Breakfast Bites - Wed Jun 7, 2023
BoC rate meeting today; China's exports dropped -7.5% YoY; German Industrial Production below expectations; Australian GDP weakest since 2021
Rise and shine everyone.
The major economic data today is the Bank of Canada’s rate meeting. We also have a few interesting retail earnings.
Market still seems to be in waiting mode for CPI and Fed next week. Path of least resistance has been higher. Treasury set to ramp up bill supply this week to rebuild the TGA following the deal to suspend the debt ceiling through 1-Jan-2025. Monday was $65B in 13-week bills and $58B in 26-week bills, while Tuesday had the 4- and 8-week bill announcements.
S&P futures down 0.1% in Wednesday morning trading after US equities finished mostly higher in a fairly uneventful Tuesday session that saw some upside leadership from small-caps and cyclical plays. Treasuries firmer across the curve after yields backed up in the prior session. Dollar index down 0.1%. Gold off 0.2%. Bitcoin futures off 0.3%. WTI crude up 0.2%.
Asia and Australia
Asia equities ended mixed Wednesday as profit taking took hold in Japan but the Hang Seng rose again. The Japanese Nikkei fell -1.82%.
China trade surplus shrinks as exports see bigger-than-expected drop. Exports fell 7.5% y/y in dollar terms, compared to consensus drop of 1.8% and follows an 8.5% growth in prior month. Imports shrank 4.5%, versus consensus of an 8% drop and the surprising 7.9% drop in the previous month.
Australia GDP posts weakest growth since 2021 Covid lockdown. Q1 GDP expanded 0.2% q/q, compared to consensus 0.3% and follows revised 0.6% in the previous quarter.
RBA Governor Lowe reiterates some further tightening may be required for Australia.
S&P ratings says China property liquidation risk heightened by delisting threat
US VC giant Sequoia to split off China business
Europe, Middle East, Africa
European equity markets lower. STOXX 600 (0.2%), FTSE 100 (unch), DAX (0.4%), CAC (0.4%)
ECB's Schnabel says central bank hasn't finished raising interest rates as core inflation remains to be too stubborn
Germany's labor shortage could slow economic growth
German Industrial Production for April missed expectations at 0.3% m/m vs 0.6% expected
UK Halifax house price data shows a flat reading in May, but on an annual basis prices fell 1%
ECB April Consumer Expectations Survey suggested inflation over next 12 months seen at 4.1% vs 5.0% prior.
The Americas
Salesforce CEO Marc Benioff shakes up executive ranks; hints at CEO succession plan
Microsoft president Brad Smith meets with UK Chancellor Jeremy Hunt, seeks "solutions" to Activision deal
Amazon (AMZN) upgraded to Outperform from Neutral at Edgewater Research
UnitedHealth authorized a 14% increase to its quarterly cash dividend
Bulls in the Investor's Intelligence report pushed up to 51.3% in the week-ended 6-Jun from 47.9% in the prior week, above the 50.7% mid-April peak and the highest since the "danger level" reading of 57.2% in November 2021.
Calendars
(news taken from Reuters, FT, Bloomberg; Calendar from Benzinga Pro)
Economic
Earnings
Pre-market Movers
Damn, now I am hungry for french toast!