Economic activity in the euro zone shrank at its sharpest rate in more than two-and-a-half years in May, as a war-driven surge in living costs hammered demand for services and pushed overall input price inflation to its highest in three-and-a-half years, a survey showed on Thursday.
By Helen Jewell. The Middle East conflict has pushed oil above $100 a barrel, stoked inflation, dented growth and forced central banks back toward tightening. This unprecedented spending push could represent a long-term source of earnings support, especially for companies in the U.S. and Asia that provide much-needed memory and power. AI is also highly energy intensive. VALUATIONS IN PERSPECTIVE.
* Traders see 39% chance of a 25-bp U.S. rate hike in December. * Fed minutes show more policymakers open to a rate hike. * Trump says negotiations with Iran in final stages. By Noel John. Gold edged lower on Thursday as higher Treasury yields and a firm dollar weighed on the metal, while hopes of a resolution to the U.S.-Iran conflict limited losses.
By Mike Dolan. For most households, the cost of money is part of the cost of living. For a variety of reasons, U.S. President Donald Trump has repeatedly demanded lower interest rates throughout his first and now second terms in office.
India's private sector growth eased in May as a manufacturing slowdown driven by the Middle East war and cooling international demand offset a marginal pick-up in the service economy, a survey showed.
* JAMIE DIMON SAYS INTEREST RATES COULD BE MUCH HIGHER FROM HERE - BLOOMBERG NEWS Source text: [ID:https://tinyurl.com/5dvfxsbp] Further company coverage:
* BOJ should raise rates at 'appropriate pace', Koeda says. * Koeda calls for attention to cost of negative real rates. * Koeda sees risk oil costs may stay high for prolonged period. * Inflation risks bigger than risk of Japan suffering recession. * Remarks suggest further hawkish shift in nine-member board. By Leika Kihara.
By Kevin Buckland. The U.S. dollar hovered below a six-week peak on Thursday after pulling back on rising hopes that Washington is nearing a deal with Tehran to end the war in the Middle East. The Australian dollar declined following a surprise rise in the unemployment rate to the highest since 2021, which lessened the case for higher interest rates.
Bank of Japan board member Junko Koeda said on Thursday the central bank should raise interest rates at an "appropriate pace" as underlying inflation may exceed its 2% target due to the prolonged conflict in the Middle East.
Australian employment unexpectedly fell in April while the jobless rate jumped to the highest level since late 2021, a possible sign the labour market might be loosening enough to stave off a near-term interest rate hike.
Japan's manufacturing activity slowed slightly in May, while service sector growth ground to a halt for the first time in over a year, as surging costs linked to the Middle East conflict weighed on confidence, a business survey showed on Thursday. -- The S&P Global flash Japan Manufacturing Purchasing Managers' Index fell to 54.5 in May, from 55.1 in April.
* Treasury yields fall while US stocks end up. * Oil prices drop sharply. * Nvidia (NVDA) shares down slightly after the bell following results. By Caroline Valetkevitch and Alun John.
Moody's Ratings on Wednesday downgraded Mexico's credit rating to "Baa3" from a prior level of "Baa2", and changed its outlook to stable from negative.
The U.S. Federal Reserve proposed Wednesday adopting a new, more limited form of a payment account that would allow firms like fintechs to move money across the Fed's payment rails without enjoying all the backstops available to traditional banks.
* Treasury yields retraced Tuesday gains after Trump says Iran deal near. * Treasuries have sold off as Iran war, high energy levels persist. * 20-year bond auction meets with somewhat soft demand. By Matt Tracy. May 20 - Yields on U.S. Treasuries on Wednesday retraced their previous day's gains, after President Donald Trump said deal talks with Iran were in their final stage.
* Treasury yields fall while US stocks up. * Investors await Nvidia (NVDA) results after bell. * Oil prices drop sharply. By Caroline Valetkevitch and Alun John. U.S. Treasury yields and oil prices fell on Wednesday as hopes increased that the U.S. is nearing a deal with Iran to end the war in the Middle East, while major stock indexes rose ahead of closely watched results from Nvidia.
* Dollar falls as Iran deal hopes rise, Treasury yields drop. * Fed minutes show growing support for possible rate hike. * Yen in focus as it nears intervention zone. By Karen Brettell. The U.S. dollar retreated from a six-week high on Wednesday on rising hopes that the U.S. is nearing a deal with Iran to end the war in the Middle East.
