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Rise and shine everyone.
Interesting news coming across this morning. Walmart posted a double beat with a marginal increase in guidance for 2023 and an increase for 2024. It would seem like inflation is not exactly a thing of the past just yet.
The Fed’s minutes still remain in focus with their discussion of inflation still being a problem. It seems like everyone has put one more rate hike back on the table. Personally, I do think we get one more hike, minutes or not.
Japan’s 20-year auction didn’t go too well… in fact, it’s being described as “horrible” pulling down the 20-year JGBs and pushing up yields. US Treasury Yields are also higher this morning at the long end.
US Equity Futures are trading marginally higher this morning after yesterday’s “yucky” close. (Yes, that’s a technical term!) Gold and Crude Oil are higher; USD Index marginally lower and Bitcoin lower as well. The Yield Curve steepened almost 10 bps from yesterday morning to -0.65%.
Initial claims, Philly Fed manufacturing and LEI all on the US economic calendar this morning.
Asia and Australia
Asia equities again trading lower Thursday. Japan to close near two-month lows, Australia also dipping to lows not seen since early July. Losses most acute in Hong Kong that is experiencing a volatile day, gapping lower only to recover then dip again; mainland bourses also down
A brewing potential liquidity crisis at China’s shadow banking giant, Zhongzhi, is in the spotlight again after news of the company planning a debt restructuring.
Yuan flirts with 16-year low as PBOC steps up efforts to slow depreciation.
Japan exports turn to declines, machinery orders trajectory remains soft. China-bound exports fell double digits for the second consecutive month.
Australian unemployment rises unexpectedly from 3.5% in June to 3.7% in July.
Europe, Middle East, Africa
European equity markets lower.
Norges Bank hikes 25bps to 4% and signalled another hike in September, as expected. The message: full impact of tightening is yet to be seen and somewhat higher policy rate still needed to turn inflation to target. NOK is stronger after the announcement
ECB's Kazaks says any additional rate hikes would be very small
After yesterday’s inflation data, analysts are eyeing a 6% Bank Rate for England.
Russia won't tighten capital controls for now after informal agreement with exporters to surrender more of their foreign revenues.
BAE Systems buys Ball Corp's aerospace arm for about $5.55B
The Americas
SF Fed study shows US households on track to exhaust excess savings in current quarter
Bipartisan majority of Americans favor more tariffs on Chinese goods, stepped up efforts to counter China military threats
Cisco one of the first higher-profile tech names to report for the Jul Q. Fiscal Q4 revenue growth of 16% y/y beat the Street by more than 100 bp, while margins beat on better pricing and mix, driving EPS 7.5% above consensus.
Still a lot of debate about potential macro impact of the upcoming resumption of student loan payments. Target said resumption of student loan repayments will put additional pressure on the already strained budgets of tens of millions of households.
Calendars
(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)
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