- ECB rate hikes may go on longer than expected.
- In the US, inflation moderated in April, giving the Fed room to pause rate hikes soon. The consumer price index rose by a less-than-forecast 4.9% year on year, the first reading under 5% in two years.
- Changing jobs is paying off for millions of middle-income Brits. Wages soared 10% in the past year for those taking new positions in England, Reed Recruitment data analyzed by Bloomberg showed.
- UAE’s Royal Group is shorting US stocks. The buyback binge is easing.
- Violent protests continued in Pakistan. The nation’s default risk grew.
- China asked its big four banks to cut deposit rate ceilings, Reuters said.
- Australia's trade minister will visit China today as ties thaw.
- Bank of England’s turn in spotlight
- ?China’s economic recovery is fading
- Yellen takes aim at Russian sanctions evasion at G-7 gathering.?
- One of Vanguard’s biggest credit ETFs bleeds record $5.5 billion.
- ECB has ‘marginal’ distance to cover with rate hikes, Villeroy says..
- Worried markets want to believe a debt-ceiling deal can be done.
- The latest data showed CPI slowed more than expected, giving the Fed some breathing room to potentially pause.
- But there’s a dilemma: Core and headline inflation are both more than double the Fed’s target.
- Consumer prices rose 0.4% in April with headline CPI up 4.9% on a year-on-year basis, its first reading below 5% in two years.
- Stocks took the news with a dip and then recovered to close in the green. Tech-heavy Nasdaq posted the highest close for the gauge since mid-August. BB
- Officials are starting to accept that interest-rate increases might need to continue in September to bring inflation fully under control, according to people familiar with the debate.
- Christine Lagarde has refused to be drawn on how much further rates need to rise, but did tell Japan's Nikkei newspaper that the ECB’s fight with inflation isn’t over and more action is still required.
- But other voices are more sanguine. Bundesbank boss Joachim Nagel said the hiking path may be entering “the home stretch” and Yannis Stournaras told Greece’s Imerisia it’s “close to the end,” albeit with some distance to go. BB
- Stubborn double-digit inflation is set to force the Bank of England into a 12th straight interest rate rise on Thursday even though the end of its lightning-quick hiking cycle is coming into view. Economists and investors expect the Monetary Policy Committee to back another quarter-point boost in Bank rate to 4.5%, the highest since 2008. The decision is due at 12 p.m. London time, with a press conference led by Governor Andrew Bailey following a half hour later. Red-hot price and wage data have so far raised the risks of the BOE continuing its hiking cycle through the summer. BB
- CPI yesterday in the U.S will be a pleasant surprise and relief to the Fed. At 0.4% MoM, it is still more than double where it needs to be (0.17%) for many months to reach the target 2% inflation level. With a credit squeeze also taking place after banks failed, the Fed are likely to take a wait-and-see approach over the summer. It does take time for rate increases to show up in data.?
