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Breakfast Bites - Mon Aug 28, 2023

Rise and shine everyone and Happy Monday!


A lot of macro data releases this week including PCE, Jobs Data and PMIs. Today is quiet in terms of US data but we do have a mix of European and Japanese data.


US Equity Futures are marginally higher after posting its first green week in three weeks. Bond yields are lower in contrast to global yields that are trading higher across Japan, China and the Eurozone. The UK is closed today. The US Yield Curve has inverted further to -0.87%.


Oil and Bitcoin are lower while Gold is marginally higher.


Asia and Australia

  • Asian equities ended higher Monday. Hang Seng gapped higher by 3% at the open but tapered off over the day to finish finish around 1% up, similar pattern in mainland markets. Gains elsewhere led by Japan.

  • BOJ Governor Ueda at Jackson Hole remarked on Saturday that Japan’s inflation remains "a bit below" the 2% target and continued to justify easing policies. This is in line with what we expected from them. We don’t see a drastic change in policies into the end of the year.

  • China cuts stock taxes 50% and asks banks to buy stocks. The government is treating the symptoms not the cause. The markets were not impressed by this and after a gap up, gave up almost all it’s gains.

  • Evergrande, the major Chinese developer, saw its shares plummet almost 87% as trading resumed after 17 months. The company also posted a loss of 39.25 billion yuan ($5.38 billion) for the six months ended June, with total liabilities of 2.39 trillion yuan.

  • Profits at industrial firms in China declined 15.5% y/y in Jan.- Jul, slower than 16.8% drop in Jan.-Jun. Profits for July alone fell 6.7% y/y, versus 8.3% drop in June.

  • Australian retail sales rose 0.5% m/m in July, higher than consensus for a 0.3% increase and rebounding from June's 0.8% contraction. Discretionary goods categories led the gain with clothing, footwear and personal accessory retailing rising 2.0% and department store retailing up 3.6%.


Europe, Middle East, Africa

  • European equity markets higher, but well off best levels, after closing in positive territory for the first time in four weeks on Friday.

  • Eurozone July M3 declined 0.4% y/y vs 0.0% expected. Was the first negative reading for broad reading for money growth.

  • ECB President Lagarde voiced concerns at Jackson Hole that tighter labour markets, green transition and fragmentation of economy into competing blocs requires new central bank playbook.

  • September ECB hike a coin-toss but leading indicators suggest lower inflation ahead.

  • Germany's ruling Social Democratic Party will vote on a proposal for rent freeze in an attempt to halt inflation.

  • EU gas market remains on edge over Norway flows and Australia strike potential.


The Americas

  • US payrolls growth expected to slow to 170K in August, leaving three-month average lowest since start of 2021.

  • Hostess Brands considering sale after receiving takeover interest from major snack food makers.

  • Trucking industry is projecting an uptick in demand in 2H with retailer de-stocking trend largely done.

  • Realty Income confirms purchase of 21.9% stake in Bellagio from BREIT

  • AAII bullish sentiment fell to 3.6pp to 32.3% in week-ended 23-Aug,below the historical average of 37.5% for a second straight week.


Calendars

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

No Notable Earnings today




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