Breakfast Bites - Thu Aug 03, 2023

Rise and shine everyone.

Happy Apple earnings day! It’s already been quite the week without major earnings causing additional volatility but the big one is still yet to come, after the market close. And if that wasn’t enough, Amazon, Coinbase, Square (Block), AirBNB and Cloudflare also report after the close.

US Equity Futures continue to trade lower this morning, after yesterday’s sell off. August has not had a good start. The US Dollar, Gold and Bitcoin remain flat. Oil is trading lower. Treasury rates are higher particularly the long end with the Yield Curve steepening to -0.76%.

We get the ISM Services number later today, and Jobless Claims.

Asia and Australia

• Asian equities mixed Thursday. Nikkei and Hang Seng extended losses. ASX and Kospi lower too. Mainland China stocks closed higher. Taiwan closed due to typhoon.

• PBOC may cut commercial lenders' RRR as soon as this month to boost lending and revive recovery.

• China's Caixin services activity expands at a slightly faster pace in July, supported by jump in summer travel season

• Japan's July service sector activity expands at slightly slower pace as new business growth eases, cost pressures stay high

• JGB yields are rising (hitting a nine-year high 0.625% Wednesday), though yen has unexpectedly weakened on the remote prospects for an end to easing.

• Toyota to Ramp Up Electric Car Push in China With R&D Revamp

Europe, Middle East, Africa

• European equity markets softer, yet off the worst levels. Tech, telecom and autos biggest fallers; banks and retail outperform.

• The Bank of England raises rates by 25bps, as we thought they would. With inflation numbers coming in softer last month, they had the leeway to go with a smaller hike.

• July PMI shows Eurozone business activity contracting with the reading at an eight-month low of 48.6 versus flash 48.9 and prior 49.9. Loss of momentum is due to ongoing weakness in manufacturing, but services sector activity also slowed.

• July PMIs show UK services sector growth slows to six month lows as new order growth continues to ease

• BOJ kept its purchase offer amounts unchanged from previous operation raising questions about its exit from policy easing

The Americas

• Brazil cuts their Selic rate by 50bps surprising the market. Consensus was for a 25bps cut. The current rate is now 13.25%. Brazil is expecting to cut rates further this year but, not down to drastically low levels.

• Fitch's downgrade shines spotlight on Congress' inability to rein in the more than $31T in long-term debt

• Ackman shorting 30-year Treasuries on concerns about supply ramp - this is not necessarily something we would

• Qualcomm is the latest chipmaker to report weaker than expected results. Management said they expect flat overall handset chips growth q/q for the September quarter (and down 27% y/y) as inventory correct continues for both Android and iPhone.

Calendars

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