Morning Report – Monday 19 April
Jon Robson, Head of Trading
“Despite some risk-off trade brought by tensions between the U.S. and both Russia and China, overall risk sentiment is skewed to further U.S. yield declines, pressuring the dollar amid low volatility and record highs in global stocks.”
Half of all adults in the U.S. have received at least one Covid-19 shot, the Centre for Disease Control and Prevention announced on Sunday. Nearly 130 million people over the age of 18 have been at least partially immunised with one coronavirus vaccine dose, and about 84 million adults have been fully vaccinated. The nationwide pause in the use of Johnson & Johnson’s vaccine – introduced out of concerns that doctors would improperly treat potential blood clots – is likely to be lifted Friday, according to Anthony Fauci.
The UK’s environment secretary George Eustice on Sunday defended the existing rules on lobbying and transparency, amid the continued escalation of the scandal around Greensill Capital. Cabinet minister Eustice said the existing measures were “robust”. Earlier last week, Downing Street launched an independent review into the matter, and several subsequent parliamentary inquiries have also been started, notably by the Treasury select committee, public administration and constitutional affairs committee, and public accounts committee.
Sterling is stronger against most major currencies this morning. Priti Patel will today accuse Facebook of putting profits before children’s safety, as the Big Tech giant plans to encrypt all messages. From today, homebuyers will need a deposit of 5 per cent to apply for mortgages with the launch of a new system of government guarantees. Average UK house prices increased by almost £7,000 in the past month alone.
The euro is weaker against other majors overnight. Markus Soeder flew into Berlin last night as support piles up for the Bavarian state premier’s bid to lead Angela Merkel’s conservative bloc into September’s election. Soeder will try to force opponent Armin Laschet to capitulate today in what would mark a major departure for the alliance. Elsewhere, the EU’s Brexit chief said he is convinced solutions can be found to “minimise” the disruption of Brexit on Northern Ireland, calling for a “good faith” approach to reduce tensions.
The dollar is lower against most majors in early morning trade. Biden’s administration will invest $1.7bn to tackle Covid-19 variants, as public health experts warn that new strains of the virus could drive up infections even as more Americans are vaccinated. Gunmen in Austin, Texas, and Kenosha County, Wisconsin, killed three people each in what police described as targeted incidents on Sunday afternoon.
Chinese stocks outperformed amid easing concerns about the health of state enterprise China Huarong Asset Management Co., a distressed-debt manager. Japan edged down. India’s benchmark fell to the lowest since February after daily virus cases hit a record. Nasdaq 100 futures got a boost from easing Treasury yields, and S&P 500 contracts were steady after the U.S. gauge chalked a fourth week of gains to a fresh all-time high. European futures rose. The yen advanced against its Group-of-10 peers. Bitcoin pared losses after tumbling the most since February over the weekend.
Main Economic Data/Central Banks/Government (All Times CET)
9:00 a.m.: Saudi Arabia sells sukuks
10:00 a.m.: ECB Feb. current account
10:30 a.m.: Italy Feb. current account
11:00 a.m.: Euro-Area Feb. construction output
11:30 a.m.: Germany sells bills
12:00 p.m.: Bundesbank monthly report
1:00 p.m.: Turkey sells bonds
2:50 p.m.: France sells bills
3:00 p.m.: Israel rate decision
The World Aviation Festival, featuring CEOs from Air France-KLM, EasyJet, Volaris, Wizz Air and Ryanair. It runs through April 23
U.K. Fintech Week begins and runs through April 23
Earnings include Coca-Cola, IBM, Prologis, Energean
Boao Forum for Asia runs through April 21