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Breakfast Bites - Wed Aug 9, 2023

Rise and shine everyone

Some support for risk sentiment this morning from news that Italy will limit impact of planned windfall tax on bank profits. In addition, stocks closed off their worst levels on Tuesday, which saw a good start to this week's Treasury auctions following recent ramp in supply concerns and Apple managed to snap a five-day losing streak.

The big news this morning is China’s CPI Inflation number came in negative at -0.3% YoY.

US Equities are higher this morning alongside Oil and Bitcoin. Gold is flat and the US Dollar Index has pulled back marginally. The long-end of the treasury curve is lower and the yield curve remains inverted at -0.74%.

Asia and Australia

  • Asian equities mixed Wednesday. Nikkei underperformed amid negative market reactions to yesterday's post-close earnings. Hong Kong traded higher while Mainland China markets posted losses for the third straight day.

  • Offshore yuan rebounding from three-week low against dollar. Strength tabbed to a much stronger-than-expected fixing of the daily midpoint.

  • Country Garden's Troubles Mount as It Misses Offshore Bond Interest Payment

  • TSMC to build US$11 billion chip manufacturing plant in Germany.

  • US plan to restrict investment in China is likely to apply only to Chinese firms that earn at least half their revenue from cutting edge sectors such as quantum computing and AI.

  • South Korea unemployment rate rises to six-month high

Europe, Middle East, Africa

  • European equity markets higher, near best levels. Banks rallying as Italian government eased market fears surrounding surprise bank tax. Energy and miners also advance. Travel/leisure and healthcare lag.

  • Bank of England's rate rises risk tipping Britain into recession, economists warn.

  • Germany's property sector is in a slump, due to a combination of factors including rising interest rates, soaring building costs and the Ukraine war.

  • Primary gauge of long-term Eurozone price pressures climbs well above ECB target at 2.66%

The Americas

  • US banks suffer some $19B in loan losses as borrowers feel rate rise pain

  • Treasury auctions off to positive start with 3Y note sale producing lower-than-expected yield

  • KKR purchases prime auto loans as regional lenders sell assets to improve liquidity

  • WeWork says there's "substantial doubt" about its ability to continue operating

  • US judge rejects Google's proposal to dismiss $5B privacy lawsuit levied against company

  • Hedge funds close underperformance after bailing on record short positions, positioning now most bullish since Dec-21


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


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