Bank of Japan Governor Kazuo Ueda will deliver a closely watched speech on Wednesday that could reveal his thinking on the prospects of a June rate hike, as surging fuel costs from the Iran war broaden price pressures in an already fragile economy.
Japan's services sector ground to a halt in May after more than a year of expansion, as surging costs linked to the Middle East war dampened service demand and led to a 12-year high in output price inflation, a private survey showed on Tuesday. * The S&P Global final Japan Services Purchasing Managers' Index fell to 50.0 in May from 51.0 in April, marking the end of a 13-month expansion streak.
Federal Reserve Chairman Kevin Warsh pledged to follow "the best of the Fed's traditions" in an opening note to the central bank's more than 20,000 employees as he starts his four-year term, while also promising a broad look at what might be done differently.
Federal Reserve Chair Kevin Warsh has tapped two conservative policy veterans, Paul Winfree and Daniel Heil, to advise him while he settles into the job, the Wall Street Journal reported on Tuesday, citing sources.
* US job openings surge to 7.618 million in April, exceeding forecasts. * Cleveland Fed's Hammack says inflation pressures may require action soon. * Oil prices choppy on report that Iran reviewing agreement. By Chuck Mikolajczak.
* US job openings surge to 7.618 million in April, exceeding forecasts. * Cleveland Fed's Hammack warns inflation pressures may require action soon. * Oil prices subdued on report Iran reviewing agreement. By Chuck Mikolajczak.
* Bank of Israel chief cites falling oil prices, stronger shekel as drivers of lower inflation. * Business leaders criticize high rates, say strong shekel harms economy. * Yaron says economy resilient post-conflict, main drag from labour supply constraints. By Steven Scheer.
Federal Reserve Bank of Cleveland President Beth Hammack warned on Tuesday that even an imminent end to the Middle East war will result in extended disruptions to the economy.
Cleveland Federal Reserve President Beth Hammack said on Tuesday the U.S. central bank may need to raise interest rates soon should already-high inflation pressures continue to mount.
* U.S. 10-year Treasury yields down more than 1% * Oil prices fall after Trump says talks with Iran are ongoing. * Lebanon announces partial ceasefire between Israel, Hezbollah. By Noel John. Gold rose 1% on Tuesday, buoyed by lower U.S. Treasury yields, while weaker oil prices eased fears of higher inflation and elevated interest rates. Spot gold rose 1% to $4,528.67 per ounce by 1136 GMT.
Israel's short-term interest rates could fall at a faster pace if inflation continues to ease, Bank of Israel Governor Amir Yaron said on Tuesday. Yaron, speaking at an Israel Democracy Institute conference, noted that since the last interest rates decision on May 25, expectations of a ceasefire deal with Iran have increased, leading to lower energy prices and a stronger shekel versus the dollar.
* Investors monitor US-Iran talks, await key US economic data. * Federal Reserve policy outlook remains central to dollar direction. * Yen drifts toward 160 per dollar, heightening intervention risk. By Stefano Rebaudo.
* U.S. 10-year Treasury yields down more than 1% * Oil prices fall after Trump says talks with Iran are ongoing. * Lebanon announces partial ceasefire between Israel, Hezbollah. By Noel John. Gold rose more than 1% on Tuesday, buoyed by lower U.S. Treasury yields, while weaker oil prices eased fears of higher inflation and elevated interest rates.
* Investors monitor US-Iran talks, await key US economic data. * Federal Reserve policy outlook remains central to dollar direction. * Yen drifts toward 160 per dollar, heightening intervention risk. By Stefano Rebaudo and Satoshi Sugiyama.
The Iran energy story may be masking a bigger inflation worry. Everyone, not least the major central banks, is watching every twitch of crude prices around the Iran conflict for the cost-of-living hit. This whopping business investment outlay is expected to exceed $800 billion this year alone and run into the trillions over the years ahead.
* Lebanon announces partial ceasefire between Israel and Hezbollah. * Tehran halts negotiations with US, Iranian state media says. * U.S. May employment data due later this week. By Pablo Sinha.
