Morning Report

Morning Report – Monday 12 April

Jon Robson, Head of Trading

“While sterling suffered last week as Europe made gains in its vaccination programme, the pound has been buoyed in early morning trade by the long-awaited easing of lockdown restrictions. All eyes will be on whether pent-up demand and high levels of saving will translate into an expected surge in consumer spending, boosting a wider economic recovery.”

Main Headlines

Federal Reserve Chair Jerome Powell said yesterday that the US economy is at an “inflection point” as the vaccination rollout continues at pace and substantial policy support remains in place with stronger growth and hiring on the horizon. In comments made to CBS’s renowned “60 Minutes” show, Powell stated that “we feel like we’re at a place where the economy is about to start growing much more quickly and job creation coming in much more quickly.” While Powell indicated that the outlook has “brightened substantially”, he warned that the risks presented by Covid-19 remain and continued social distancing will remain pivotal.

After almost 100 days of lockdown, Covid-19 restrictions in the UK have eased further as Boris Johnson hailed a “major step forward in our road map to freedom”. For the first time since January, non-essential retailers, gyms, hairdressers, and pubs and restaurants with outdoor seating are permitted to open as Britain seeks to harness its rapid inoculation drive and reopen large parts of the economy. Recent OBR figures suggest that UK citizens have amassed £180bn in bank accounts due to the pandemic and the Government is hoping that pent-up demand will translate into a surge in consumer spending with infection and hospitalization rates continuing to fall.


Sterling is stronger against most majors overnight. Officials have indicated that the UK and EU are making progress in talks on the application of post-Brexit rules to Northern Ireland, raising hopes that an agreement on this front could reduce recent tensions in Belfast. Meanwhile, as the UK yesterday reported the lowest number of new coronavirus cases since September last year, Deloitte’s CFO survey found that there has been an upswing in confidence among UK business leaders with expectations for hiring and business investment at their highest levels in almost six years.


The euro is weaker against both the dollar and the pound in the early morning trade. The Bavarian CSU leader Markus Soeder has joined the race to succeed Angela Merkel as German Chancellor as his rival CDU Chairman Armin Laschet flounders in the polls. The move has disrupted convention and pushed the succession process into disarray with the competition expected to be settled within the week either through amicable agreement or a contested nomination. Meanwhile, legislation has been drafted in Germany that would allow the federal government to impose coronavirus restrictions as the pace of the nation’s vaccination rollout doubles.


The dollar is stronger against the euro and weaker against sterling this morning. US Secretary of State has warned China against encroachment on Taiwan and blamed the nation’s practice of secrecy for hastening the spread of Covid-19. Elsewhere, US national security and economic advisers are due to meet with chief executives today to discuss Biden’s infrastructure plan and the semiconductor shortage derailing the auto industry’s recovery.


Asian stocks slipped Monday as investors weighed an uneven global recovery from the pandemic against the latest upbeat U.S. outlook from Federal Reserve Chair Jerome Powell. Markets in China and Hong Kong lagged. India’s Sensex slumped to a 10-week low as daily Covid-19 infections spiked. U.S. equity futures retreated following a third straight week of gains for the S&P 500 Index. European contracts were slightly in the red. Oil was steady in Asian trading and Bitcoin was at about $60,000,

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

9:00 a.m.: Turkey Feb. current account, unemployment rate

11:00 a.m.: Euro-Area Feb. retail sales

11:30 a.m.: Germany sells bills

1:00 p.m.: Turkey sells bonds

2:50 p.m.: France sells bills

3:00 p.m.: BOE’s Tenreyro speaks

4:00 p.m.: ECB’s de Cos speaks

5:30 p.m.: U.S. to sell $54 billion 26-week and $58 billion 3-year notes

7:00 p.m.: U.S. to sell $57 billion 13-week bills and $38 billion 10-year notes reopening

Germany’s Merkel delivers a keynote at the Hannover Messe 2021 Digital Edition conference

Biden holds chip shortage summit

U.K. eases more lockdown restrictions


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