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There isn’t much on the data agenda to shift around financial markets too much upon release.

Trump is in China so no doubt we’ll get some headlines, ‘BIG NEWS coming!”, you know the sort of thing, Followed by a nothingburger. Perhaps the “outline of a concept of a plan” … again, you know the sort of thing.

This article was written by Eamonn Sheridan at investinglive.com.

UK PM Starmer is saying:

• Has made it clear to allies that he will stand and fight if Wes Streeting to succeed in triggering a leadership contest.

Starmer and Streeting met this morning in what was dubbed “showdown,” though Streeting spent less than 20 minutes in Downing Street. The meeting lasted just 16 minutes, and when asked about it, the PM’s spokesman declined to reveal details, stating only that “the prime minister has full confidence in the health secretary.” According to The Times, Streeting was expected to discuss the “turbulence” gripping the party and how Starmer would “get us out of this mess.”

The meeting comes after Labour descended into open division over the prime minister’s future, with four ministers resigning and at least 80 MPs urging him to quit, while more than 100 others warned against a leadership contest. Among those who resigned are prominent MP Jess Phillips, who said she was tired of seeing “opportunities for progress stalled and delayed,” and Zubir Ahmed, a Streeting ally.

On whether Streeting will trigger a leadership contest, the situation is on a knife-edge. The Times reported that Streeting plans to resign as early as Thursday to make a bid for the leadership, with an ally quoted as saying “He is going for it. He’s going tomorrow,” though there was no immediate statement from Streeting’s office.

Countering that, a Starmer ally, Europe minister Nick Thomas-Symonds, said no candidate appeared to have the backing of enough MPs to trigger a challenge, and that it did not look likely, urging colleagues to “move on.” The SNP have also said they will try to force a vote on Starmer’s future via an amendment to the King’s Speech, which would essentially function as an unofficial no-confidence vote. The next 24–48 hours look decisive.

A Labour leadership contest can only be triggered in one of two ways — either Starmer resigns voluntarily, or a challenger secures nominations from 20% of Labour MPs. With Labour holding around 405 seats, that threshold currently sits at 81 MPs. T

This article was written by Greg Michalowski at investinglive.com.

Headlines:

• USD/JPY nudges back up towards 158.00 mark as dollar holds firmer on the week
• Gold continues to consolidate amid prolonged US-Iran stalemate, hawkish Fed risk
• ECB’s Villeroy: We don’t have enough information on core inflation yet
• ECB’s Muller: The ECB will need a fast resolution on Hormuz to hold in June
• ECB’s Rehn: Monetary policy should not be based on oil prices alone
• French headline inflation surges in April as energy prices accelerate
• Germany wholesale prices push higher in April as Middle East conflict reverberates
• Eurozone Q1 GDP second estimate +0.1% vs +0.1% q/q prelim

Markets:

• WTI crude down 0.4% to $101.75, keeps above the $100 mark
• European stocks more mixed; DAX up 0.8%, CAC 40 down 0.3%
• US futures steady with S&P 500 futures up 0.2%
• USD and CAD lead, NZD lags on the day
• US 10-year yields flat at 4.47%
• Gold down 0.2% to $4,703 while silver is up 1% to $87.38

It was a quieter session as markets kept the calm despite the US-Iran conflict continuing to play out.

There’s no fresh progress as the focus and attention now shifts towards the east, with US president Trump making his trip to China. The latest from the Chinese state media is that Trump has arrived in Beijing. He will be meeting with China president Xi Jinping over the next two days, so expect key headlines to flow during the Asia and European sessions if there will be anything.

But for today, there wasn’t much happening in markets as tensions continue to simmer.

Oil prices are steadier and not doing much with WTI crude keeping above the $100 mark. The commodity is down 0.4% to $101.75 but not keeping elevated in holding above triple digits for now.

Elsewhere, the mood in the equities market is also steadier with European indices holding more mixed but with some slight gains at the balance. The DAX is up 0.8% on the day while CAC 40 is down 0.3%.

As for US futures, the mood music is leaning towards being cautiously optimistic after the late rebound yesterday. S&P 500 futures are up 0.2% with Nasdaq futures up 0.6% on the day as we see a reversal back into tech shares.

In other markets, the dollar is sitting a little higher with EUR/USD down 0.2% to 1.1715 while USD/JPY continues to flirt at one-week highs and keeping near levels where Tokyo officials last decided to intervene last week. The latter is seen around 157.60-70 levels on the day.

Besides that, the bond market is not doing much with Treasury yields mostly flattish across the curve. And in the precious metals space, we are seeing a more mixed picture with gold down 0.2% to $4,703 while silver is up 1% to $87.38.

This article was written by Justin Low at investinglive.com.

Ever since COVID, the media has been quick to jump on any new disease outbreak, trying to catch the beginning of the next global pandemic. In 2024, the bets were on a mutated monkeypox virus, following a rise in infections and deaths. Some governments even floated the idea of closing airports to prevent the virus from crossing borders.

