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Breakfast Bites - Wed Aug 16, 2023

Rise and shine everyone.

We have the Fed minutes coming out later today at 2pm and we have several important earnings releases including Target and TJX. We also have housing starts and building permits data coming out at 8:30am ET.

US Equity Futures are largely flat to slightly higher. Gold and Oil marginally higher. USD INdex and Bitcoin lower. Bond yields are lower. The Yield Curve is at -0.73%.

Asia and Australia

  • Asian equities ended lower almost everywhere Wednesday. Hong Kong stocks fell once again to reach ten-week lows while mainland markets also fell sharply. Japan benchmarks gapped lower and closed on their troughs, Australia's ASX broke a support line to end at one-month lows.

  • A shadow bank in China is missing payments. Zhongrong International trust said company has missed dozens of payments on a batch of financial products on 8-Aug, adding to delays on at least 10 others dated from July. While this cause for concern, the bigger banks in China remain solid.

  • Average new home prices in China's 70 major cities fell 0.1 percent year-on-year in July 2023 after a flat reading in June amid a prolonged property crisis and stalling economic recovery.

  • China is asking some of their funds not to sell equities to avoid a slump in their market. Meanwhile, the country received another set of GDP downgrades from the big banks. GDP growth is being estimates at less than 5% now.

  • New Zealand maintains their central bank cash rate steady at 5.5% and and reiterated policy settings to remain restrictive for foreseeable future.

Europe, Middle East, Africa

  • European equity markets turning lower after struggling to sustain earlier gains. Follows sharp selloff in prior session.

  • Eurozone GDP came in line with expectations - YoY GDP decline to 0.6% from 1.1%. QoQ GDP increased marginally by 0.3% from 0% earlier.

  • Sentiment gets more gloomy over European stocks. Spotlight on European focus in Bank of America's July Fund Survey, published 15-Aug. Large institutional investors growing increasingly worried about the outlook for European equities.

  • UK headline inflation falls but core and services prices hold firm. UK inflation eased in July to 6.8% versus street expectations for 6.7% outturn and prior 7.9% with falling gas and electricity prices the largest downward contribution and easing in food price inflation.

  • Eurozone industrial production surprised on the upside in June, with 0.5% m/m increase versus consensus for 0.1% fall

  • Russia discusses return to capital controls after currency weakness.

  • Norway is expected to hike tomorrow by 25bps to reach 4%.

The Americas

  • Target reports adjusted earnings more than quadrupled during the quarter ended in late July. Revenue during the latest quarter took an extra hit from a controversy around Target’s Pride Month collection. Comparable sales dropped 5.4%, worse than the 3.8% fall projected by analysts. The rise in demand for beauty products and food and beverages wasn’t enough to offset the weakness in many discretionary categories.

  • Schumer, McConnell both voice support for stopgap funding bill through early December

  • Intel to call off $5.4B acquisition of Tower Semiconductor as Chinese approval time runs out

  • Tesla cuts makes second round of price cuts in China this week

  • Bond investors bet on higher rates for longer as US economy shows resilience


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


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