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.
The near-vertical AI-driven rally that pushed Wall Street to record highs ? one of the fastest and most powerful snapback advances in modern market history ? finally collided with a new reality this week: inflation is reaccelerating, and the bond market is beginning to price in the risk of another Federal Reserve rate hike.
RBC Capital Markets said Tuesday's April CPI report will be the highlight for next week, with the headline print likely to accelerate while broader price pressures should remain contained. In its CAD Weekly Soundbites report, RBC said it and consensus expect April CPI to rise 3.1% year-over-year, compared with 2.4% previously, as headline price pressures should escalate from higher energy costs.
US industrial production rebounded more than projected in April, buoyed the manufacturing and utilities categories, Federal Reserve data showed Friday. Industrial output rose 0.7% last month following a revised 0.3% drop in March, the Fed said.
The Federal Reserve said Friday it has terminated its enforcement actions with UBS Group (UBS), Credit Suisse and their subsidiaries. UBS declined to comment to MT Newswires. Price: 45.46, Change: -0.89, Percent Change: -1.92. MT Newswires does not provide investment advice.
The Federal Reserve said Friday it has terminated its enforcement actions with UBS Group (UBS), Credit Suisse and their subsidiaries. UBS didn't immediately reply to a request for comment from MT Newswires. Price: 45.64, Change: -0.72, Percent Change: -1.54. MT Newswires does not provide investment advice.
National Bank of Canada on Thursday reiterated its sector-perform rating on the shares of Lithium Americas (LAC) and lowered its price target to C$7.25 from C$7.50 following the company's first-quarter results.
* Inflationary pressures fuel rate hike expectations. * Rising US Treasury yields and inflation fears drive dollar strength. * Fed's Williams does not see need to change rate policy. By Chuck Mikolajczak.
National Bank of Canada on Thursday increased Northland Power's price target to C$28 from $27 with an outperform rating. The company reported an adjusted EBITDA of C$427 million in the first quarter, below the bank's forecast of $454 million but in line with the consensus forecast of $424 million.
New York manufacturing activity grew at the fastest pace in more than four years this month amid robust new orders, the Federal Reserve Bank of New York reported Friday. The Empire State Manufacturing Survey's general business conditions index climbed to 19.6 in May, the highest reading since April 2022, from 11 last month, the Fed branch said.
U.S. factory production posted its largest increase in 14 months in April, driven by motor vehicles and demand for technology goods amid an artificial intelligence spending boom, but supply disruptions from the war with Iran cast a shadow over the manufacturing sector.
XRP could be preparing for a "macro wave three" breakout if Bitcoin confirms a move above key resistance near the $94,000 region. In a May 14 podcast, trader Cryptoinsightuk tied his bullish thesis to a combination of macro catalysts, including ongoing crypto regulation efforts, improving U.S.-China relations and shifting Federal Reserve leadership expectations.
After a run of hotter-than-expected inflation data this week, investors on Friday ramped up bets that the U.S. Federal Reserve will shift into interest-rate hiking mode perhaps before the year is out, presenting a potential policy dilemma out of the starting gate for incoming central bank leader Kevin Warsh.
Interest rate futures prices fell sharply on Friday, reflecting a growing conviction among bond market investors that stiff inflation will push the U.S. Federal Reserve to raise interest rates late this year or in early 2027.
Canadian existing home sales came in line with expectations of a 0.7% month-over-month uptick in April, following a 0.1% dip in March, noted Rosenberg Research. This was the first monthly gain since last October, and took the level back to 35,600 units -- a three-month high, noted Rosenberg Research.
The total monthly seasonally adjusted annual rate of housing starts for all areas in Canada increased 17% in April to 279,317 units compared with March, said the Canada Mortgage and Housing Corporation on Friday. April's increase was better than the 245,000 consensus figure provided by MUFG.
Canadian housing starts rose more than expected in April, increasing 17% from the previous month, data from the national housing agency showed on Friday. The seasonally adjusted annualized rate of housing starts increased to 279,317 units from a revised 239,747 units in March, the Canada Mortgage and Housing Corporation said.
* Inflationary pressures fuel rate hike expectations. * Trump-Xi summit gives markets little to cheer. * Yen struggles at 158 level; turmoil weighs on sterling. By Samuel Indyk and Rae Wee. The dollar was a touch higher and heading for its biggest weekly gain in more than two months, as mounting inflationary pressures from higher energy prices fuelled bets on a Federal Reserve rate hike this year.
Canada will publish the April housing starts at 8:15 a.m. ET on Friday, said Bank of Montreal. The starts look to "tick up" to around 240,000 annualized units, according to the bank. BMO noted CMHC is looking into collecting additional data -- including building permits and more insight into the pre-construction world -- so the bank awaits more details on that front.
The US dollar rose against its major trading partners early Friday ahead of the New York Federal Reserve's Empire State manufacturing reading for May at 8:30 am ET and industrial production data for April at 9:15 am ET. The St. Louis Fed is expected to update its GDP nowcast estimate for Q1 around midday.
Incoming Federal Reserve chief Kevin Warsh's plans to shrink the U.S. central bank's "footprint" in financial markets could be constrained by rising federal debt and the potentially lost luster of U.S. Treasuries, analysts said, with rising long-term interest rates a sign of the challenge awaiting the new Fed chair.
Federal Reserve Chair Jerome Powell's immediate predecessors knew how to "go big" in a crisis, steer a committee towards an interest rate decision, and oversee changes in central bank strategy, all parts of the job that the lawyer and former private equity investor also had to learn.