Fortunately, things never came close to the scale of COVID, so no global lockdowns were needed. The S&P 500 and Nasdaq barely even blinked, largely because the world already had an effective vaccine against mpox — JYNNEOS, the first FDA-approved vaccine from the Danish biotech company Bavarian Nordic, whose shares jumped more than 30% in just a few days due to the surge in demand.

Now, two years later, panic is building around hantavirus. Even though infectious disease experts — including officials from the World Health Organization — say there’s no evidence of widespread transmission and no reason for quarantines, the media is closely tracking the passengers of the now-infamous expedition ship MV Hondius, where three people died and at least seven others fell ill.

The bad news is that the Andean strain detected among passengers is estimated to have a fatality rate of between 20% and 40%. The good news is that, unlike COVID-19, hantavirus is not generally transmitted through the air. This means the risk of it becoming a global pandemic remains relatively low, unless, of course, a new airborne strain emerges.

To put this in context, between 1996 and 2023, the world recorded more than 3,000 outbreaks. Imagine what would happen to the global economy if governments responded to each one by closing borders and imposing lockdowns.

So, is it time to load up on pharma names and stay-at-home stocks?

Probably not, since the risk of a new pandemic remains low. As for last week’s rally in vaccine manufacturers like Moderna, Novavax, and Inovio, it seemed more like short-term speculation.

Right now, the market is paying much closer attention to developments surrounding the Strait of Hormuz and the future of the AI sector. If geopolitical tensions escalate — for example, if Iran attempts to block the Bab el Mandeb Strait — or if massive investments in AI fail to generate significant returns, the impact would likely be far greater than another wave of headlines about the hantavirus.

For now, though, judging by the major indexes, investors are still betting on the best-case scenario.

This article was written by IL Contributors at investinglive.com.

• Prior month 0.5% MoM and 4.0% YoY
• Prior month ex food and energy 0.1% MoM and 3.8% YoY
• PPI MoM 1.4% versus 0.5% estimate
• PPI YoY 6.0% versus 4.9% estimate
• PPI ex food and energy MoM 1.0% vs 0.3% estimate.Highest since March of 2022.
• PPI ex food and energy YoY 5.2% vs 4.3% estimate
• PPI ex food, energy and trade MM +0.6% vs +0.2% last month
• PPI ex food, energy and trade YoY 4.4% vs 3.6% last month
• Services inflation was up 2.5%

The two year yield has moved above the 4% level to 4.010% 1.5 basis points. The 10 year yield is up 1.7 basis points at 4.488%. Both were mostly lower at the start of the North American session.

The S&P index is trading down -1.71 points in premarket trading. It was up about 21 points at the start of the North American session. The NASDAQ index is still up around 95.7 but down from being up over 200 points earlier in the US session. The Dow is down -220 points.

This article was written by Greg Michalowski at investinglive.com.

• Prior +0.3%; revised to +0.2%

There was a negative revision to the Q4 estimate, and that’s the only minor tweak to the preliminary report. Other than that, this just reaffirms that the euro area economy did post marginal growth in the first quarter of the year.

After a more resilient showing to start the new year, things are taking a turn now as higher energy prices are dampening economic sentiment in March and April. And that is likely to persist further deeper into Q2 as higher oil and gas prices start to become more embedded into other parts of the economy.

Of note, household sentiment is one that is likely to see the biggest knock. And in turn, that will weigh on consumption activity with overall business activity also likely to suffer amid higher costs. That especially in the manufacturing sector, which looked like it was going to turn the corner at the start of the year. But alas, not to be it seems.

This article was written by Justin Low at investinglive.com.

• Prior +1.7%
• HICP +2.5% vs +2.5% y/y prelim
• Prior +2.0%

More to come..

This article was written by Justin Low at investinglive.com.

• Wholesale prices +2.0% m/m
• Prior +2.7%
• Wholesale prices +6.3% y/y
• Prior +4.1%

It’s no surprise as we’re seeing this spread through to all parts of the economy, such as producer prices and also in part consumer prices too. The only positive note on the latter is that it hasn’t quite spread to core inflation just yet. But as the Middle East conflict drags on, it will only be a matter of time.

Circling back to wholesale prices, the jump higher in March and now April are quite noticeable from the chart below.

A key reason for the jump is the spike in energy prices, especially in the price of petroleum products. Prices here were 12.7% higher compared to March and on average 37.3% higher compared to April last year.

Besides that, the annual estimate comparison also reflects a significant price increase in the wholesale trade of non-ferrous ores, metals, and semi-finished metal products. That was seen higher by 40.2% compared to April last year.

This article was written by Justin Low at investinglive.com.

