By Mike Dolan. Investors may now be discovering what long-term government borrowing costs are really like when you remove the potential backstop of central bank intervention from the bond market. The main driver of surging U.S. long-bond borrowing rates this year is clear enough: the Iran war, the related oil shock, racing inflation and the inevitable speculation about interest-rate rises.
Japanese government bond prices slipped on Tuesday, erasing early gains, as investors awaited details of the government's planned extra budget and the Bank of Japan's upcoming policy decision.
China is expected to leave its benchmark lending rates unchanged for a 12th consecutive month in May, a Reuters survey showed, as ample interbank cash supplies reduced the need to cut rates despite weak economic and lending activities.
* Q1 real GDP grows annualised 2.1% vs forecast +1.7% * Consumption and capex both rise 0.3%, GDP data shows. * Net external demand adds 0.3 point to growth. * Analysts expect slowdown ahead as Iran war impact intensifies. By Leika Kihara.
Japan's economy grew an annualised 2.1% in the first quarter, government data showed on Tuesday, compared with the median market forecast for a 1.7% gain. The growth in gross domestic product translated into a quarterly increase of 0.5%, which compared with the median estimate for a 0.4% rise.
Australia's central bank is worried higher energy costs will feed through to consumer prices quickly given the stretched state of the domestic economy, potentially creating a significant shift in inflation expectations.
* Oil prices rise, reversing earlier dip. * Fed policy expectations shift as investors assess Chair Kevin Warsh's response to inflation. * Japanese yen weakens as government considers new debt. By Karen Brettell.
Veterans from the U.S. Federal Reserve's past crisis-fighting efforts on Monday said incoming Chair Kevin Warsh should focus less on the central bank's balance-sheet size and more on guidelines for how to use it in response to future financial and economic shocks.
Kevin Warsh will be sworn in as U.S. Federal Reserve chief on Friday by President Donald Trump, a White House official said on Monday, capping off the process of installing the 56-year-old lawyer and financier at the helm of the central bank as it grapples with intensifying inflation that may make it hard to push through the interest-rate cuts Trump so deeply desires.
* Kevin Warsh takes over Fed as war-and-tariff-induced inflation heats up. * Powell to remain on Fed board until criminal probe concludes. * Warsh's first policy meeting set for mid-June. * Need guidance from Warsh on inflation, Goolsbee says.
Kevin Warsh will be sworn in as U.S. Federal Reserve chief on Friday by President Donald Trump, a White House official said on Monday, putting the 56-year-old lawyer and financier at the helm of the central bank as it grapples with intensifying inflation that may make it hard to push through the interest-rate cuts Trump desires.
Kevin Warsh will be sworn in as the next chairman of the U.S. Federal Reserve on Friday in a White House ceremony hosted by U.S. President Donald Trump, Fox Business reported on Monday, citing a White House official.
* GDP fell 0.5% year-on-year, missing forecasts and led. * Chile's Q1 contraction is steepest since late 2022. * Copper output hit by lower ore grades, adverse weather, and maintenance disruptions. By Aida Pelaez-Fernandez and Natalia A. Ramos Miranda.
U.S. home builder sentiment unexpectedly improved in May, but construction firm attitudes about the housing market remain subdued as the war in Iran stokes inflation pressures that are elevating everything from building material prices to buyers' mortgage rates.
By Jamie McGeever. Accelerating inflation in the U.S. and beyond is leaving the Federal Reserve and other central banks with an acute problem - negative real interest rates. Unexpectedly strong U.S. inflation data last week pushed the real, inflation-adjusted fed funds rate below zero for the first time in three years.
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Chile's economy contracted 0.3% in the first quarter from the previous three-month period, central bank data showed on Monday, while economists in a Reuters poll had predicted a 0.2% decrease. On an annual basis, gross domestic product declined 0.5% in the period, missing expectations of 0.1% growth.
Brazil's economic activity grew 1.3% in the first quarter from the previous three months, central bank data showed on Monday, despite a sharper-than-expected contraction in March. The IBC-Br index, a proxy for gross domestic product, fell 0.7% in March from February on a seasonally adjusted basis, compared with a 0.2% drop expected in a Reuters poll.
The world's major economies have seen their debt levels surge in recent years, while ever-increasing spending demands - from ageing populations to climate change and defence - add to the pressure. With no end in sight to the conflict, the pressure is building as traders bet on central bank rate hikes and long-term borrowing costs march higher.
Economic activity in Brazil fell by a seasonally adjusted 0.7% in March from the previous month, according to a central bank index on Monday, a steeper drop than the 0.2% contraction expected by economists polled by Reuters. The IBC-Br index, a proxy for gross domestic product, expanded by 1.3% in the first quarter.
The US dollar fell against its major trading partners early Monday, except for a gain versus the yen, with the focus this week on minutes of the April 28-29 Federal Open Market Committee meeting to be released on Wednesday.
Euro zone bond yields rose on Monday amid a broader global bond selloff, with investors worried that higher energy prices amid the Middle East conflict could fuel inflation and prompt further interest rate hikes.
* Central bank seeks 30% offtake in dore form for improved traceability, official. * Miners concerned over proposed discount, citing unclear terms. * GoldBod designated gatekeeper for gold exports under revamped programme. By Maxwell Akalaare Adombila.
After eight years of friction with the White House, a global pandemic, and a fight with high inflation, the U.S. Federal Reserve begins a new era with former governor Kevin Warsh soon to be sworn in as chair. It will be a new era for President Donald Trump as well. In 2016, Powell was only a few months into his first term when Trump began berating him, annoyed at the Fed's interest-rate hikes.
