A wild first half of the year is almost over, with focus shifting to how central banks, especially the Federal Reserve, steer markets in the months ahead. The new Fed chief attends the European Central Bank's Sintra conference, while U.S. jobs numbers, euro zone inflation readings, British politics and tech are in focus.
Japanese government bond yields rose on Monday as concerns over inflation intensified after local media reported the government may push the Bank of Japan to align its decisions with Prime Minister Sanae Takaichi's pro-growth economic agenda. Here are a few details: * The benchmark 10-year JGB yield rose 5 basis points to 2.645%. Yields move inversely to bond prices.
* Iran, U.S. agree to halt attacks and renew talks, Axios reports. * Iran launched strikes on U.S. military sites in Bahrain, Kuwait. * U.S. ADP employment and NFP data due this week. By Pablo Sinha. Gold prices eased on Monday as recent U.S.-Iran strikes in the Gulf pushed oil prices higher, while expectations of U.S. Federal Reserve interest rate hikes further weighed on the non-yielding metal.
* Dollar at one-year highs, keeps yen near intervention zone. * Oil prices rise on peace deal uncertainty. * U.S. rate-hike odds keep dollar supported. * Tech valuation worries linger. By Ankur Banerjee.
China's central bank on Monday debuted overnight reverse repo operations, offering 300 billion yuan to financial institutions, according to an online statement. The People's Bank of China did not announce the borrowing cost for the overnight reverse repos. The PBOC also said it injected 157.5 billion yuan through seven-day reverse repos, with the rate unchanged at 1.4%, it said in the statement.
Gold prices slipped on Monday as renewed
U.S.-Iran hostilities pushed oil prices higher, while
expectations of U.S. Federal Reserve interest rate hikes further
weighed on the metal.
Sovereign wealth funds and central banks managing $29 trillion in assets are turning to energy assets, and raising concerns about the dollar, in a portfolio reassessment driven by unprecedented geopolitical shifts, according to an Invesco survey published on Monday.
* 61% of central banks say US debt hurts the dollar's long-term reserve role, Invesco found. * One-third plan to increase gold holdings as part of diversification, the survey found. * Some reviewing reliance on U.S.-based custodians, counterparties and clearing infrastructure. By Libby George.
* Payrolls data for June due on Thursday. * Swings in tech, semiconductor shares keep investors on edge. * Rate-hike bets in focus following hawkish Fed meeting. By Lewis Krauskopf.
Federal Reserve Chairman Kevin Warsh's early leadership of the U.S. central bank faces fresh tests this week, with an appearance before a high-profile economic conference in Portugal and the U.S. Supreme Court's expected ruling on the legality of President Donald Trump's effort to fire a Fed policymaker.
* US Supreme Court expected to rule on whether Fed Governor Cook keeps her board seat. * Legal case is key to future presidential influence over Fed. * Warsh to join ECB, BOE and Bank of Canada leaders at conference in Portugal. By Howard Schneider.
Strategic petroleum releases helped avert a sharper rise in oil prices as a result of the war in the Middle East, but the global economy faces significant downside risks if a fragile ceasefire between the U.S. and Iran doesn't hold, IMF chief economist Pierre-Olivier Gourinchas said on Friday.
The Toronto Stock Exchange rose on Friday as investors assessed easing geopolitical tensions in the Middle East and fresh economic data that reinforced expectations for a potential Bank of Canada interest-rate cut. The S&P/TSX Composite Index closed up 129.79 points, or 0.37%, to 34,980.00, with sectors closing mixed.
* Dollar eases but on pace for strong June. * Yen remains at levels primed for intervention. * Consumer sentiment gauge increases but below estimate. The dollar fell for a second straight session on Friday as recent economic data and a drop in oil prices slightly cooled expectations for Federal Reserve rate hikes, although the yen remained in territory that left it primed for an intervention.
Canada's Consumer Price Index in May rose 0.95% in non-seasonally adjusted terms, following a 0.36% increase in April, and above consensus expectations of a 0.8% increase, National Bank's weekly economic monitor reports. In seasonally adjusted terms, prices edged up 0.48% in May after advancing 0.36% in April. April's GDP data will be released next Tuesday.
US consumer sentiment increased in June amid moderating gasoline prices, while inflation expectations eased, a survey by the University of Michigan showed Friday. The main sentiment index jumped nearly 11% sequentially to 49.5 this month. The improvement in sentiment came as gas prices moderated, according to Surveys of Consumers Director Joanne Hsu.
