 daily cases on Sunday, a worrying rise despite 68.3% of adults in the UK having received both vaccinations.


Sterling is lower against most majors overnight. Across the first eight months of the current school year, the number of children registering for home education in the UK rose by 75% across the country, with the numbers as high as 92% in the North-West of England due to “Covid-anxiety”. UK ministers are looking to fund a large nuclear power plant at Sizewell on England’s east coast via a “regulated asset base” model. Money would be raised via a surcharge on energy bills for consumers regardless of suppliers, causing outrage amongst green energy suppliers.


The euro is higher against the sterling and lower against the dollar in early morning trade. The European Commission is set to unveil its anti-money laundering package tomorrow, establishing a new Anti-Money Laundering Authority. This will be a brand-new body with the powers to directly supervise companies and impose fines of millions of euros where money laundering is detected. A rule of law report is to be reviewed by the European Commission on Monday, which will stoke tensions between Brussels, Poland and Hungary, with the latter nations refusing to budge on anti-LGBTQIA+ legislation in their countries.


The dollar is well-bid against most majors overnight. US consumers remain increasingly worried by rising inflation, following inflation figures of 5.4% in the US economy reported in June. Retail sales increased in June by 0.6% according to data released by the US Census Bureau but consumer sentiment took a hit due to soaring prices. Joe Biden appears set to appoint Jane Hartley as Washington’s Ambassador to the United Kingdom. Previously, Hartley has served as US Ambassador to France during Barack Obama’s second term. Other candidates for the position include Mike Bloomberg, Colin Powell and Ted Kaufman.


Stocks and U.S. equity futures fell Monday and Treasuries edged up on concerns about the possible economic fallout of Covid-19 outbreaks and elevated inflation. Oil slipped after an OPEC+ supply deal. MSCI Inc.’s gauge of Asia-Pacific shares hit the lowest in about a week, with Japan and Hong Kong underperforming and technology stocks struggling. European, S&P 500 and Nasdaq 100 futures dropped after the S&P 500 pulled back for the first week in four. The rally in Treasuries continued, sending 10-year yields further below 1.3%. The yen and the dollar ticked up amid cautious sentiment. Oil slid after an OPEC+ agreement to boost output into 2022 resolved a bitter internal spat.

Main Economic Data/Central Banks/Government (CET)

9:00 a.m.: Turkey July Consumer Confidence

11:00 a.m.: Euro-Area May Construction Output

11:30 a.m.: Germany sells bills

12:00 p.m.: BOE’s Haskel speaks

2:50 p.m.: France sells bills

England lifts Covid restrictions

Jordan’s King Abdullah II meets Biden at the White House

South Africa’s Zuma appears in court

Corporate Events

Earnings include IBM, Assa Abloy


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