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Breakfast Bites - Fri Sep 15, 2023

Rise and shine everyone and Happy Friday.

Happy Quarterly Options Expiry as well. According to Mayhem: Today is set to be the biggest OpEx on record with $3.4 trillion of notional expiring!

And we also have the US Industrial Production numbers out at 9:15am ET and the preliminary Michigan Consumer Sentiment numbers at 10am ET.

Nothing fancy in the markets this morning. US Equity futures are largely flat with the SPX up 0.08% and the Nasdaq-100 down -0.10%. Bitcoin and the US Dollar remain largely flat. Oil crossed $91/bbl yesterday and has pulled back slightly to around $90.60. Yields remain firmer across the curve with the Yield Curve at -0.71%.

Asia and Australia

  • Asian equities ended mostly higher Friday. Gains led by China-trade related and technology heavy bourses with Australia, South Korea and Taiwan all seeing solid returns. An uneven day in Greater China despite better-than-expected economic activity data, Hong Kong ended higher but well off its peaks while mainland bourses closed in the red. Japan equities ended at six-week highs.

  • There seems to a slight improvement in the data coming out of China with Industrial Production and Retail Sales beating estimates. Industrial production rose 4.5% YoY while Retail Sales rose 4.6% YoY. However, housing data isn’t looking too great. China's new house prices fell 0.3% MoM in August, steepest pace in ten months.

  • The PBOC announced (September 14th) it would cut the reserve requirement ratio (RRR) by 25bp or all financial institutions except the ones that already face 5% RRR. PBOC official stated the rate cut expected to release more than CNY500B ($70B) in liquidity.

  • Iron ore scales five-month high as China property downturn continues.

  • Taiwan stock exchange looks to diversify with new crop of technology companies

  • Japan government considers extending fuel subsidy to compensate for inflation

Europe, Middle East, Africa

  • European equity markets broadly higher. Personal & Household Goods leading as many constituents exposed to China. Construction/Materials and Basic Resources also higher; Technology and Retail lag.

  • The highlight from yesterday’s ECB meeting was the new sentence in the statement stating that policy rates “had reached levels that, maintained for a sufficiently long duration, would make a substantial contribution to the timely return of inflation to target.” The market is taking this to mean yesterday’s 25bps hike was the last one, although the ECB has not closed the door on further tightening.

  • EUR/USD posts six-month low on dovish ECB hike.

  • Outlook for European mining stocks amid backdrop of Chinese stimulus coming through, potentially providing a much needed boost to the sector.

  • French finance minister Le Maire said on Thursday that the government aims at €16B in savings after cutting its growth outlook. The economy is forecast to grow 1.4% next year, down from 1.6%.

The Americas

  • It was a successful debut for Arm Holdings (ARM) largest since RIVN in 2021 priced at $51, opened at $56.10 on 13.3m shares, and closed at $63.59. It’s likely this gave tech shares an overall boost yesterday.

  • Detroit auto workers started their strike after talks between union leaders and the Big Three automakers fell through at the midnight deadline. Workers began walking out of Ford Motor’s Michigan plant that makes the Bronco SUV, a General Motors facility in Missouri and a plant in Ohio that makes the Jeep Wrangler. It was the first time in history the UAW took action against all three carmakers simultaneously.

  • Disney to hold talks regarding a potential sale of ABC to Nexstar; Byron Allen makes $10B offer. Also, Disney expected to downgrade 2024 streaming subscriber forecast.

  • Apple has named a new head of its project to develop a glucose monitor that doesn’t require a skin prick for a blood sample. DexCom and Tandem took a hit to their share price yesterday on this news.

  • TSMC tells major suppliers to delay the delivery of high-end chipmaking equipment on demand worries.

  • Salesforce planning to hire 3,300 people across departments after layoffs earlier this year

  • US readying new sanctions on Russia by targeting companies and individuals profiting from Moscow's invasion


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


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