Global trade flows and relationships are shifting after U.S. President Donald Trump imposed unilateral tariffs on most countries, but the U.S. dollar continues to anchor international trade, banking and central bank reserves, the International Monetary Fund's chief economist said on Friday.
Global trade flows and relationships are shifting after U.S. President Donald Trump imposed unilateral tariffs on most countries, but the U.S. dollar continues to anchor international trade, banking and central bank reserves, the International Monetary Fund's chief economist said on Friday.
The International Monetary Fund's chief economist on Friday said Federal Reserve Chair Kevin Warsh's plan to reduce forward rate guidance on monetary policy was "entirely appropriate," although central banks would always need to provide some long-term guidance for markets.
* IMF top economist OK with Fed's Warsh backing off from forward guidance. * Fed's move under Warsh sends a strong signal. * Have seen other central banks reducing guidance as well. By Andrea Shalal.
* Indexes up: Dow 0.08%, S&P 500 0.23%, Nasdaq 0.28% * OpenAI considering to hold off IPO until next year - report. * Philadelphia chips index set for worst week since March 2025. * Healthcare, Staples gain offset tech weakness. By Shashwat Chauhan and Joel Jose.
AM Best has affirmed the Financial Strength Rating of A and the Long-Term Issuer Credit Rating of ?a+? of Royal Bank of Canada Insurance Company Ltd.. The outlook of these Credit Ratings is stable.
* Dollar eases but on pace for strong June. * Yen remains at levels primed for intervention. * Consumer sentiment gauge increases but below estimate. The dollar slipped for a second straight session on Friday as recent economic data and a drop in oil prices cooled expectations for Federal Reserve rate hikes, although the yen remained in territory that left it primed for an intervention.
The Federal Reserve is likely to maintain interest rates stable for the rest of the year, despite its recent hawkish monetary policy statement, as inflation looks set to ease, Morgan Stanley said Friday in a report.
* Goods trade deficit widens 27.4% to $105.8 billion in May. * Goods imports jump 3.6% to $313.4 billion, a 14-month high. * Exports of goods drop 5.4% to $207.7 billion. By Lucia Mutikani.
U.S. consumer sentiment rebounded from record lows in June, though households remained worried about the high cost of living, a survey showed on Friday. The University of Michigan's Surveys of Consumers said its Consumer Sentiment Index increased to a final reading of 49.5 this month from 44.8 in May. It was a slight improvement from 48.9 earlier this month.
U.S. consumer sentiment rebounded from record lows in June, though households remained worried about the high cost of living, a survey showed on Friday. "The cost of living remains at the forefront of consumers' minds," said Joanne Hsu, the director of the Surveys of Consumers.
The University of Michigan consumer sentiment index was revised upwards on Friday to a reading of 49.5 for June from 48.9 in the preliminary estimate, below expectations for a slightly larger revision to 50.0 in a survey compiled by Bloomberg as of 7:30 am ET.
* Indexes down: Dow 0.44%, S&P 500 0.83%, Nasdaq 1.33% * OpenAI considering to hold off IPO until next year - report. * Synaptics (SYNA) up as Onsemi to buy co in $7 bln all-stock deal. By Shashwat Chauhan and Joel Jose.
* Futures down: Dow 0.24%, S&P 500 0.52%, Nasdaq 1.3% * OpenAI considering to hold off IPO until next year - report. * Synaptics (SYNA) up as Onsemi to buy co in $7 bln all-stock deal. By Shashwat Chauhan and Joel Jose.
The U.S. trade deficit in goods swelled to a 14-month high in May as businesses boosted imports, likely to avoid shortages and higher prices related to the war in the Middle East, prompting economists to cut their growth estimates for the second quarter. The sharp deterioration in the goods trade deficit, reported by the Commerce Department on Friday, also reflected a decline in exports.
The U.S. trade deficit in goods widened sharply in May as businesses boosted imports to avoid shortages and higher prices related to the Middle East conflict, which could see economists cut their estimates for second-quarter gross domestic product. The goods trade gap increased 27.4% to $105.8 billion last month, the Commerce Department's Census Bureau said on Friday.
* BRAZIL'S CENTRAL BANK SELLS 20,000 REVERSE FX SWAP CONTRACTS AT AUCTION - STATEMENT. * BRAZIL'S CENTRAL BANK SELLS $1 BLN IN SPOT DOLLAR AUCTION - STATEMENT.
