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Breakfast Bites - Tue Jun 6, 2023

Rise and shine everyone.

Interesting news this morning - the Reserve Bank of Australia did a surprise rate hike of 0.25% increasing their cash rate to 4.1%, the highest level since April 2012. They’ve also kept the door open to more rate hikes. The ASX closed -1.2%.

S&P futures down 0.1% in Tuesday morning trading after US equities finished mostly lower on Monday, reversing early gains, with small caps giving back some of their big Friday rally. Treasuries firmer with some curve steepening.

Dollar better vs euro and sterling but lagging yen and Aussie. Gold up 0.2%. Bitcoin still remains below $26,000 after yesterday’s news of the SEC suing Binance. WTI crude down 2.1% after finishing well off best levels on Monday following the OPEC+ developments.

Asia and Australia

  • Asian equities finished mixed Tuesday. Japan markets opened slightly lower but finished on fresh 33-year highs. Hang Seng did the reverse

  • Japan’s real wage growth falls for the 13th straight month by -3% and real household spending falls by -4.4% YoY. As long as real wages are not increasing and consumption is not increasing, it’s unlikely we see a policy change to tightening.

  • China continues to ease - Chinese authorities have asked its biggest banks to cut deposit rates for second time in 12M, marking significant ramp-up in efforts to boost economy.

  • China is likely to cut RRR, interest rates in H2 while monetary policy will continue to focus on structural policy tools for now

  • Japan crypto exchanges hit with tougher money laundering curbs

  • Alibaba and Tencent among 21 firms approved by HKEX for yuan share trading counters starting on 19-Jun

  • Japanese Yen's weakening prompts talk of another intervention worth billions of dollars - still just rumors

  • Taiwan Semiconductor sees inventory decreasing at customer side with rising end demand

Europe, Middle East, Africa

  • European markets softer. Oil/gas, telecom and autos weaker; health care and financial services stronger

  • ECB April Consumer Expectations Survey suggested inflation over next 12 months seen at 4.1% vs 5.0% prior.

  • Eurozone retail sales increased by 2.6% y/y in April below consensus forecast of 3.0% and below the previous reading of 3.3%.

  • German factory orders down for second month, adding to industry weakness

  • UK consumer spending slows in May amid high food prices

  • Construction activity a bright spot in UK economy with latest PMI data seeing activity increasing at fastest pace in three months at 51.6 versus consensus 51.1 and prior 51.5.

The Americas

  • Apple’s VR headset wasn’t too well received because of the price. At $3,499, the price tag is being seen as excessive. The launch date is next year. Apple also unveiled their iOS 7 and new 15-inch MacBook Air, the new Mac OS Sonoma, a new Journal app.

  • Blackstone Real Estate Income Trust Inc (BREIT) to sell Texas-based resort to Ryman Hospitality Properties for $800M

  • Intel to sell $1.5B stake in its self-driving unit Mobileye

  • Walmart to eliminate plastic from online order packaging

  • Property delinquencies are rising. Rark Hotel disclosed that, starting in June, the company ceased making payments towards the $725M non-recourse CMBS loan scheduled to mature in Nov-23, secured by two San Francisco hotels - the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco.


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


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