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BNP Paribas expects the Bank of England to keep interest rates unchanged in March, whereas it had previously anticipated a rate cut.March 11 – Due to persistent inflationary pressures, two major Australian banks expect the Reserve Bank of Australia (RBA) to raise interest rates for the second consecutive week. National Australia Bank (NAB) and Westpac predicted on Wednesday that the RBA will raise rates by 25 basis points to 4.1% next week, in line with expectations from UBS and Deutsche Bank. NAB Chief Economist Sally Auld stated, “Given Australia’s relatively unfavorable inflation starting point and recent data confirming that the economy is running well above trend growth, the rationale for a rate hike in the near term is clear.” Westpac Chief Economist Luci Ellis said that the RBA’s belief that demand continues to exceed economic capacity and its willingness to address surging overall inflation to prevent a sustained rise in price expectations prompted her to change her forecast. Ellis stated, “There could be disagreements at next week’s meeting. Market participants should consider the possibility that the RBA might choose to wait until May to raise rates, but this is no longer our base case scenario.”March 11 (Kyodo News) – Japanese Economy, Trade and Industry Minister Ryosuke Akazawa stated on Wednesday during a parliamentary committee meeting, in response to questions from lawmakers, that the Japanese government has not ruled out the possibility of releasing national oil reserves "on its own initiative," rather than as part of a coordinated action. He added, "We will take all possible measures to ensure a stable energy supply." As of the end of December, Japans total oil reserves were sufficient to meet domestic consumption needs for 254 days, of which 146 days worth were held by the government, 101 days worth were held by the private sector, and the remainder were stored jointly with oil-producing countries.March 11th - This years government work report further clarified the need to "expand market access with a focus on the service sector," accelerating Beijings new round of opening up. In the first batch of pilot programs nationwide to expand opening up in areas such as value-added telecommunications and healthcare, Beijing became the first city in China to establish a foreign-invested enterprise specializing in human gene diagnosis and treatment technology. To date, more than 60 foreign-invested enterprises have participated in the pilot programs. Last year, Beijing saw over 2,400 new foreign-invested enterprises, a record high. According to the Beijing Municipal Bureau of Commerce, this year will see the release of the 3.0 plan for the comprehensive demonstration zone for expanding opening up in the service sector, the implementation of actions to enhance the opening-up level of key industrial parks, the promotion of differentiated development of comprehensive bonded zones, and proactive alignment with high-standard international trade and economic rules, injecting new momentum into a higher level of opening up.Market news: The Saudi Foreign Minister spoke with the US Secretary of State to discuss Irans regional aggression.

Stocks And Bonds Fall As Germany's Surprise Raises Inflation Concerns

Aria Thomas

May 31, 2022 11:35

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After a high inflation data in Germany heightened concerns about the pace and magnitude of upcoming interest rate hikes, stocks and bonds in Asia fluctuated and the dollar strengthened on Tuesday.


Increasing energy costs heightened concerns about the permanence of consumer suffering. Brent crude futures reached a two-month high of $122.43 a barrel after the European Union pledged to reduce its oil imports from Russia by the end of the year.


Returning from the U.S. holiday on Monday, U.S. treasuries declined, driving the yield of the 10-year bond up nearly 10 basis points (bps) to 2.8405 percent.


German consumer prices grew at their highest pace in half a century overnight, bolstering the case for an outsized European Central Bank interest rate hike in July. German bund rates increased by 8.1 basis points overnight.


Tuesday afternoon will feature Eurozone inflation figures.


Chinese Purchasing Managers' Index (PMI) figures showed another month of contraction in services and manufacturing activity, though at a reduced pace of decline.


In the stocks market, S&P 500 futures reversed early gains to trade flat at the start of the Asian session, while Nasdaq 100 futures rose 0.4%. MSCI's broadest index of Asia-Pacific equities outside Japan lost a two-day gaining streak and fell 0.2%. Japan's Nikkei dipped 0.1 percent. (T)


According to Khoon Goh, head of Asia research at ANZ Bank in Singapore, the current focus is on the U.S. economy and China.


The fact that the world's two largest economies are slowing for separate reasons is not good for the global growth trajectory.


Data released on Tuesday revealed that factory output in the world's third-largest economy, Japan, declined substantially in April as Chinese demand waned.


China's official PMI in May was 49.6, showing a decline in industrial activity, but at a slower rate than in April, when it was 47.4.


Growth fears have halted a two-week advance for exporter currencies worldwide and have stabilized the U.S. dollar as investors have resumed their flight to safety. 


Governor of the U.S. Federal Reserve Christopher Waller's hawkish comments further diminished recent hopes that the Fed would take a breather after the June and July rate hikes.


"I advocate putting 50 (basis point increases) on the table at each meeting until we observe a significant decline in inflation. I don't see why we should stop until we obtain it "Waller remarked.


Fed Funds futures plummeted, particularly those for the early months of next year, as investors braced for persistent interest rate hikes that would drive the benchmark rate to 3 percent by mid-2023.


The dollar traded on Tuesday at $1.0744 per euro, up 0.3%, and 128.16 per JPY, up around 0.4%.


The trade-sensitive Australian and New Zealand dollars declined, with the Australian dollar down 0.2% to $0.7180 and the New Zealand dollar falling 0.4% to $0.6530.


After the European Union agreed to reduce its oil imports from Russia by the end of 2022, oil prices increased.


U.S. crude futures increased to $117.70 a barrel.


The strengthening dollar pulled the spot price of gold down to $1,848 per ounce. Overnight, Bitcoin surged over 8 percent and above $32,000 for the first time in three weeks. Early in the Asian session, the price was barely below $31,540.


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