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Breakfast Bites - Mon Jul 31, 2023

Rise and shine everyone and Happy Monday!

Another exciting morning from the Bank of Japan who decided not to even let yields move past 60bps to start buying bonds. They’re buying $2B equivalent of 5 year and 10 year Japanese Government Bonds to keep yields in check (lower). This will flood the market with liquidity… again.

Today’s big report is the Q2 23 Senior Loan Officer Opinion Survey (SLOOS) report.

US Equity Futures are trading higher this morning alongside the US Dollar, Oil, and Bitcoin. Gold is largely flat. The Yield Curve is at -0.92%

Asia and Australia

  • Asian equities advanced Monday. Nikkei rallied to a four-week high. Hang Seng extended last week's rally, led by tech and property gains. Mainland also gained. Korea closed higher, while Taiex underperformed. ASX flat.

  • Multiple Chinese property stocks rose Monday on optimism about Beijing's latest efforts to boost housing demand and improve developers' finances.

  • Official manufacturing PMI was 49.3 in July, almost in line with consensus 49.2.

  • China Beige Book survey that showed almost every major sector saw weakening in both revenue and profit margin compared with June as consumers cut back on spending on everything but travel and restaurants.

  • China issues 20 measures to boost consumption but stops short of direct consumer support

  • Japan industrial production, retail sales finish Q2 higher - Industrial production rose 2.0% m/m in June, compared to consensus 2.4%, rebounding from a -2.2% drop in the previous month. Retail sales fell -0.4% m/m vs expected -0.7% decline, following 1.4% rise in May.

  • RBA's 1-Aug policy decision likely to be a close call with views mixed on whether it will raise cash rate by 25 bp to 4.35% or leave it unchanged for a second month

  • Chinese firms are seeking Korean partners to skirt US EV rules

Europe, Middle East, Africa

  • European equity markets mixed, but off pre-mkt lows after closing higher last week with EuroStoxx 50 highest since 2007/2008, Dax posted new all-time high. Healthcare, basic resources stronger; food/beverages and telecom lag

  • Q2 Eurozone preliminary GDP +0.3% QoQ vs consensus +0.2% and prior 0.0% while on an annualized basis, preliminary GDP +0.6% YoY vs consensus +0.5% and prior +1.1%

  • Eurozone inflation fell in line with expectations to 5.3% in July down from 5.5% in June. Core inflation remains unchanged at 5.5%.

  • German retail sales post first monthly decline since March. Sales for June declined 0.8% MoM vs expectations of +0.2% and upwardly revised 1.9% prior.

The Americas

  • Trucking firm Yellow shuts down operations ahead of an expected bankruptcy filing

  • Walmart spends $1.4B on buying the remaining stake in Flipkart

  • Shipping industry vulnerable to downturn amid record $90B spent on new ship orders by giants

  • Better breadth with nearly 90% of S&P 500 members above their 50-DMAs late in July. Pain trade still higher with record ~$5.5T in money-market mutual funds and still-light positioning in key cyclical pockets.


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


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