Brazil's current account deficit reached $3.185 billion in May, central bank data showed on Friday, narrower than the $4.159 billion shortfall expected in a Reuters poll. Foreign direct investment totaled $7.974 billion for the month, topping the $5.750 billion estimated in the poll.
Strong support for maintaining Canada's 2% inflation target and flexible inflation-targeting framework emerged as a key finding in the Bank of Canada's latest consultation report published on Thursday, ahead of its 2026 monetary policy framework renewal.
* Yen remains in intervention danger zone. * Dollar takes a step back but set for strong June. By Dhara Ranasinghe and Gregor Stuart Hunter. The dollar slipped against most other major currencies on Friday as Federal Reserve rate hike bets were tempered a touch by the latest economic data and falling oil prices, allowing the yen - trading in an intervention danger zone - to find firmer ground.
Federal Reserve Chairman Kevin Warsh has chosen longtime economists at the US central bank, Daniel Covitz and Eric Engstrom, to serve as advisers, The Wall Street Journal reported Friday, citing people familiar with the matter. Covitz is one of three deputy directors in the Fed's division of research and statistics, while Engstrom is a senior associate director in the division of monetary affairs.
The U.S. Federal Reserve will hold its benchmark interest rate steady for the rest of this year, defying financial market pricing for two hikes, according to an even larger majority of economists polled by Reuters. Inflation is running above 4%, the highest in more than three years and double the Fed's target, alongside solid growth and improving labour market conditions.
* Payrolls data for June due on Thursday. * Swings in tech, semiconductor shares keep investors on edge. * Rate-hike bets in focus following hawkish Fed meeting. By Lewis Krauskopf.
* All precious metals head for weekly loss. * Sustained break below $4,000 could see bears test $3,886, analyst says. * Traders see 61% chance of a September rate hike - CME FedWatch. By Sumit Saha. Gold prices gained on Friday as recent U.S. inflation data weighed on the dollar and led markets to slightly trim rate-hike bets.
U.S. Federal Reserve Chairman Kevin Warsh has tapped veteran Fed staff economists Daniel Covitz and Eric Engstrom to serve as advisers, experts whose recent work included a critical look at the Fed's Summary of Economic Projections and the reasons behind rising U.S. Treasury yields. The appointments were first reported by the Wall Street Journal and confirmed by a source familiar with them.
* Futures down: Dow 0.11%, S&P 500 0.53%, Nasdaq 1.16% Futures tied to the tech-heavy Nasdaq led Wall Street losses on Friday, as chip stocks came under renewed pressure after a sharp rally in the previous session, while some megacap technology names also slipped.
Federal Reserve Chairman Kevin Warsh has tapped Daniel Covitz and Eric Engstrom, two veteran central-bank economists, to serve as advisers, the Wall Street Journal reported on Friday, citing people familiar with the matter. Reuters could not immediately confirm the report.
Global equity fund inflows slowed sharply in the week to June 24, as concerns over debt-funded technology spending and a hawkish stance of the U.S. Federal Reserve cooled risk appetite. Investors purchased a net $7.51 billion worth of global equity funds during the week, down about 86% from net buying of $55.53 billion in the previous week, according to LSEG Lipper data.
Global equity fund inflows slowed sharply in the week to June 24, as concerns over debt-funded technology spending and a hawkish stance of the U.S. Federal Reserve cooled risk appetite. Investors purchased a net $7.51 billion worth of global equity funds during the week, down about 86% from net buying of $55.53 billion in the previous week, according to LSEG Lipper data.
* Tokyo CPI accelerates in sign of widening Iran war price pressures. * Dollar sags as US data, Fed comments spur paring of rate-hike bets. * Yen remains in intervention danger zone at weaker than 160 per dollar. By Dhara Ranasinghe and Gregor Stuart Hunter.
* All precious metals head for weekly loss. * Dollar on track for second consecutive weekly gain. * U.S. PCE surged 4.1% in the 12-month period ended May. By Pablo Sinha. Gold prices were on track for a fourth consecutive weekly fall on Friday, as a resilient dollar and expectations of faster U.S. rate hikes to tame inflation kept bullion pressured near the key $4,000-per-ounce level.
- A wild first half of the year is almost over, with focus shifting to how central banks, especially the Federal Reserve, steer markets in the months ahead. The new Fed chief attends the European Central Bank's Sintra conference, while U.S. jobs numbers, euro zone inflation readings, British politics and tech are in focus.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
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