Breakfast Bites - Wed May 24, 2023

Rise and shine everyone.

Debt limit talks are stalling and the market is not taking this too well. The S&P500 sold off yesterday closing at 4145, below the 4150 mark.

US Futures are trading lower this morning, along with US Treasury rates, copper and BItcoin. Gold and Oil are up.

We have the FOMC meeting minutes coming out later today at 2pm ET. Given that Fed speakers still remain divided on a future rate hike, we will be looking for discussion around that point and any particular concerns about stresses to the economy.

Nvidia reports after the close.

Asia and Australia

• Major Asian equity benchmarks ended weaker Wednesday with China's CSI 300 at 22-week lows. Japan closed lower for the second day with more profit taking in evidence after breaking multi-decade highs earlier this week.

• RBNZ raised OCR by 25 bp to 5.50% as expected; maintained its forecast for a peak OCR of 5.50%, contrasting with consensus for a higher terminal rate.

• Chinese equities extended declines Tuesday with CSI300 erased gains for the year as headwinds intensify

• New Zealand Q1 retail sales fell 1.4% q/q, worse than Q4's downwardly revised 1.0% decline and contrasting with expectations for a 0.2% increase.

Europe, Middle East, Africa

• European equity market lower. UK homebuilders and broader EU luxury under pressure on Wednesday,

• UK inflation eased in April but surprised to the upside with an 8.7% y/y outturn versus consensus 8.2% and prior 10.1%. The fall was entirely down to electricity and gas prices. Core inflation remains at its highest since March 1992

• Latest German Ifo business climate survey missed expectations. May headline index at 91.7 versus consensus 93.0 and prior 93.4

• UK Gilts under pressure after upside surprise in UK inflation, which has triggered a ramp up in BoE rate hike bets.

The Americas

• Treasury Department has asked federal agencies whether they can make upcoming payments at a later date

• Treasury bills due in early June around potential default continue to include significant yield premium

• PacWest reaches deal to sell real-estate lending division

• The world’s 1,200 biggest public companies collectively issued $326.7bn in dividends in the first quarter of 2023, a rise of 12 per cent on the same period a year ago, according to a quarterly report from fund manager Janus Henderson.

Calendars

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