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Breakfast Bites - Wed Jul 05, 2023

Rise and shine everyone

The major economic release today is the FOMC meeting minutes later at 2pm ET. We will be looking for details on the Fed’s thinking around inflation and their revised projections. We’ll also be looking out for discussions around the banking crisis, and Treasury issuances & the effect on RRP and bank reserves.

US Equity Markets are trading lower this morning, alongside Bitcoin. The US Dollar, Gold, and Oil are all trading higher. The Yield Curve is still at -105bps after hitting close to -110bps on Monday.

Asia and Australia

  • Asia stocks finished lower Wednesday as risk sentiment turned negative once more. Losses led by Hong Kong that reversed Tuesday's positive moves, mainland China stocks also lower.

  • The Caixin China General Services PMI fell to 53.9 in June 2023 from 57.1 in the previous month. While the number still remains in expansionary territory, we're still seeing a gradual decline in the numbers which is not encouraging for consumption and economic growth.

  • Investors lower expectations for Asian equity gains on faltering China growth, tight monetary policy. Geographically India and Japan stocks may benefit from economic growth and supportive policies.

  • Singapore central bank chief says economic outlook dimmed for the country

  • RBA paused hikes yesterday but left the door open for further hikes.

  • Shein in talks with banks and exchanges about US IPO

Europe, Middle East, Africa

  • European equity markets lower.

  • China's rare earth metal export ban poses disruption and risks for European semiconductors

  • The Eurozone’s Global Composite PMI falls to 49.9 into contractionary territory.

  • Upcoming Q2 reporting season previews in the spotlight. Refinitiv I/B/E/S data showed Stoxx 600 Q2 earnings are expected to fall 7.4% from a year earlier but analysts noted that these low expectations does offer opportunities for Corporate Europe to deliver profit beats.

  • UK flow data shows equity funds dumped in favor of high yields, safe havens; The risk for UK interest rates is skewed to higher for longer levels as the BoE grapples with high inflation.

  • Eurozone inflation may be running high, but real economy showing clearer signs of demand and credit stress, highlighted by PMIs and bank lending surveys. This could compel the ECB to pause sooner than expected.

  • JPMorgan flags risks to UK housebuilders due higher rate environment. Sector valuations still above October 2022 levels, but sees potential softening in sales rates due to uncertainty on rates.

The Americas

  • It’s a slow newsday in the US, after the July 4th holiday.

  • US preparing to restrict Chinese companies' access to cloud-computing services

  • Talks collapse between UPS and Teamsters

  • Rivian Automotive: Amazon (AMZN) rolls out first electric delivery vans from Rivian in Europe


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


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