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Breakfast Bites - Tue Jun 13, 2023

Rise and shine everyone

Big day today with the CPI inflation numbers coming out at 8:30am ET. Everyone’s watching this number to see if it influences the Fed decision tomorrow. There are still those who are in the hike camp if inflation numbers come in hotter than expected. We think that the Fed still pauses but keeps the door open for a further hike. The median CPI estimate is 4.1% YoY with Core CPI estimate at 5.3% YoY.

US Markets are trading higher this morning, alongside Gold, Copper and Bitcoin. Oil is bouncing off it’s lows and up +1.6% to $68.36. The US Dollar Index has pulled back to $103.30.

Asia and Australia

  • Asia equities closed higher in Tuesday trade. Hong Kong higher in a volatile day's trading, mainland markets also higher. Taipei led the region as chip stocks rallied again, South Korea also saw gains. The Japanese Nikkei with an impressive gain of 1.63% crossing 33,200.

  • China banks' new loans issuance for May missed market expectations.

  • PBOC Tuesday lowered 7D reverse repo rate 10 bps to 1.9% in move to aid economic recovery. This certainly gave the Chinese and Hong Kong markets a boost.

  • India's May inflation rate fell to 4.25% y/y from 4.7% in April, lowest level in two years and vindicating RBI's decision to hold rates steady last week.

  • China's Nio cuts prices, ends free battery swapping as sales slide

Europe, Middle East, Africa

  • European equity markets mostly higher.

  • German ZEW economic sentiment survey improved in June to -8.5 versus consensus -13.1 and prior -10.7.

  • UK labor market data surprised on the upside. May claimant count dropped 13.6K versus consensus for 21.4K gain. Number of people employed hit record high in latest quarter due to increases in both employees and self-employed workers.

  • The unexpected tightening in today's UK labor market data has accelerated BoE rate hike bets. Terminal rate pricing now up to high of 5.7% by February 2024 versus ~5.5% prior to the data.

  • Goldman Sachs noted that Investors have been cutting allocation to EU equities for weeks, in contrast with flows to EU bonds. Reasons reportedly weak sentiment, banking stress and China's softer patch following initial strong recovery from lockdown.

The Americas

  • BofA June Global Fund Manager Survey says pain trade for risk assets still higher

  • Hedge funds slash bearish bets and boost equity exposure ahead of US CPI, Fed rate decision

  • NYC office occupancy above 50% for first time since pandemic

  • Medtronic likely to spin off its patient-monitoring and respiratory-intervention operations as bidders lose interest

  • Goldman Sachs and Morgan Stanley see investment banking revenues increasing in coming quarters


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

No Major Earnings for today


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