U.S. President Donald Trump signed an executive order on Tuesday calling on regulators and the Federal Reserve to review rules that may be stifling financial innovation, including whether the central bank could expand fintech access to its payment rails, the systems that move money between banks.
The current level of interest rates is appropriate for the moment, putting downward pressure on inflation at a time when price pressures remain elevated, Philadelphia Federal Reserve Bank President Anna Paulson said on Tuesday, but she added it was "healthy" that investors had begun considering scenarios where rates might need to rise.
U.S. President Donald Trump signed an executive order on Tuesday calling on regulators and the Federal Reserve to review rules that may be stifling financial innovation, including whether the central bank could expand fintech access to its payment rails, the systems that move money between banks.
G7 finance ministers agreed on Tuesday on the need for action to tackle trade imbalances in a fragmented global economy, saying the current situation was unsustainable with U.S. Treasury Secretary Scott Bessent arguing for more protections against a flood of cheap Chinese imports.
The current level of interest rates is appropriate for the moment, putting downward pressure on inflation at a time when price pressures remain elevated, Philadelphia Federal Reserve Bank President Anna Paulson said on Tuesday, but she added it was "healthy" that investors had begun considering scenarios where rates might need to rise.
The United Nations on Tuesday cut its forecast for global economic growth, saying the Middle East crisis had reignited inflationary pressures and heightened uncertainty. * Global GDP growth is forecast at 2.5% in 2026, compared with an estimated 3.0% in 2025, 0.2 percentage points below the January projection and well below pre-pandemic growth rates.
The Toronto Stock Exchange fell again Tuesday, following Friday's tumble ahead of the holiday weekend in Canada, but this time it was lower on a more local issue as market watchers are divided over whether to prepare for the Bank of Canada turning more dovish or hawkish on interest rates.
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* Canadian dollar falls 0.1% against the greenback. * Touches its weakest since April 15 at 1.3773. * CPI increases at an annual rate of 2.8% in April. * Bond yields trade mixed across a steeper curve. By Fergal Smith.
Bank of Japan Governor Kazuo Ueda said on Tuesday that the central bank would work closely with the government on the market situation concerning Japanese government bonds. "As for long-term interest rates, we recognise that they have been rising recently, and at a relatively fast pace," Ueda told reporters after a Group of Seven finance chiefs and central bankers' meeting in Paris.
Incoming Federal Reserve Chair Kevin Warsh on Tuesday disclosed an initial round of planned asset sales ahead of being sworn in for the job, though the disclosures did not say who the sales were made to.
Prospective Federal Reserve Chair Kevin Warsh disclosed on Tuesday his initial round of asset divestitures ahead of being sworn in as central bank leader.
Having had nightmares about another round of persistently high inflation, Canadian monetary policymakers can now rest easier after Tuesday's consumer price index for April, said Desjardins. Tuesday's CPI data suggest that underlying price pressures remain extremely muted, noted the bank.
The Federal Reserve will respond as needed with its monetary policy operations to any changes in how the Treasury Department manages a large account of cash currently parked at the central bank, Roberto Perli, the Federal Reserve Bank of New York official responsible for implementing monetary policy, said Tuesday.
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Canadian consumer prices rose 0.4% month over month non-seasonally adjusted in April, or 0.3% in seasonally adjusted terms, lifting the headline inflation rate to 2.8% year over year from 2.4% the prior month, said Bank of Montreal. The bump was driven by an 8.9% jump in gasoline prices, which the bank saw coming a mile away.
A Federal Reserve Bank of New York official responsible for implementing monetary policy said on Tuesday that the central bank's current rate control toolkit would still work in a system allowing banks to hold fewer reserves. New York Fed System Open Market Account Manager Roberto Perli also said the pace of future Treasury bill buying will be determined by market conditions.
Canadian inflation accelerated sharply in April, though less than expected, driven primarily by higher gasoline prices and fading favorable energy base effects, said RBC after Tuesday's consumer price index. Headline CPI rose 0.3% month-over-month seasonally adjusted in April, lifting the annual rate to 2.8% from 2.4% in March, below market expectations, according to the bank.
Brazil's central bank governor Gabriel Galipolo said on Tuesday that the country's heavy reliance on sovereign debt linked to the benchmark interest rate Selic weakens monetary policy transmission, as higher borrowing costs end up boosting disposable income for bondholders.
The headline consumer price index accelerated in April as gasoline prices surged, but the jump wasn't as high as expected and core measures of inflation remained muted, supporting the current wait-and-see stance of the Bank of Canada, said CIBC. Earlier Tuesday, Canada released April's CPI.
Headline prices rose just 0.4%, well below the 0.7% consensus forecast. After declining 0.1% in March, prices excluding food and energy were unchanged in April. The breadth of Canadian outsized price increases narrowed in April, with the share of consumer price index components rising faster than 3% year over year falling to 38% from 41%, said Desjardis after Tuesday's CPI.
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Brazil's central bank governor Gabriel Galipolo said on Tuesday the economy is set to face two supply shocks - higher oil prices and the risk of a very strong El Nino - at a time of elevated inflation. Speaking at a Senate hearing, Galipolo said the average of core inflation measures is currently running at the same level as headline inflation, both above the official 3% target.
Chile's central bank warned that an abrupt tightening of global financing conditions - potentially triggered by an escalation of the Middle East conflict - represents the main risk to local financial stability.
