Morning Report

March 2, 2023

“The main data release for today is the flash reading of Eurozone inflation for February. The general expectation is that the overall rate will decrease from 8.6% to 8.2%. However, there is a possibility that this projection could be surpassed, as recent data from Spain, France, and Germany suggests inflation may be higher than anticipated. The core inflation rate is predicted to remain stable at 5.3%.”

Sam Cornford, Partner – Head of Trading

Main Headlines

The US House Foreign Affairs Committee voted along party lines to grant President Joe Biden the power to ban TikTok, which is owned by ByteDance, in what could be the most extensive restriction on any social media app in the US. The committee voted 24 to 16 in favour of the measure, which would give the administration new powers to ban the app and other apps deemed as security risks. Democrats opposed the bill, arguing that it needed more deliberation and consultation with experts.

The UK government is allegedly harming the competitiveness of the UK energy market by giving interest-free loans worth billions of pounds to Octopus Energy for acquiring failed power supplier Bulb. Centrica, Eon, and Scottish Power, owned by Iberdrola, are challenging the High Court’s decision to sell temporarily nationalized power company Bulb to Octopus, alleging that they were not given the same level of government support during the sales process.


Sterling is weaker than most major currencies in the early morning trade. Jack Dorsey’s tech firm, Block, is investing £2mn in a not-for-profit lender based in Birmingham that provides business loans throughout the West Midlands. Meanwhile, a poll conducted on behalf of an environmental and public safety alliance revealed that about two-thirds of UK businesses believe that government plans to untangle British and EU law will cause more uncertainty and not increase economic growth.


Euro is stronger against sterling and weaker against the dollar this morning. As inflation unexpectedly rose in several eurozone countries, top three shareholders of the European Central Bank, Germany, France, and Italy, disagreed on the path of interest rates, indicating a difficult debate in the coming weeks. Russian Foreign Minister Sergei Lavrov criticized the West for “shamelessly burying” the Black Sea grain initiative, which facilitates Ukraine’s agricultural exports from its southern ports.


The dollar is well bid against most major currencies this morning. The US Supreme Court’s conservative majority appeared sceptical of President Joe Biden’s $400bn student loan relief program, potentially opening the door for one of the administration’s flagship economic policies to be overturned later this year. Two Democratic senators sided with Republican lawmakers in opposing a White House rule that allows fund managers to consider environmental, social, and governance factors in their investment decisions, making it likely that Joe Biden will issue the first veto of his presidency.


Stock markets worldwide extended losses on Thursday, as US 10-year Treasury bonds topped 4% for the first time since November in a sign that the Federal Reserve’s warnings of higher-for-longer interest rates are finally sinking in. Europe’s Stoxx 600 equity index retreated 0.5%, having fallen to three-week lows on Wednesday as hotter-than-forecast German inflation data pushed money markets to bet on further interest rate rises from the European Central Bank. US equity futures also fell, with contracts on the rate-sensitive Nasdaq down about 1% after both it and the S&P 500 index ended February with losses. In Asia, Hong Kong stocks slid as much as 1.5%

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

8:00 a.m.: Denmark Jan. Unemployment Rate
9:00 a.m.: Spain Feb. Unemployment Change
10:00 a.m.: Italy Jan. Unemployment Rate
10:30 a.m.: BOE Decision Maker Panel Survey
11:00 a.m.: Italy Feb. CPI
11:00 a.m.: Euro Area Feb. CPI
1:30 p.m.: ECB Publishes Account of Feb. Policy Meeting
1:30 p.m.: ECB’s Schnabel speaks
2:00 p.m.: BOE’s Tenreyro speaks
2:30 p.m.: US Initial Jobless Claims

Corporate Events

Earnings include Anheuser-Busch InBev, Haleon, Flutter Entertainment, Best Buy, Macy’s, Nordstrom, Costco, Broadcom, Kroger, HPE, Dell, Hormel Foods, VMware, Luckin Coffee, Victoria’s Secret

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