Federal Reserve officials' concerns about inflation being stoked by the Iran war intensified last month, with a growing number open to a possible rate hike, in a sign that incoming Chair Kevin Warsh will inherit an increasingly hawkish crew of central bankers.
Citigroup Inc (C): * CITIGROUP SHAREHOLDERS MEETING BEGINS. * CITIGROUP CEO JANE FRASER SAYS U.S. CONSUMER CREDIT SHOWS BROAD RESILIENCY. * CITIGROUP CEO FRASER SAYS ASIAN ECONOMIES SHOWS THE HIGHER VULNERABILITIES TO HIGH FUEL PRICES. * CITIGROUP CEO FRASER SAYS MIDDLE EAST DYNAMICS STILL PRESENT SIGNIFICANT DOWNSIDE RISK TO GLOBAL ECONOMY.
* Fed policymakers see rising inflation risks, with rate hike possible. * April meeting saw four dissents, most since 1992, over policy direction. * Economists expectations shift toward no rate cuts. * Financial markets price in rate hike as Fed's next move. By Dan Burns.
* Treasury yields fall while Nasdaq up more than 1% * Nvidia (NVDA) results after bell; Samsung workers set to strike. * Oil prices drop sharply. By Caroline Valetkevitch and Alun John.
UK shares closed higher on Wednesday after a softer-than-expected April inflation reading tempered some interest-rate-hike bets, while a drop in crude oil prices and stabilizing government bond yields also offered some respite.
* US Treasury yield increase supports dollar as Fed rate hike odds rise. * Trump signals rate cuts unlikely until Iran conflict ends. * Yen nears intervention zone. By Karen Brettell. The U.S. dollar retreated from a six-week high on Wednesday on rising hopes that the U.S. is nearing a deal with Iran to end the war in the Middle East.
* Trump again says the war with Iran would end "very quickly" * Investors see 48.6% chance the Fed could raise rates in December. * Minutes from the Fed's April FOMC meeting due later today. By Anjana Anil.
Yields on U.S. Treasuries moved lower on Wednesday following a selloff in the previous session, as uncertainty persisted around the war with Iran and the path of inflation.
* Trump again says the war with Iran would end "very quickly" * Investors see 48.6% chance the Fed could raise rates in December. * Minutes from the Fed's April FOMC meeting due later today. By Anjana Anil.
The S&P 500 and the Nasdaq opened higher on Wednesday, lifted by a rebound in chip stocks ahead of Nvidia's (NVDA) quarterly earnings, which investors view as a crucial test of AI demand as they weighed concerns over elevated Treasury yields.
The S&P 500 and the Nasdaq opened higher on Wednesday, lifted by a rebound in chip stocks ahead of Nvidia's (NVDA) quarterly earnings, which investors view as a crucial test of AI demand as they weighed concerns over elevated Treasury yields.
South Africa's rand, stocks and government bonds firmed on Wednesday after data showed April inflation accelerated sharply, raising expectations that the central bank could hike interest rates at its monetary policy meeting next week. * At 1300 GMT, the rand traded at 16.5950 against the dollar, up about 0.7% from its previous close.
* Treasury yields steady near highs hit overnight. * Nvidia (NVDA) results after bell; Samsung workers set to strike. * Oil prices still elevated; yen hovers around 159 per dollar. * Softer British inflation sends gilt yields lower. By Alun John and Stella Qiu.
* Investors pricing in higher rates in the face of rising inflation. * No end in sight for more than two-month-long Iran war. * US 30-year Treasury yield at 17-year high. * Yen back near 160 per dollar; traders wary of intervention. By Ankur Banerjee and Harry Robertson.
* US Vice President Vance says lots of progress made in US-Iran talks. * Minutes from Fed's April policy meeting due at 1800 GMT. * Traders see 40% chance of US rate hike in December. By Noel John. Spot gold prices ticked up on Wednesday as U.S. Treasury yields slipped with hopes of a potential resolution to the U.S.-Iran conflict easing some inflation concerns.
* Futures up: Dow 0.2%, S&P 500 0.4%, Nasdaq 0.7% * Target (TGT) up after lifting forecast. * Nvidia (NVDA) to report earnings after markets close. By Ragini Mathur and Utkarsh Hathi. U.S. stock index futures edged higher on Wednesday as chip stocks steadied ahead of Nvidia's (NVDA) earnings report, which investors view as a crucial test of AI demand amid concerns about elevated Treasury yields.