The Bank of Japan should lay out a clear path for policy normalisation after a widely expected rate hike this month to stabilise the bond market, Sumitomo Mitsui Financial Group's (SMFG) global markets chief, Arihiro Nagata, told Reuters.
* Lebanon announces partial ceasefire between Israel and Hezbollah. * Tehran halts negotiations with US, Iranian state media says. * U.S. May employment data due later this week. By Pablo Sinha.
* Surging stock markets boost U.S. luxury spending. * Luxury groups report stronger sales growth in U.S. than elsewhere. * Brands stage fashion shows in New York and Los Angeles. * North America leads the world in luxury store openings. By Elisa Anzolin and Helen Reid.
The Bank of Japan should lay out a clear path for policy normalisation after a widely expected rate hike this month to stabilise the bond market, Sumitomo Mitsui Financial Group's (SMFG) global markets chief, Arihiro Nagata, told Reuters.
Fitch Ratings said on Tuesday it planned to withdraw its ratings on Fonterra Co-operative Group, days after the dairy producer announced it would cease its engagement with the credit rating agency. On May 22, the New Zealand-based company said it would end its relationship with the external credit rating agency to reflect its continued focus on operating as a simpler business.
* Iran and US carry out strikes. * Series of US jobs data due this week. * Palladium is moving towards balance, Morgan Stanley says. By Ashitha Shivaprasad. Gold prices fell on Monday as escalating tensions in the Middle East heightened inflation concerns and reinforced expectations that central banks may keep monetary policy tighter for longer.
* Manufacturing PMI increases 1.3 points to 54.0 in May. * Supplier delivery performance slows for sixth consecutive month. * Iran war dominates comments from manufacturers, with many complaining about negative impact on supply chains. By Lucia Mutikani.
The Bank of Canada on Monday cautioned against putting too much weight on recent GDP data which showed two consecutive quarters of decline on an annualized basis. Senior deputy governor Carolyn Rogers said while two quarters of annualized contraction in GDP did meet one definition of a recession, the April advance estimate showed the economy most likely rebounded.
* Iran halts US talks, oil prices surge, market reacts to geopolitical tensions. * US Treasury yields jump, 10-year note posts biggest rise in two weeks. * Fed rate hike expectations increase as high oil prices persist, Strait of Hormuz remains closed. By Chuck Mikolajczak.
Private sector analysts
polled by Mexico's central bank slightly raised nearly all
forecasts for inflation this year and next, while trimming their
economic growth estimates, the bank said on ...
U.S. construction spending increased more than expected in April, boosted by single-family homebuilding, though rising mortgage rates amid the war with Iran continued to cast a shadow over the housing market. The Commerce Department's Census Bureau said on Monday that construction spending rose 0.4% after a downwardly revised 0.2% increase in March.
U.S. construction spending increased more than expected in April, boosted by single-family homebuilding, though rising mortgage rates amid the war with Iran continued to cast a shadow over the housing market. The Commerce Department's Census Bureau said on Monday that construction spending rose 0.4% after a downwardly revised 0.2% increase in March.
U.S. manufacturing activity increased more than expected in May, hitting the highest level in four years, likely driven by businesses front-loading orders amid rising prices and shortages because of the war with Iran.
U.S. manufacturing activity increased more than expected in May, hitting the highest level in four years, likely driven by businesses front-loading orders amid rising prices and shortages because of the war with Iran. Manufacturing has now grown for five straight months, anchored mostly by an artificial intelligence spending spree.
Canada's manufacturing sector expanded for a second straight month in May as the potential for higher prices and product shortages due to the war in the Middle East likely boosted client demand, data showed on Monday. The ?S&P Global Canada Manufacturing Purchasing Managers' Index edged down to 52.9 last month from 53.3 in April.
* Iran and US carry out strikes. * Series of US jobs data due this week. * Palladium is moving towards balance - Morgan Stanley. By Ashitha Shivaprasad. Gold prices slipped on Monday as fresh strikes between Iran and the United States heightened inflation concerns and reinforced expectations that central banks may keep monetary policy tighter for longer.
