Breakfast Bites - Thu Jun 29, 2023

Rise and shine everyone.

Yesterday’s conference where the major Central Bankers spoke was quite interesting. Most heads signalled further tightening with Chair Powell still discussing a soft landing. Governor Ueda was quite the hit with his witty comments but, was not too firm of a change in policy. In fact, he still insists that wage growth numbers are not sufficient and inflation isn’t stable.

In other news, the Fed’s stress test shows big US banks can withstand severe recession and CRE turmoil.

We have final GDP, pending homes sales and initial jobless claims numbers coming out today. We also have Nike reporting after the close.

US Equity Futures are trading higher this morning along with Gold, Oil and Bitcoin. Copper and the US Dollar pulls back. The Yield Curve falls below -1% again.

Asia and Australia

• Asian equities mostly lower Thursday. Hang Seng underperformed, mainland China equities lower, Nikkei pared earlier gains. Australia and Taiwan closed flat while Korea lower. Several southeast Asia countries and India closed for a holiday.

• Yuan pessimism lingers despite PBOC's third stronger-than-expected fixing this week

• BOJ Ueda sees "good reason" to adjust policy if inflation re-accelerates into 2024

• Japan retail sales rebound, foreigners turn net sellers of Japan stocks

• Australian retail sales rose 0.7% m/m in May, significantly higher than consensus for a 0.1% increase and April's flat result.

Europe, Middle East, Africa

• European equity markets mixed. autos/parts and retail best performers; chemicals and utilities lag

• Sweden's central bank hiked rates by 0.25% and signaled at least one more hike this year

• ECB evidently more concerned about wage-price spirals, with markets expecting rates in Europe to remain higher for longer than in US. ECB to lean on rate hikes rather than balance sheet to fight inflation

• German “state” inflation numbers accelerated in June, pushing back against the notion that inflation may have peaked. Overall inflation numbers are out later today.

• June Spanish preliminary CPI cools to +1.6% y/y vs consensus of +1.5% and prior month reading of +2.9%, while on the month, it came in at +0.6% m/m vs consensus +0.4% and prior month (0.1%).

The Americas

• Micron gives upbeat sales forecast as chip glut eases

• Oracle to spend billions of dollars on Nvidia chips as it expands cloud computing service

• UPS Teamsters walk away from bargaining table, say strike imminent

• Bed Bath & Beyond to split Buy Buy Baby auction into two phases as it struggles to find buyers

• CBO says federal debt held by public to reach 181% of GDP by 2053

Calendars

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