The rate on the most popular U.S. home loan rose last week to its highest in seven weeks, as concerns about inflation from higher oil prices and an uncertain outlook for the Iran war pushed benchmark U.S. Treasury yields higher. The average 30-year fixed-rate mortgage jumped 10 basis points to 6.56% for the week ended May 15, the Mortgage Bankers Association said on Wednesday.
The rate on the most popular U.S. home loan rose last week to its highest in seven weeks, as concerns about inflation from higher oil prices and an uncertain outlook for the Iran war pushed benchmark U.S. Treasury yields higher. The average 30-year fixed-rate mortgage jumped 10 basis points to 6.56% for the week ended May 15, the Mortgage Bankers Association said on Wednesday.
Fixes dateline to May 20. * Two new EX30 battery fires prompt Thai watchdog to weigh civil action. * Volvo faces complaints as customers await battery fixes after global recall. * Repair timelines vary, with some markets waiting until late-2026 for replacements. By Chayut Setboonsarng and Marie Mannes.
Federal Reserve officials' concerns about inflation being stoked by the Iran war intensified last month, with a growing number open to the possibility that they may need to raise interest rates, in a sign that incoming Chair Kevin Warsh will inherit an increasingly hawkish crew of central bankers.
* Futures up: Dow 0.1%, S&P 500 0.3%, Nasdaq 0.6% U.S. stock index futures edged higher on Wednesday as chip stocks steadied ahead of Nvidia's (NVDA) earnings, which investors view as a crucial test of AI demand amid concerns about elevated Treasury yields.
Corporate America is tapping the convertible bond market at a record pace as companies linked to artificial intelligence drive a surge in demand for debt that often draws extra investor interest in hot markets because it can convert into equity.
Avista Corp (AVA): * Avista Corp (AVA) - ON MAY 14, ISSUED $90 MILLION OF 4.77% BONDS DUE 2029 AND $70 MILLION OF 6.10% BONDS DUE 2056 - SEC FILING. * Avista Corp (AVA) - EXPECTS TO ISSUE ADDITIONAL $70 MILLION OF 6.10% BONDS IN AUGUST 2026 - SEC FILING Source text: Further company coverage:
* AI-linked firms drive surge in convertible bond issuance. * High rates, equity volatility boost appeal of convertibles. * Hedge funds, asset managers seek upside, even from riskier issuers. By Chibuike Oguh.
* Fed policymakers split over inflation risks and future rate cuts. * April meeting saw four dissents, most since 1992, over policy direction. * Market and economist expectations shift toward no rate cuts, some see possible hikes. By Dan Burns.
* US Vice President Vance says lots of progress made in US-Iran talks. * Minutes from Fed's April policy meeting due at 1800 GMT. * US 10-year Treasury yields at an over one-year high. * Traders see 40% chance of US rate hike in December. By Noel John.
* Treasury yields steady near new highs hit overnight. * Nvidia (NVDA) results after bell; Samsung workers set to strike. * Oil prices still elevated; yen hovers around 159 per dollar. * Softer British inflation sends gilt yields lower. By Alun John and Stella Qiu.
* Investors pricing in higher rates in the face of rising inflation. * No end in sight for more than two-month-long Iran war. * US 30-year Treasury yield at 17-year high. * Yen back near 160 per dollar; traders wary of intervention. By Ankur Banerjee and Harry Robertson.
* U.S. Vice President Vance says progress made in talks with Iran. * Benchmark 10-year Treasury yields near a more-than-one-year high. * Minutes from Fed's April policy meeting due at 1800 GMT. * U.S. Fed to avoid cutting rates this year - Reuters poll. By Pablo Sinha.
Emmanuel Moulin, President Emmanuel Macron's pick to head the Bank of France and his former chief of staff, said on Wednesday in hearings ahead of a vote by Parliament on Moulin's confirmation that he was sure he would run the national central bank in an independent manner.
Although some are puzzled by the coincidence of an artificial intelligence boom and rising borrowing costs, they are closely linked.Beyond the immediate heat of the AI investment frenzy, a long-term productivity surge is lifting estimates of neutral interest rates even as workers' share of the GDP pie declines. The idea remains controversial in some circles.
* Treasury yields hit new highs overnight, steady in Asia. * Japan's Nikkei falls 1.5%, Wall St futures a tad lower. * Oil prices still elevated, yen hovers around 159 per dollar. By Stella Qiu.
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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