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Breakfast Bites - Wed Jul 12, 2023

Rise and shine everyone


We have the CPI report being released today at 8:30am ET. The expectation is for a drop from 4% to 3.1% at the headline level and a drop from 5.3% to 5% at the core level.


The US Dollar has been softer for the past week, with the Yen and Euro soaring past key levels. If inflation comes in weaker than expected, we may see the US Dollar weaken further.


US Equity markets are trading higher in anticipation of weaker inflation numbers. Bitcoin, Gold and Oil are marginally higher this morning. Rates continue to trade down with the Yield Curve inverting again to -0.91%.


We also get the Bank of Canada’s rate decision today at 10am ET and consensus is for a hike of 0.25% after a similar hike last month post a pause.

This will take rates to 5% and all eyes will be on whether this is where rates peak.


Asia and Australia

  • Asian equities ended mixed Wednesday. More gains for Hong Kong stocks to continue this week's trend however mainland stocks were lower. Japan's Nikkei closed at one-month low.

  • The Reserve Bank of New Zealand held rates steady as expected at 5.5%

  • Japan’s Core machinery orders fell 7.6% m/m in May, notably weaker than expectations of a 1.0% rise and falling back from 5.5% growth in the previous month.

  • In a speech, RBA Governor Lowe said it remains to be determined whether more rate hikes are needed, though this will depend on evolution of economy and inflation.

  • Chinese auto sales grew 9.8% in the first half, helped by low base

  • Thai Court to decide if PM candidate Pita should be disqualified as lawmaker in blow to democratic parties.

  • China lending stronger than expected with new loans increasing to CNY3.05T in June, above consensus CNY2.34T and follows CNY1.36T in the previous month.


Europe, Middle East, Africa

  • European equity markets broadly higher. Basic resources, tech and banks advance; travel/leisure and healthcare lag

  • Previews for the Q2 reporting season broadly expect it to be mixed. Refinitiv data forecasts Q2 Stoxx 600 earnings to decrease 8.3% from Q2'22, but ex-Energy sector, earnings seen increasing 4.4%.

  • Italy to request more post-COVID funds from EU despite payment delay

  • BoE Governor Bailey Bailey appeared to signal more rate hikes at Financial Stability press conference.


The Americas

  • Judge's ruling that Microsoft can close Activision deal could spur more M&A

  • Global PC shipments fell 12% in Q2, an improvement from the 30% declines the past two quarters

  • Disney exploring options to sell or find a joint venture partner for its India digital and TV business

  • US consumers planning double-digit cuts to their budgets for back-to-school supplies

  • Businesses are starting to cut workers’ hours, forcing hundreds of thousands of people into part-time roles, in what could be an early warning sign for the economy.


Calendars

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



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