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Breakfast Bites - Mon Jun 5, 2023

Rise and shine everyone and Happy Monday!

It’s a quiet week in terms of economic data and earnings. We’re in the Fed’s quiet period so thankfully we won’t be hearing from any of the Fed speakers.

The major news coming out of the weekend is the voluntary oil output cuts from Saudi Arabia, who made a unilateral decision to cut an extra 1 million barrels per day starting July. Oil prices are trading higher on the news.

The US Futures are mixed this morning with the Dow and S&P trading slightly higher and the Nasdaq-100 & Russell2000 slightly lower. Gold, Bitcoin and Bonds are trading lower. While the US Dollar is higher this morning.

Asia and Australia

  • Asian equities ended higher Monday. Nikkei closed 2.2% higher and above the 32K mark for the first time since July 1990. Hang Seng also higher for a second day but some mainland boards were softer.

  • Caixin services PMI was 57.1 in May, above consensus 55.2 and follows 56.4 in the previous month. Data in expansion for fifth straight month.

  • Beijing putting together basket of measures to support its property sector and boost economy after previous initiatives failed to provide hoped-for rebound. This is something to keep an eye on as it may mean liquidity entering the system providing a tailwind to stocks.

  • Beijing will make greater efforts to attract and utilize foreign capital. Noted China will reduce negative list for foreign investment and relax restrictions on market access.

  • Economists split on whether RBA will hold or raise cash rate by 25 bp to 4.10% at Tuesday's meeting

  • Negative-yielding debt bounces back to almost $2T on BOJ

  • South Korea forex reserves drop in May on stronger dollar; Foreigners to be allowed to invest in South Korean stock market without prior registration from Dec.

Europe, Middle East, Africa

  • European equity markets higher.

  • S&P left its credit rating for France unchanged AA despite concerns over country's rising debt levels and after Fitch lowered its rating in April

  • ECB's Visco says falling energy prices should help tame inflation

  • Bank of England looks to broaden reform of deposit guarantee scheme

  • UK PM Sunak wants to cut National Insurance or income tax by up to 2p before next year's general election

  • EU gas prices retreat, but tight LNG markets expected further into H2. Dutch TTF gas prices down to €25/MWh from over €30/MWh just two weeks ago.

The Americas

  • Bearish positioning in S&P 500 highest since 2007, bullish bets on Nasdaq 100 near highest level since late last year

  • CCC-rated bond underperformance highlights concerns about growth, default risks

  • Apple expected to announce Reality Pro headset with AR and VR features at WWDC 2023

  • US banks could see 20% hike to capital requirements on average as regulators ready plan

  • Microsoft president Brad Smith to meet with UK Chancellor Jeremy Hunt about Activision


(news taken from Reuters, FT, Bloomberg; Calendar from Benzinga and Earnings Whispers)


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