Societe Generale in its early Friday economic news summary pointed out: -- Risk off as United States Treasury yields accelerate, OIS pricing 80% chance of Federal Reserve rate hike by December. -- Federal Reserve's Williams: no need to raise or cut rates now, policy in a good place. -- Day ahead: U.S. industrial production.
The U.S. dollar is headed for its strongest weekly performance in more than two months on Friday as Treasury yields climbed and traders scaled back expectations for Federal Reserve rate cuts. The U.S. Dollar Index rose to 99.15 at 4:12 a.m. ET, gaining about 1.3% for the week. UUP is among the biggest beneficiaries of the rising dollar.
Japanese government bond yields climbed across the curve on Friday, with several tenors reaching record highs on rising bets for Bank of Japan interest rate hikes amid building inflationary pressures. The benchmark 10-year JGB yield rose as much as 10 basis points to 2.73%, the highest level since May 1997.
The carry trade, where investors buy high-yielding major currencies and sell low-yielding ones, is having its best run in years, even with major risk-driven moves in global markets. This reflects a combination of low currency volatility, large gaps between interest rates in developed economies and the yen not getting a safe-haven lift from the Iran war.
The Bank of Japan will raise its key interest rate to 1.0% in June, nearly two-thirds of economists said in a Reuters poll, as it presses ahead with efforts to normalise monetary policy amid rising inflation concerns from the war in Iran.
Japan may face another round of broad-based price increases around summer, as firms ranging from food makers to hot spring facilities consider passing on soaring energy costs from the Middle East conflict, the central bank said on Friday.
Japan's economy is expected to have grown for a second quarter in January-March, supported by recovering exports and solid domestic demand, although the full impact of the Iran war had yet to be felt, a Reuters poll showed on Friday.
Global equity indexes fell on Friday while bond yields soared as investor euphoria over tech stocks gave way to inflation fears and traders increased their bets that the Federal Reserve will hike interest rates this year. U.S. President Donald Trump left China on Friday with no major breakthroughs on trade or tangible help from Beijing to end the Iran war.
* Dollar up more than 1% this week, sharpest increase since early March. * Trump-Xi summit enters second day as investors await more details. * Yen struggles at 158 level; sterling weighed down by UK political turmoil. By Rae Wee.
* Fed's Barr says misguided to ease bank liquidity rules to lower Fed holdings. * Barr says efforts to cut Fed balance sheet via rule changes could increase risk. * Barr says current Fed policy system has worked well. By Michael S. Derby.
Federal Reserve Governor Michael Barr said Thursday that lowering banks' liquidity rules to reduce the size of the central bank's balance sheet is a bad idea and could undermine the safety of the financial system.
* April annual wholesale inflation hits 3-year high of 4.9% * Yen-based import price index spikes 17.5% yr/yr in April. * Rises driven by petroleum, chemical, metals goods prices. * Markets price in strong chance of BOJ rate hike in June. * Inflation, fiscal concerns lift 10-year yield to 29-year high. By Leika Kihara.
Peru's central bank held its benchmark interest rate for the eighth straight time on Thursday, keeping it at 4.25% in line with analysts' expectations after inflation in April remained outside the bank's target range.
Federal Reserve Governor Michael Barr said Thursday that lowering liquidity rules to get the central bank's balance sheet smaller is a bad idea and could undermine the safety of the financial system.
* Fed's Barr says misguided to ease bank liquidity rules to lower Fed holdings. * Barr says efforts to cut Fed balance sheet via rule changes could increase risk. * Barr says current Fed policy system has worked well. By Michael S. Derby.
Federal Reserve Bank of New York President John Williams said on Thursday he does not see a need right now for the central bank to weigh any change in interest rate policy amid the uncertainty created by the Middle East war. Monetary policy is in a "good place" right now, the official said in remarks given in New York.
Coupang Inc (CPNG): * Coupang Inc (CPNG): U.S. SENATE CONFIRMED KEVIN WARSH AS FEDERAL RESERVE CHAIR AND HE RESIGNED AS A DIRECTOR OF CO EFFECTIVE IMMEDIATELY - SEC FILING. * Coupang Inc (CPNG) - BOARD TO REDUCE SIZE BY ONE DIRECTOR AFTER WARSH RESIGNATION - SEC FILING Source text: Further company coverage:
VCI Global Limited (VCIG), today announced the launch of its Strategic Gold Treasury Program, a long-term treasury framework and capital allocation initiative designed to integrate physical gold holdings and gold-linked digital reserve assets into the Company?s broader treasury and platform strategy.
Federal Reserve Governor Stephen Miran said Thursday that he will resign from the Fed before or shortly before Kevin Warsh is sworn in as a governor and Fed Chair. Miran was filling a term that expired on Jan. 31, 2026, when he said that he would remain in the position until a successor was appointed.
U.S. Federal Reserve Governor Stephen Miran on Thursday said he would resign his seat on or shortly before Kevin Warsh is sworn in as the Fed's next chair, a necessary step since there is no other open seat on the seven-member board for Warsh to fill and Miran's term had technically expired in January.
Gold moved lower midafternoon Thursday as the dollar rose after a report showed U.S. retail-sales growth slowed in April. Gold for June delivery was last seen down US$22.20 to US$4,684.50. The U.S. Census Bureau reported retail sales roes by 0.5% last month, down from a revised 1.6% in March but matching expectations according to Marketwatch.
U.S. retail sales increased solidly for a third straight month in April, though part of the rise in receipts was due to a sharp rise in inflation since the start of the U.S.-backed war with Iran. Rising price pressures were underscored by other data on Thursday showing imported inflation last month rose at its fastest pace in four years.
Federal Reserve Bank of Cleveland President Beth Hammack reiterated on Thursday that a wide range of evidence supports the idea that an independent central bank makes policy more effectively.
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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