* Middle East tensions drive oil prices higher, fueling inflation concerns. * US economic data beats forecasts, with strong private payrolls and factory orders. * Fed's Williams sees no need to change rates despite inflation risks. By Chuck Mikolajczak.
Industrial production in Brazil exceeded market expectations in April, data from statistics agency IBGE showed on Wednesday, expanding for a fourth consecutive month despite tight monetary conditions. * Output rose 0.7% in April from March, while economists in a Reuters poll had expected a 0.4% increase. * Production expanded in two of the four main categories surveyed, IBGE said.
New York Federal Reserve President John Williams said on Wednesday he does not expect upside risks to inflation caused by the war in the Middle East to be long-lasting and reiterated there was no need at this time to change U.S. monetary policy.
Federal Reserve Bank of New York President John Williams reiterated on Wednesday that he does not believe the U.S. central bank needs to change the setting of short-term interest rates despite upside inflation risks tied to the Middle East war and other forces. "Monetary policy, I think, is exactly in the right place," Williams said in an interview on Yahoo Finance.
U.S. services sector activity picked up in May as businesses preemptively placed orders and rebuilt?inventories in anticipation of shortages and higher prices because of the war with Iran. The Institute for Supply Management said on Wednesday its nonmanufacturing purchasing managers index increased to 54.5 last month from 53.6 in April.
* Services PMI increases 0.9 percentage point to 54.5 in May. * New services orders jump as businesses replenish inventories. * Measure of prices paid for inputs increases to highest level since August 2022. By Lucia Mutikani.
Canada's services economy expanded at a modest pace in May as the Middle East conflict raised economic uncertainty and higher fuel prices contributed to the fastest increase in operating costs in four years, S&P ?Global's Canada services PMI data showed on Wednesday.
* US strikes near Hormuz. * US private payrolls increase in May, ADP says. * US NFP report due on Friday. By Ashitha Shivaprasad. Gold prices dipped on Wednesday, weighed down by expectations that war-driven inflation will keep interest rates elevated, while investors focused on developments in the Middle East and upcoming economic data.
U.S. private payrolls increased broadly in May, but economists cautioned against viewing the rise as a sign of a strengthening labor market, noting that other indicators continued to point to stabilizing conditions. Private employment rose by 122,000 jobs last month after a downwardly revised 105,000 gain in April, the ADP national employment report showed on Wednesday.
U.S. private payrolls increased more than expected in May, the ADP's national employment report showed on Wednesday. The ADP report is jointly developed with the Stanford Digital Economy Lab, and was published ahead of the Bureau of Labor Statistics' more comprehensive and closely watched employment report for May on Friday.
Industrial production in Brazil rose 0.7% in April from March, government statistics agency IBGE said on Wednesday, marking the fourth consecutive monthly gain and beating the median estimate of a 0.4% rise in a Reuters poll. Output was up 2.7% year-on-year in April, IBGE added.
Euro zone government bond yields rose on Wednesday, with traders now pricing in a more than 50% probability of three European Central Bank rate hikes by year-end as U.S.-Iran peace talks stalled.
The U.S. dollar is expected to stay range-bound in the near term before weakening later this year, FX strategists said in a Reuters survey, on optimism the Middle East war will end soon and its impact on inflation will be temporary. Since the conflict began three months ago, the dollar has tracked risk sentiment - rising on escalation and slipping as tensions eased.
* UK services PMI falls to 49.3 in May from April's 52.7. * Drop is less than reported in initial flash data. * Firms raise prices at second-fastest rate since 2022. * BoE policymaker concerned at broad swathe of price increases. By Suban Abdulla and David Milliken.
The artificial-intelligence boom already has fueled a record stock-market surge. Meta Platforms, Oracle and other technology companies have raised $250 billion in debt markets globally this year, according to Morgan Stanley, borrowing at a scale that would have been hard to imagine only a few years ago.
The European Central Bank met commercial lenders last week to discuss the potential threat from the newest artificial intelligence models and will follow up with demands for practical defence measures, board member Frank Elderson said.
With the Iran war stretching into its fourth month, U.S. retail companies that have so far banked on a resilient consumer could face a tougher road ahead as rising gas prices and economic pain gradually erode the buffer.
Global economic growth may temporarily slow, Swiss National Bank Chairman Martin Schlegel said on Wednesday, citing increased uncertainty. Here are other details of what Schlegel mentioned at an event for the Swiss hospitality industry in Bern, according to the presentation slides.
Ghana's president and finance minister said on Wednesday that African debt was "mispriced" and there needed to be faster and fairer restructuring tools, adding that their country was targeting an investment-grade credit rating within three years. President John Dramani Mahama and Finance Minister Cassiel Ato Forson made the comments at an investor conference in London.
* Japan more exposed to spillover effects of inflation. * BOJ will keep raising rates at 'appropriate pace', Ueda says. * Ueda signals rate-hike chance even if Iran uncertainty remains. * Delaying rate hike may inflict huge burden on economy. * Speech heightens chance of June rate hike, analysts say. By Leika Kihara.
* Sberbank raises 2026 commodity exports revenue forecast. * Sberbank forecasts 2026 GDP growth at between 0.5% and 1% * Sberbank expects central bank to accelerate rate cuts. By Gleb Bryanski and Elena Fabrichnaya.
* Euro zone composite PMI at 18-month low of 48.5 in May. * Price pressures worst in over three years. * Services reading edged up but remained in contractionary territory. * Data point to 0.2% quarterly GDP decline in second quarter - S&P Global.
* Global growth seen at 2.8% in 2026, 3.1% in 2027. * U.S. growth seen easing to 2.0% in 2026, 1.8% in 2027. * Global outlook weakens if war persists into 2027. By Leigh Thomas.
India's dominant services sector grew at its fastest pace in six months in May on a pick-up in domestic demand, even though global orders stayed below last year's average and business confidence slipped for a second straight month, a survey showed.
A peace deal between the US and Iran before next week's European Central Bank meeting would not derail the case for raising interest rates, Belgian central bank chief Pierre Wunsch told the Financial Times in an interview published on Wednesday. "If a peace deal is confirmed just before the meeting, it will be part of the discussion.
China's services activity expanded at the fastest pace in three months in May, helped by stronger growth in new business and a rebound in overseas demand, though rising cost pressures weighed on firms, a private-sector survey showed on Wednesday.
* New business and export demand drive fastest services growth in three months. * Service providers add jobs as outstanding business rises. * Input cost inflation hits highest since October 2024.
Japanese government bond yields rose across the curve on Wednesday, supported by firmer Bank of Japan rate-hike expectations and a global backdrop of elevated yields. Here are a few details: * The benchmark 10-year JGB yield climbed 2 basis points to 2.585%. Yields move inversely to bond prices.
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.
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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