What are investment banks expecting in US April inflation data? (It ain’t pretty)Alphabet plans first yen bond sale to fund $190 billion AI spending pushRecap – Japan and US reaffirm currency cooperation after Bessent’s Tokyo talksAustralian business confidence remains deeply pessimistic, -24 in April (prior -29)PBOC sets USD/ CNY central rate at 6.8426 (vs. estimate at 6.7945)Katayama says two-hour Bessent talks covered forex, critical minerals and AITrump weighs return to combat as Iran nuclear talks falter, CNN reportsTrump delays beef tariff cut after rancher and Republican pushbackBessent heads to Tokyo pressing Japan on yen weakness and interventionBOJ ‘Summary” – Japan rate hike back on table as BOJ signals next move still likely upwardJapan March household spending fell 2.9% y/y (expected -1.5%, prior -1.8%)New Fed Chair Warsh could be locked in as soon as TuesdayUK consumer spending falls for first time since 2024 as Iran war bitesGoldman Sachs pushes Fed rate cut forecast to December 2026ICYMI – JPMorgan warns of $150 oil and 4% inflation as energy crisis deepensS&P 500 could hit 8,000 HSBC strategists sayThe latest Trump pump: US to loan 53.3 million barrels from Strategic Petroleum ReserveinvestingLive Americas FX news wrap 11 May: Markets stall as Iran tensions simmerUAE carried out covert strikes on Iran as Gulf war escalated, WSJ report says
At a glance:
Oil and the USD held firm as US-Iran pessimism deepened; Trump said the ceasefire is “on life support” on Monday, with CNN reporting he is now more seriously considering a return to major combat operations, frustrated by the Hormuz closure and stalled nuclear talksThe Bank of Japan held rates at its April meeting but its Summary of Opinions, published Tuesday, warned that upside inflation risks are rising, with several members flagging possible hikes as soon as the next meetingAustralian business confidence edged up to -24 in April from -29 in March but remained deeply negative, with conditions falling to their lowest since 2020 as energy costs squeezed margins, NAB data showedJapan and the US reaffirmed close coordination on currency markets, including intervention, after Finance Minister Katayama met Treasury Secretary Bessent in Tokyo; Bessent is expected to meet Prime Minister Takaichi before his visit concludes WednesdayJapan’s Nikkei remained supported but South Korea’s KOSPI pulled back sharply after touching an all-time high just below 8,000, as investors used Middle East uncertainty as a cue to book profits
Oil and the US dollar held firm on Tuesday as sentiment over the US-Iran conflict darkened further. Trump described the ceasefire as on life support on Monday, and CNN reported that he is now more seriously weighing a return to major combat operations, frustrated by the continued closure of the Strait of Hormuz and the lack of meaningful progress in nuclear negotiations. His national security team met at the White House on Monday to review options, though a major decision is not expected before the president’s departure for China.
The Bank of Japan kept its policy rate unchanged at its April meeting, but the Summary of Opinions published on Tuesday struck a notably hawkish tone, with board members warning that upside inflation risks are growing as crude oil prices surge. Several members flagged the possibility of a rate hike as soon as the next meeting.
In Australia, business confidence remained deeply depressed in April despite a marginal recovery to -24 from -29 in March, which had represented the second-largest monthly drop in the survey’s history. Business conditions fell to their second-lowest reading since 2020, with capital expenditure recording its steepest post-COVID decline as energy costs bit hard into margins.
In Tokyo, Finance Minister Katayama confirmed that Japan and the US reaffirmed close coordination on currency markets, including on intervention, following her meeting with Bessent. Both sides said Japan’s recent yen-buying activity is consistent with a joint statement signed last September. Bessent is expected to meet Prime Minister Takaichi before leaving for Seoul on Wednesday. Equity markets were mixed, with Japan’s Nikkei holding up while South Korea’s KOSPI retreated sharply after briefly touching an all-time high just below 8,000, as investors took the heightening Middle East uncertainty as a cue to lock in gains, and a South Korean official suggested citizens should receive an “AI dividend” funded by taxes on AI-related profits.
Coming up:
The US April CPI report is due at 1230 GMT / 0830 Eastern, and will be closely watched given the inflation pressures building across major economies. Via the Wall Street Journal , what’s expected:
At 1130 Eastern the Senate is expected to vote to confirm Kevin Warsh as a Federal Reserve governor for a 14-year term, setting up a second vote on his nomination as Fed chair likely on Wednesday.
Australia is expected to report a narrower than forecast budget deficit this evening, banking commodity-driven revenue windfalls, alongside the most significant property tax reforms the country has seen in decades.
Later this week, Trump arrives in Beijing on Wednesday.
On Thursday, he participates in a greeting with President Xi Jinping at 10:00am local time,
followed by a bilateral meeting at 10:15am and a State Banquet at 6:00pm.
Friday’s schedule includes a Friendship Photo at 11:30am,
a Bilateral Tea at 11:40am and a working lunch at 12:15pm.
This article was written by Eamonn Sheridan at investinglive.com.