Morning Report: 13 March 2018

March 13, 2018

GBP The diplomatic and political crisis between the UK and Russia continues to escalate this morning, but sterling has been largely unaffected and is trading only slightly down overnight, after some solid gains yesterday. Brexit Minister Robin Walker said yesterday that the UK and EU are “very close” to an implementation deal, and the news gave sterling a sharp boost that lasted throughout the afternoon. This morning’s major event will be the Spring Budget Statement at 11:30 GMT, where Chancellor Philip Hammond will deliver updated budget numbers, although he is likely to shy away from spending increases.

USD After some modest intraday volatility, USD closed broadly lower yesterday, but pared back its losses slightly overnight. The dollar will see some top tier data today in the form of the Consumer Price Index, at 12:30 GMT. After a rapid 0.5% increase in the headline index in January, inflation is expected to have moderated in February.

EUR The euro also advanced slightly against USD yesterday, in an uneventful session. This morning has seen some minor data releases, in the form of revised French Payrolls, which rose 0.4% in Q4 2017, slightly faster than initial estimates. The eurogroup of finance ministers will continue to meet in Brussels today.

CAD After rallying sharply at the end of last week and in early trading on monday morning, the loonie found itself back on the defensive yesterday and remains so this morning. Bank of Canada Governor Stephen Poloz will deliver a speech on the labour market at 14:30 GMT, with the text released 15 minutes earlier.

UK news

  • Guardian: Boris Johnson confirms UK will announce its response to Russia tomorrow. Boris Johnson, the foreign secretary, said this morning that he has been “very encouraged” by the support the UK has been getting internationally since Theresa May’s statement about Russia’s involvement in the Salisbury attack yesterday. He also confirmed that the government would announce what action it will take in response tomorrow.
  • Reuters: President Trump halts Broadcom takeover of Qualcomm. U.S. President Donald Trump on Monday blocked microchip maker Broadcom Ltd’s proposed takeover of Qualcomm Inc on national security grounds, ending what would have been the technology industry’s biggest deal ever amid concerns that it would give China the upper hand in mobile communications.

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