Breakfast Bites - Wed Jun 14, 2023

Rise and shine everyone.

Happy Fed Day! We get the FOMC rate decision at 2pm ET and the press conference at 2:30pm ET.

Prior to that we get the Producer Price Index (PPI) numbers at 8:30am ET. The estimates are for the both PPI and core-PPI to decline year-on-year.

The second biggest home builder, Lennar, reports after the close.

US Equity Futures are trading higher this morning, following yesterday’s higher close with the Headline CPI coming in cooler than expected. The US Dollar still remains depressed, while Bitcoin, Gold, Oil are all higher this morning. The Yield Curve remains heavily inverted at -0.85%.

Asia and Australia

• Asia equities finished mixed Wednesday as Hong Kong turned lower but Japan extended its winning streak. Hang Seng saw an across-the-board selloff to snap a five-day winning run while mainland bourses were mixed.

• China's PBOC may cut key policy rate Thursday, according to local press, Reuters survey

• China state planner launches measures to reduce business costs like VAT exemption, lowering interest on loans

• South Korea import and export prices fall the most since 2020 (Yonhap) as unemployment rate falls to record low

• Bloomberg economist survey showed New Zealand GDP growth may have contracted for second consecutive quarter in Q1 placing economy into technical recession. Economists forecast Q1 GDP fell 0.1% from Q4's 0.6% contraction

• Yen now only major currency with negative yield as dovish stance continues

Europe, Middle East, Africa

• European equity markets higher after moving off early lows.

• Eurozone industrial production posted partial recovery in April, increasing 1.0% m/m versus consensus 0.8% after dropping 3.8% in March revised up from 4.1%.

• Retailers and film industry help UK economy deliver slightly higher growth in April. UK monthly activity data showed the economy registered a modest 0.2% expansion in May, in line with consensus, after contracting -0.3% in prior month.

• Some ECB officials concerned about looming TLTRO repayments. Smaller Italian lenders the biggest concern, with Greek banks not far behind. Italian banks may tap repo market to repay TLTROs

The Americas

• Generative AI set to add up to $4.4T of value to global economy annually, according to a report from the NY Times

• Amazon Web Services considering using new AI chips from AMD

• US plans to purchase ~12M barrels of oil this year as it starts to refill SPR

• IEA says oil demand growth from post-pandemic recovery to end this year, peak before end of decade

• US judge grants temporarily block of Microsoft's acquisition of Activision Blizzard

• US lawmakers propose to end tariff exemption for China e-commerce shipments

Calendars

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