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Livesquawk - Closing Wrap - Tuesday 13.07
Closing Wrap - Tuesday 13.07
  • Long-Dated Yields Jump After Weak 30-Year Bond Auction
  • Bipartisan Infrastructure Deal Stalls As Bigger Plan Gains
  • Yellen: Prepared To Launch Treasury Debt Limit Measures
  • EU Approves Investment Plans Of Italy, France, Spain
  • BoE Warns Junk-Debt Froth Could Amplify Any Downturn
  • UK Trade Secretary Downplays Outlook For US Trade Deal Soon
  • J&J, Astra Explore Vaccine Modification In Response To Rare Blood Clots
  • Boeing Cuts 787 Production As New Structural Problem Discovered
  • Fiat-Chrysler Also Charged In French 'Dieselgate' Case
US Inflation Hits 13-Year High In June On Supply Bottlenecks

US inflation surged last month as prices saw the largest one-month change since June 2008.  


The US Bureau of Labor Statistics said CPI rose 0.9% month-on-month in June, exceeding the 0.5% expected and the 0.6% last month. Annually, CPI increased 5.4% compared with May’s 5.0%. In the 12 months to June, core CPI jumped to its highest level since 1991, and the 4.5% reading beat the 4.0% forecast and the 3.8% mark from May.  


Morgan Stanley analysts said the mix of drivers on the upside in June looked similar to prior two months, with the bulk of price support coming from transitory shifts in components impacted by supply bottlenecks as well as the ongoing recovery in reopening-sensitive sectors. Underlying, and the likely more persistent components, remained firm. 


The bureau said the “index for used cars and trucks continued to rise sharply, increasing 10.5% in June. This increase accounted for more than one-third of the seasonally adjusted all items increase.” There was also upside contributions from food, up 0.8% in June from 0.4% in May, and the energy index, which increased 1.5% on the month.  (LiveSquawk - Continue Reading)

RBNZ Expected To Keep A Lid On Hike Expectations For Now

The Reserve Bank of New Zealand plans to change the name of its Official Cash Rate (OCR) announcements to Monetary Policy Reviews (MPR). This will likely be the only change when the central bank releases its latest monetary policy decision on Wednesday at 14.00 NZST/ 02.00 GMT. 


Analysts said they expect the bank’s Monetary Policy Committee to keep both its OCR (0.25%) and its large-scale asset purchase program (LSAP) unchanged.  


As one of the few nations to swiftly lockdown its borders in response to the global pandemic, New Zealand has seen its economy recover faster than most of its peers in the developed world. It recorded a strong start to the year, with GDP expanding 1.6% in the three months to March to outstrip the 0.5% consensus. (LiveSquawk - Continue Reading)

Bipartisan Infrastructure Deal Stalls As Bigger Plan Gains

A $1 trillion bipartisan infrastructure deal senators struck with President Joe Biden is at risk of stalling out as Republicans mount stiff resistance over ways to pay for it and momentum shifts to a more robust Democratic proposal that could come into focus as soon as Tuesday.


Biden's big infrastructure proposals are moving on parallel tracks in Congress in a race against time and political headwinds to make a once-in-a-generation investment in the nation. Senators from both groups are huddling privately again Tuesday to shore up their proposals. But opposition to the smaller bipartisan package is emerging from business leaders, outside activists and GOP senators, potentially denying it the support that's needed for passage.


“I’m going to take this day by day and participate in the process and see where we end up,” said Sen. Jerry Moran, R-Kan., who was part of the bipartisan group of 21 senators but is not fully committed to the plan. (AP - Continue Reading)

BofA Survey Signals Cyclical Boom Behind 2021 Rally Has Peaked

Global investors who have been optimistic about the economic recovery for most of this year are now scaling back their expectations, signaling that the cyclical boom behind this year’s rally is running out of steam.


This is the takeaway from the Bank of America Corp.’s monthly fund manager survey in the week through July 8. Participants with $742 billion under management slashed their outlook for global growth and corporate profits, while predictions of a steeper yield curve fell to a two-year low.


The change in preferences reflected the souring mood on the pace of economic recovery as BofA said market players trimmed their exposure to cyclical, value and small cap stocks -- some of this year’s top performers -- and shifted into technology, growth and large-caps.


Investors around the world are mulling their next steps as equities trade at record highs while concerns over the rapid spread of the delta variant and possible curbs on stimulus measures weigh on appetite for risk assets. Cyclical and cheaper stocks have been underperforming companies with higher profit growth over the past month as market participants turn more cautious. (Bloomberg - Continue Reading)

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