Thursday Morning Market Headlines

Five Stories Moving the Market:

China’s consumer inflation slowest in a year – Reuters. China's annual consumer inflation slowed down in February as consumers remained cautious despite the abandonment of strong pandemic controls late last year, official data showed on Thursday.

Bank of Canada holds rates at 4.5% - Bloomberg. The Bank of Canada kept interest rates unchanged for the first time in nine meetings, saying it’s prepared to hike again if the economy veers off its forecast course.

Fed survey shows U.S. businesses see a moderation in inflation ahead – Reuters. U.S. economic activity increased slightly from January through late February and price increases remained widespread, but businesses reported a moderation in inflation that they expect to continue this year, the Federal Reserve said in a report on Wednesday.

Powell says ‘no decision’ made on speeding up the pace of rate hikes – Bloomberg. Federal Reserve Chair Jerome Powell stressed that policymakers had not yet made up their minds on the size of their interest-rate increase later this month and said it would hinge on incoming data on jobs and inflation.

Biden budget proposes saving hundreds of billions by cutting drug prices, fraud – WSJ. President Biden’s budget blueprint will lay out plans to save hundreds of billions of dollars by seeking to lower drug prices, raising some business taxes, cracking down on fraud, and cutting spending he sees as wasteful, according to White House officials.

Market Headlines:

Global Macro:

Japan’s economy expanded less than initially estimated in the three months through December, reflecting the multiple struggles that Japan faces including a global economic slowdown and inflation – Bloomberg.

Germany’s federal prosecutor said that investigators looking into the alleged sabotage of the Nord Stream pipelines in the Baltic Sea have searched a boat they say could have been used to transport explosives for the suspected attack last fall - WSJ.

The U.K. will avoid a recession this year, but sluggish growth means the economy will not recover to pre-pandemic levels until the final quarter of 2024, according to the British Chambers of Commerce – Bloomberg.

Ukrainians say Russia’s Wagner mercenary group is running low on fighters recruited from prisons, used in attacks on Bakhmut, where Ukraine has also endured heavy losses; Wagner is considered to be Moscow’s best and most effective fighting unit – NY Times.

British property surveyors grew less gloomy about the prospects for the housing market in February as a slump in new buyer inquiries eased, but reports of falling house prices hit a 14-year high, a survey showed on Thursday – Reuters.

The U.S. is set to lift COVID-19 testing requirements for travelers from China as soon as this week, people familiar with the matter said, a significant step toward normalizing links between the two countries as the pandemic recedes - Bloomberg.

U.S. President Joe Biden and European Commission President Ursula von der Leyen are expected to agree on Friday to begin negotiations on ensuring free-trade agreement-like status for the European Union, two sources familiar with the plans said on Wednesday – Reuters.

The boom in oil production that over the last decade made the U.S. the world’s largest producer is waning, suggesting the era of shale growth is nearing its peak; frackers are hitting fewer big gushers in the Permian Basin, America’s busiest oil patch - WSJ.

Vacancies at U.S. employers retreated at the start of the year but remained historically elevated, highlighting persistent labor tightness that supports a higher level of interest rates from the Federal Reserve - Bloomberg.

The economy proved resilient to start the new year, marked by steady consumer spending and stabilizing manufacturing activity, contacts surveyed in the Federal Reserve’s latest Beige Book said – Bloomberg.

American women are staging a return to the workforce that is helping propel the economy in the face of high inflation and rising interest rates - WSJ.

Company Specific:

Apple is reshuffling management of its international businesses to put a bigger focus on India, Bloomberg News reported on Wednesday citing people with knowledge of the matter – Reuters.

Short sellers are making a fortune by loading up on bets against struggling crypto-friendly bank Silvergate Capital; shares have plunged roughly 98% from a November 2021 peak, earning bearish bettors about $780 million in mark-to-market profits in the process – Bloomberg.

China’s BYD, having risen over the past decade to become one of the top global sellers of electric passenger cars, is now plotting a big push into battery-electric commercial vehicles – WSJ.

General Motors Chief Executive Mary Barra has called 2023 a breakout year for the company’s electric-vehicle push. It is off to a slow start – WSJ.