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Breakfast Bites - Mon Aug 14, 2023

Rise and shine everyone and Happy Monday.

It’s a quiet morning with not a lot of economic data for the day. Just a few earnings for today. We have a host of retail earnings starting this week from tomorrow, and it will be interesting what these companies have to say about the consumer.

US Equity Futures are trading marginally higher this morning after closing in the red for two weeks in a row. Gold is flat, Oil is lower and the US Dollar Index is slightly higher, alongside Bitcoin. US Treasury Yields remain elevated with the Yield Curve at -0.76%.

Asia and Australia

  • Asia equities lower almost everywhere Monday. Equities led lower by Hong Kong and in particular its property stocks. Mainland benchmarks also lower but off their troughs by the close.

  • Country Garden Holdings, one of China’s largest property developers, suspends trading in corporate bonds in mainland China starting 14-Aug. Last week the company missed international bond payments. Unfortunately, property worries continue to mount in China and the market isn’t seeing a recovery soon enough.

  • China trust product investors also reporting missed payments - three firms said late Friday they failed to receive payments on multiple high-yield investment products issued by companies linked to Zhongzhi Enterprise Group, which has ~CNY1T ($138B) in assets under management.

  • Tesla cuts prices in China again, raising more concerns about EV price war

  • India loads up on Russian dirty fuel with crude supply cuts

Europe, Middle East, Africa

  • European equity markets mostly higher.

  • Bond traders fear hawkish ECB pivot amid return of European energy jitters. While European Natural Gas still trades -90% below it’s extraordinary peak last year, there are fears that climbing energy costs could see a resurgence of headline inflation. On the plus side, EU gas storage levels are over 86% full as of July 31, approaching ~90% currently.

  • UK July inflation to be published on Wednesday. Reuters poll of economists expects annual rate to fall to 6.7% versus prior 7.9%, which would take it slightly below June's 7.9% reading.

The Americas

  • Amid high prices and high rates, the median age for first-time homebuyers has climbed to 36

  • Treasuries may continue to see some turbulence as long as Fed's path remains unclear

  • Nikola suspending sales and recalling all electric trucks after investigation into recent fires

  • US Steel rejects nearly $7.5B unsolicited offer from Cleveland-Cliffs, says it will explore strategic options


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


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