* Warsh inherits high inflation, above Fed's 2% target, with pressure to address price stability. * Unemployment remains low at 4.3%, but debate continues over labor market strength and risks. * Warsh expected to consider shrinking Fed balance sheet, facing complex policy and market challenges. By Howard Schneider.
Syria will take part in a closed-door session with G7 finance ministers and central bank governors in Paris on Monday, a person familiar with the matter said, in a sign of its growing status less than two years after the ousting of Bashar al-Assad.
Led by broad increases across the services sector, the U.K. economy expanded in March, according to data from CoStar (CSGP), a global leading provider of online real estate marketplaces, information and analytics in the property markets. This press release features multimedia.
U.S. President Donald Trump conceded in an interview with Fortune magazine published on Monday that he may have to wait until the war with Iran was over for more interest rate cuts. "You can't really look at the figures until the war is over," he said.
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* Finance ministers and central bankers discuss inflation, volatility. * France puts deep-seated global economic imbalances on the agenda. * Lescure says G7 offers opportunity for frank dialogue. * Meeting follows US-China summit that yielded few economic breakthroughs. By Makiko Yamazaki, Maria Martinez and Alistair Smout.
Uganda's President Yoweri Museveni has signed into law a contentious measure that he says aims to curb foreign influence in the country despite heavy criticism from quarters such as the central bank, warning it could trigger "economic disaster".
* Companies face higher costs, supply disruptions, and operational changes. * Airlines, automakers, and other companies warn of profit hits. * Extra costs not yet showing up in earnings, analysts say. * Europe and Asia most affected by oil-price surge. By Medha Singh, Deborah Mary Sophia and Bernadette Hogg.
* IEA warns oil inventories depleting rapidly due to Strait of Hormuz closure. * Talks to end U.S.-Iran war stall despite Pakistani mediation, truce remains fragile. * Capital Economics warns prolonged closure could trigger global GDP downgrades and higher inflation. By Scott DiSavino.
* Tier-one cities see price rise, smaller cities and developers struggle. * Government incentives, state-backed purchases aim to stabilise market. By Liangping Gao, Yukun Zhang and Ryan Woo.
China's growth lost momentum in April, with industrial output cooling and retail sales sinking to over three-year lows as the world's second-biggest economy wrestled with higher energy costs from the Iran war and persistently weak domestic demand.
* China's April industrial output growth slowest since July 2023. * Consumer demand stays weak, as retail sales rise just 0.2% * Beijing unlikely to add immediate stimulus, economist says. * Trump visit to China eases trade tensions but produces few surprises.
China's industrial output grew 4.1% in April from a year earlier, slowing from the 5.7% pace in March, official data showed on Monday. The data released by the National Bureau of Statistics missed expectations for a 5.9% increase in a Reuters poll.
China's new home prices extended their decline in April, but fell at the slowest monthly pace in a year, official data showed on Monday, offering an early sign of improvement even as housing demand remained subdued despite efforts by cities across the country to boost sales and shore up sentiment.
Gold prices fell on Monday to their
lowest point in more than a month, as Middle East tensions
pushed oil prices higher, fuelling inflation fears and
reinforcing expectations of higher-for-longer ...
The dollar dipped against most major currencies on Monday as traders evaluated whether progress in ending the Iran war is likely in the near-term and whether central bankers will need to tighten policy if oil prices remain elevated.
Japanese government bond yields surged on Monday, with the benchmark 10-year yield reaching levels last seen in October 1996, extending a global debt selloff as pressure mounts on central banks to raise rates to contain inflation. The yield on the 10-year JGB climbed 7.5 basis points to 2.775%, after earlier touching an intraday high of 2.800%, a level last seen in October 1996.
Gold price continued its downward trend and is about to flash a death cross pattern as inflation jumps and top ETF outflows continued. American investors are dumping their gold ETF assets. These outflows have increased as odds that the Federal Reserve will cut interest rates ease.
The Federal Reserve Board on Friday said it has named Jerome Powell as chair pro tempore until Kevin Warsh is sworn in as the new head of the U.S. central bank. * Warsh is expected to be sworn in soon by U.S. President Donald Trump but no date has been announced. * Powell's eight-year run as Fed leader formally expired on Friday.
The Federal Reserve Board on Friday said it has named Jerome Powell as chair pro tempore until Kevin Warsh is sworn in as the new head of the U.S. central bank. -- Warsh is expected to be sworn in soon by U.S. President Donald Trump but no date has been announced. -- Powell's eight-year run as Fed leader formally expired on Friday.
The Federal Reserve Board on Friday said it has named Jerome Powell as chair pro tempore until Kevin Warsh is sworn in as the new head of the U.S. central bank.
The Federal Reserve Board on Friday said it has named Jerome Powell as chair pro tempore until Kevin Warsh is sworn in as the new head of the U.S. central bank.
Rate hikes appear to be more realistic following this week's hotter-than-expected consumer price index and producer price index data, said Kevin McGuigan, director at Municipal Market Analytics.
US annual consumer inflation is expected to reach 6% in the ongoing quarter and remain above 2% in the long term, a poll of economists by the Federal Reserve Bank of Philadelphia showed Friday. The headline consumer price index is expected to average 6% in the second quarter, according to the Fed branch's latest quarterly Survey of Professional Forecasters.
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.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
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