China's central bank is making a broad push to increase the use of digital yuan at home and abroad, several industry sources said, setting Beijing on a different - and potentially competing - path from the United States in shaping the future of money.
Euro area government bond yields rose on Monday as investors stayed wary of a potential U.S.-Iran deal to reopen the Strait of Hormuz, a development that could ease inflation pressures and reduce expectations for European Central Bank tightening. Borrowing costs tracked moves in oil prices - which were up 2.5% on Monday, but still below $95 - seen as a proxy for future inflation.
* Demand for European goods stagnated in May. * Britain's factories raised their prices at fastest rate since June 2022. * Private survey shows China's factory activity expanded in May. By Jonathan Cable and Leika Kihara.
Growth in euro zone manufacturing lost momentum in May as demand for goods stagnated and supply-chain disruptions linked to the Middle East war pushed input costs to their highest in four years, a survey showed on Monday.
Japan is on the verge of repeating the policy mishap that led to decades of economic stagnation as Iran war-induced inflation risks forcing the central bank to raise rates aggressively if it doesn't act on time, former Bank of Japan board member Makoto Sakurai said on Monday.
* Stagflation inevitable in Japan, ex-BOJ member Sakurai says. * Forgoing June rate hike could force rapid increases later. * Inflation may accelerate to around 3.5% from autumn, Sakurai says. By Leika Kihara.
The Bank of France will revise down its estimates for 2026 economic growth when it updates its forecasts in mid-June to reflect "the bad surprise" of the first quarter, the outgoing head of France's central bank said on Monday.
Euro area government bond yields rose on Monday as investors stayed wary of a potential U.S.-Iran deal to reopen the Strait of Hormuz, a development that could ease inflation pressures and reduce expectations for European Central Bank tightening. Borrowing costs tracked moves in oil prices, which were up 1.5% on Monday but below $95 and seen as a proxy for future inflation.
India's manufacturing sector expanded at its fastest pace in three months in May on sustained demand even as cost pressures were among the most intense in nearly four years and business optimism softened to its lowest since February, a survey showed on Monday.
* China outlines legal basis for unwinding completed foreign investment deals. * Rules designed to prevent 'Singapore-washing', overseas talent transfer in sensitive sectors. * Beijing can punish foreign firms if their home country restricts Chinese investment. By Laurie Chen.
* Private survey shows China's factory activity expanded in May. * South Korea's PMI hits fastest pace in five years. * Japanese firms saw input costs surge in sign of war impact. By Leika Kihara.
China issued sweeping new rules on Monday tightening control of overseas deals that involve Chinese investors, technology, data and national security, a month after Beijing ordered Meta to unwind its acquisition of AI startup Manus.
China issued sweeping new rules on Monday, widening regulators' powers to scrutinise overseas deals involving Chinese investors, technology, data and national security, a month after Beijing ordered the unwinding of Meta's acquisition of AI startup Manus.
The United States and Vietnam reaffirmed their commitment to avoid currency manipulation in a joint statement issued by the U.S. Treasury and Vietnam's central bank following high-level consultations, the Treasury said over the weekend.
* RatingDog manufacturing PMI 51.8 in May vs 52.2 in April. * New export orders fall after four months of growth. * Price pressures of manufacturers ease. China's manufacturing sector expanded for a sixth straight month in May, although at a slower pace, as output and new orders remained solid and price pressures eased, a private survey showed on Monday.
The U.S. dollar held steady on Monday after a weekly loss as markets awaited the results of peace talks in the Middle East and signals on the timing of central bank rate hikes. The dollar index edged lower last week on hopes for a deal between the United States and Iran to open the Strait of Hormuz shipping lane for oil.
U.S. Federal Reserve Governor Jerome Powell on Sunday warned about the impact of a politicized Fed and made a broader call for the defense of democratic institutions in his first public remarks since the end of his eight-year stint as head of the central bank.
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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