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Breakfast Bites - Thu Apr 13, 2023

Rise and shine everyone

Yesterday was quite the day. CPI coming in cooler than expected and then the release of the FOMC minutes brought us some gloom and doom with the Fed members predicting a mild recession. The odds of a 25bps hike has increased for May and it’s likely to remain so.

Todays bid news is the PPI data being released at 8:30am ET.

S&P futures up 0.3% in this morning after US equities finished mostly lower on Wednesday, ending near session lows with airlines and retail among the worst performers. The USD Index and the bonds remain lower as bond yields rise. Gold , Oil and Bitcoin are all looking bullish this morning.

Asia and Australia

  • Asia markets ended mixed Thursday. Japan closed higher for the fifth consecutive session, South Korea gained a few points. Hong Kong rallied into the close to end higher

  • Chinese Exports rose 14.8% y/y in dollar terms, much better than an expected 7.1% decline.

  • Governor Ueda, attending the G7 meeting, reiterated inflation will fall below the 2% target towards mid-FY23 and the BOJ will continue with easy policy until the target can be achieved in a sustainable and stable manner. We hear from the Bank of Japan on the last Thursday - Friday of April.

  • Australian unemployment rate continue to hold at 50-year low of 3.5% with the jobs increasing this month.

  • China is set to release plan requiring domestic steelmakers to cap 2023 output at 2022 levels to maintain higher prices. Prices were falling because of lower demand and mills were cutting prices. This is a sign that construction activity has declined in China and around the world.

Europe, Middle East, Africa

  • European equity markets mixed. Most regional indices close to flat, except from French CAC, benefiting from update from LVMH.

  • ECB officials said to be converging on a 25bp hike in May

  • German CPI number came in line with expectations. YoY CPI was 7.4% and MoM at 0.8%.

  • The UK's monthly activity data showed the economy stagnated in February with GDP data at 0% versus consensus for 0.1% increase and prior 0.3% gain. On a three-month basis, economy expanded 0.1% versus 0% forecast.

  • February Eurozone industrial output came in stronger than expected in February, driven largely to a rise in production of capital and non-durable consumer goods.

The Americas

  • Delta Air Lines Inc. reported a first-quarter loss, but said strong summer bookings are expected to boost profits in the coming months. Delta said were one-time costs associated with a new pilot contract and other items, the airline reported a profit of $163 million, or 25 cents a share -- in line with the airline's guidance but shy of the 29 cents a share analysts were expecting, according to FactSet.

  • Series I savings bonds expected to fall to 3.8% next month

  • Apple triples iPhone production out of India to $7B in big shift away from China


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


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