Brazil's central bank will not provide forward guidance on monetary policy decisions amid uncertainty stemming from the Middle East conflict, monetary policy director Nilton David said on Tuesday.
As expected, higher oil prices lifted Canadian inflation in April, but TD Economics isn't yet seeing much of a knock-on effect to non-energy-related goods or services, noting core inflation pressures were actually softer than expected in April. There is little argument yet for Bank of Canada rate hikes here, and market pricing for rate hikes this year has come down a bit early Tuesday, TD noted.
Canadian headline consumer price index accelerated in April as gasoline prices surged, but the jump wasn't as high as expected and core measures of inflation remained muted, supporting the current wait-and-see stance of the Bank of Canada, said CIBC. The 0.4% month-over-month non-seasonally adjusted increase was three ticks below the consensus forecast, noted the bank after Tuesday's data.
The Canadian consumer price index increased 2.8% year over year in April on rising energy prices, up from an increase of 2.4% in March, said the country's statistical agency on Tuesday. But April's CPI was lower than a 3.1% year over year consensus figure provided by MUFG.
Brazil's central bank monetary policy director Nilton David said on Tuesday the bank is troubled by inflation expectations drifting further from its 3% target - particularly for 2028, a horizon expected to be less sensitive to current shocks.
Canadian housing starts climbed by 16.5% month over month in April to a four-month high of 279,300 annualized units and beat expectations of a 245,000 print following an upwardly revised 239,700 reading in March from 235,900 initially, said Rosenberg Research.
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The U.S. Federal Reserve will avoid cutting interest rates this year, according to most economists polled by Reuters who largely pushed long-held calls for reductions into next year on hopes the current inflation flare-up is temporary.
The Canadian consumer price index for April is released at 8:30 a.m. ET on Tuesday, said Scotiabank. The bank has estimated a 1% month-over-month non-seasonally adjusted rise, with consensus at 0.7% and with a range from 0.6-1.0%, but the consensus is somewhat "thin." There is a reasonable range from 0.5-1.0%, it added.
Canada's consumer price index on Tuesday is a potential "marker mover" for Canadian government bonds and USD/CAD, said Societe Generale. Canada is slated to release CPI for April at 8:30 a.m. ET on Tuesday. The pair stalled at the 50dma, the 200dma above is situated at 1.3812 if risk sentiment "sours," writes the bank in a note to clients.
* Investors focus on potential increases to U.S. interest rates. * Oil prices fall after Trump remarks lift peace hopes. * Yen returns to intervention zone close to 160. By Stefano Rebaudo.
Canada will publish the consumer price index for April at 8:30 a.m. ET on Tuesday, said Bank of Montreal. Energy prices continued to climb in April, building on the prior month's surge, amid ongoing transportation disruptions due to the war in Iran, noted the bank.
Euro zone bonds weakened on Tuesday, with yields just shy of multi-year highs hit the previous day when investors braced for a sustained period of high energy prices that could spill over into broader inflation and cause central bank rate hikes.
Incoming Federal Reserve Chair Kevin Warsh's suggestion that independence may not extend fully to the Fed's crisis-fighting role abroad has unsettled central banking peers, who fear any reduction in its global footprint could risk market stability.
Tuesday's release of Canada's April consumer price index at 8:30 a.m. ET should show a sharp rise in headline inflation, driven by food and gasoline prices, said ING. The consensus is looking for a 3.1% year-over-year print, while core measures should remain anchored around 2.2%-2.3% year over year, noted the bank.
U.S. Trade Representative Jamieson Greer will host a meeting of G20 trade ministers in Wisconsin from September 30 to October 1, his office said, with talks to focus on forced labor, updating the Most-Favored Nation principle and global overcapacity. President Donald Trump is scheduled to host the G20 leaders' summit in Miami on December 14-15 at Trump National Doral.
It looks like the bond market is betting a Federal Reserve rate increase could be on the way -- but Fed members and economists mostly don't seem to think so.
* Trump says "good chance" of nuclear deal with Iran. * Traders see 38% chance of a US interest rate hike this year. * Minutes of Fed's April policy meeting due on Wednesday. By Noel John. Gold prices fell on Tuesday, hovering near a one-and-a-half-month low hit in the previous session, pressured by inflation fears and expectations of higher U.S. interest rates.
* Investors focus on chances of Fed rate hikes. * Oil drops after Trump remarks lift peace hopes. * Yen returns to intervention zone close to 160. By Stefano Rebaudo. The U.S. dollar rose on Tuesday as investors balanced cautious hopes for a Middle East peace deal against concerns that the Federal Reserve could raise rates to curb energy-driven inflation.
Incoming Federal Reserve chair Kevin Warsh faces both a tough environment and a "difficult boss," Standard Chartered CEO Bill Winters said on Tuesday, pointing to political pressure on Warsh to cut rates even as inflation remains high.
Incoming Federal Reserve chair Kevin Warsh faces both a tough environment and a "difficult boss," Standard Chartered CEO Bill Winters said on Tuesday, pointing to political pressure on Warsh to cut rates even as inflation remains high.
Financial market turbulence could force the Bank of Japan to go slow on the unwinding of its massive debt holdings, giving anxious bond investors some relief as surging yields lay bare worsening fiscal strains and inflation pressures.
Euro zone bonds steadied on Tuesday, with yields just shy of multi-year highs hit the previous day when investors braced for a sustained period of high energy prices that could spill over into broader inflation and cause central bank rate hikes.
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.
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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