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Breakfast Bites - Fri Mar 24, 2023

Rise and shine everyone


Happy Friday! The big news this morning is Deutsche Bank’s CDS levels - risen to 172 according to Mayhem, which puts default risk high up on the list.


We have few economic data releases including Durable Orders and Flash PMI. No major earnings today. But, we do have Bullard speaking at 9:30am ET.


US Futures look weak this morning. Gold, USD and Bonds are catching a bit of a bid. Oil is back down to $66 and BTC made a round trip back to $27,770.


Asia and Australia

  • Asian markets were down this morning. Greater China markets mixed with Hang Seng underperforming. Japan and Australian markets logged mild declines.

  • Japan: Flash manufacturing PMI was 48.6 in March, following 47.7 in the previous month. A slight improvement but still in contractionary territory.

  • Japan's consumer inflation off 41-year high but cost pressure persists

  • MOF weekly portfolio flow data showed foreigners bought record net JPY4,095.7B in JGBs last week.

Europe, Middle East, Africa

  • European equity markets lower

  • Stoxx 600 Banks index selling off sharply Friday amid growing concerns about more distress and stability within the sector

  • BoE Governor Bailey said in media round after Thursday's rate hike that if firms continue to increase prices it will have to raise rates again

  • March Eurozone flash manufacturing PMI fell to a 2-month low at 47.1 vs consensus 49.0 and prior 48.5, while flash services PMI rose to a 10-month high at 55.6 vs consensus 52.5 and prior 52.7

  • UK composite PMI shows the rate of expansion in the private sector slowed to a two-month low in March at 52.2 versus consensus 52.7 and prior 53.1

  • French protests escalating after President Macron chose confrontational tone against those who oppose his pension reforms

The Americas

  • Banks rely heavily on Fed's lending facilities for second week in a row. Borrowing at Fed's backstop facilities was little changed in the week-ended 22-Mar vs prior week at $164B. Borrowing at the new BTFP increased by $41.7B to $53.7B, while discount window borrowing fell by $42.6B to $110.2B. This is exactly what we expected, as I mentioned in my article. The Discount Window was used until the BTFP was up and running. So we saw some migration.

  • Yellen says Treasury could take additional deposit actions if warranted - we got a minor spike in the market on this news yesterday.

  • Despite lower prices, US Energy Secretary Granholm says refilling SPR this year will be difficult

  • Walmart laying off hundreds of employees from its e-commerce facilities

  • Accenture to cut headcount by 19K, or 2.5% of its workforce

  • Money market funds saw inflows of $142.9B in week-ended 22-March, the most since March 2020.

Calendar


(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)


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