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Breakfast Bites - Mon Sep 11, 2023

Rise and shine everyone.

We have a big week ahead of us with the CPI numbers being released for the US on Wednesday and then the ECB rate decision on Thursday. Both are likely to be important for the Fed’s rate decision next week. We also have the quarterly options expiry this Friday - what is called triple witching because we have stock options, stock index futures, and stock index options expiring on the same day.

Equity futures are higher this morning with Gold and Copper. Oil, Bitcoin and the US Dollar Index have pulled back. Yields are higher at the longer end with the Yield curve at -0.695%

Asia and Australia

  • Asian equities ended mixed Monday, China assets rallied on better economic news. Stronger-than-expected credit and inflation data behind a rally in Chinese mainland markets, Hong Kong underperformed as it partly mark-to-market Friday's losses in Chinese equities.

  • China: New loans were CNY1.36T in August, above consensus CNY1.20T and follows CNY345.9B in the previous month.

  • BoJ Governor Ueda said they "can't rule out the possibility" there will be enough information by year-end to judge if wages will continue to rise. Sustained yen strength Monday alongside sharply higher bond yields and banking sector rally largely attributed to latest comments from BOJ Governor Ueda.

  • China deflation pressures ease: Headline CPI rose 0.1% y/y in August, below consensus 0.3%, though still an improvement from a 0.3% decline in the previous month, which was the first negative print since Feb-21. Core inflation remained steady at 0.8%.

  • Arm is getting close to securing enough investor support to attain the fully diluted valuation of $54.5B it was seeking in its IPO at the top of its indicated range and is considering asking investors to value it higher.

Europe, Middle East, Africa

  • European equity markets higher, yet off the best levels. Miners and banks outperform; travel and food/beverage weaker.

  • The European Commission published summer 2023 economic update and revised down 2023 growth forecast to 0.8% from 1.1% and sees 2024 growth at 1.3% from 1.6%.

  • Dutch TTF gas prices heading for third straight day of gains as negotiations between Chevron and Offshore Alliance taking different path compared to Woodside

  • Insights from UK industry data continue to highlight a mixed picture for the labor market ahead of tomorrow's official ONS data.

The Americas

  • Meta reportedly planning to train a new model that it hopes will be as powerful as OpenAI's latest GPT-4

  • J.M. Smucker nearing a deal to buy Hostess Brands for close to $5B

  • Oppenheimer’s Stoltzfus says US stocks are likely to dip further

  • Earnings estimates rising, further underpinning expectations for a profit recovery following three straight quarters of y/y declines

  • UAW strike against Big Three US automakers increasingly likely after union president trashed latest contract proposals, with even brief work stoppage seen causing billions in US economic damage


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


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