• Goldman Sachs sees broad dollar strength as energy shock keeps yields elevated
• Reserve Bank of New Zealand survey shows rising inflation expectations
• OECD chief backs BOJ path and calls for trade reform ahead of Trump-Xi talks
• Iran rebuilds access to 30 of 33 Hormuz missile sites, US assessments show
• OECD sees BOJ hiking rates to 2% by end-2027 as Japan exits deflation era
• NVDA Huang is going to China with Trump
• Morgan Stanley maps four oil shock scenarios from Fed hikes to global recession
• Australian Q1 wage price index jumps 3.3% y/y, as expected and below Q4 2025 3.4%
• PBOC sets USD/ CNY reference rate for today at 6.8431 (vs. estimate at 6.7946)
• NZ PM Luxon promises fiscal responsibility … as you do
• ICYMI – Iran tightens Hormuz grip as Iraq and Pakistan strike bilateral transit deals
• Hot CPI print – Wall Street inflation fears mount as break-even rates hit multiyear highs
• Goldman Sachs says yuan 20% undervalued, lifts forecasts to 6.50 in a year
• Hot US inflation print fans fears of Fed rate hike as energy costs spread
• Alaska passes gold and silver legal tender bill, exempting precious metals from sales tax
• India more than doubles gold and silver import tariffs to 15%, effort to prop up the rupee
• Preview – Citi tips Nvidia Q1 revenue beat ahead of May 20 earnings report
• Oil – private survey of inventory shows a headline crude oil draw just less than expected
• investingLive Americas FX news wrap 12 May:Hot CPI reignites inflation fears

It was one of those sessions where the news flow was thin but the headlines that did land carried weight well above their volume. The dollar edged higher for another day, oil slipped a touch, and the world’s most critical shipping lane generated a news story simply because a ship tried to use it.

The New York Times broke the most consequential report during US hours, revealing that Iran has restored operational access to 30 of its 33 missile sites along the Strait of Hormuz and still holds roughly 70% of its prewar missile stockpile. The findings, drawn from US intelligence assessments, were described as alarming to senior officials and serve as a reminder that whatever diplomatic maneuvering is underway, the military arithmetic along the strait has not shifted materially in the West’s favour. Shortly after, reports emerged that a China-flagged supertanker had attempted to exit Hormuz. That the attempted passage of a single vessel qualifies as market-relevant news tells you most of what you need to know about the state of global energy shipping at the moment.

The session’s lighter moment came courtesy of Nvidia chief executive Jensen Huang, who was spotted boarding Air Force One ahead of President Trump’s trip to Beijing. Trump subsequently confirmed via social media that Huang was among the delegation, joining a sizeable contingent of senior American business executives making the journey. Trump added that he plans to press Chinese President Xi Jinping to open up the Chinese economy during their meetings. The request will be familiar to anyone who has followed US-China relations for more than five minutes, and expectations for a breakthrough remain appropriately modest.

In gold markets, Alaska’s Senate passed legislation recognising gold and silver as legal tender and removing sales tax treatment from specie transactions, sending the bill to the governor for signature. It is a meaningful development for sound money advocates but provided no immediate lift to the metal itself, with gold weighed down on the day by the slightly firmer dollar.

From the Reserve Bank of New Zealand we had news of inflation expectations inching higher.

Regional equities were mixed.

This article was written by Eamonn Sheridan at investinglive.com.

The OECD secretary-general said the BOJ is not clearly behind the curve on rates and called for reform of international trading rules, describing the upcoming Trump-Xi summit as an important part of that process.

Summary:

• The BOJ is not considered clearly behind the curve on monetary policy, with inflation expectations anchored and wage dynamics continuing to strengthen
• Market-distorting practices, including the use of subsidies to create unfair trade advantages, need to be more effectively addressed to preserve well-functioning global markets
• Reform of rules-based international trading arrangements is necessary, and dialogue between President Trump and President Xi at this week’s summit is viewed as an important component of that broader process
• Boosting supply chain resilience, strengthening economic security and tackling unfair trade practices are all identified as priorities
• On the US-China summit, the secretary-general stressed that dialogue is always important for maintaining a rules-based global system

The OECD secretary-general has offered a measured defence of the Bank of Japan’s monetary policy stance while calling for substantive reform of the international trading system, framing the upcoming summit between President Donald Trump and Chinese President Xi Jinping as a necessary but insufficient step toward resolving deeper structural tensions in global trade.

On monetary policy, the secretary-general said the BOJ cannot be considered clearly behind the curve, pointing to anchored inflation expectations and strengthening wage dynamics as evidence that Japan’s gradual tightening path remains appropriate. The remarks align with the OECD’s broader projections, published earlier Wednesday, that the BOJ will raise its policy rate to 2% by the end of 2027, and suggest the organisation sees no urgent case for the central bank to accelerate that timeline despite external pressure from the Middle East conflict and global energy market disruption.

On trade, the secretary-general struck a more urgent tone. Market-distorting practices, particularly the use of government subsidies to engineer unfair competitive advantages, were identified as issues that require better and more systematic international responses if well-functioning global markets are to be preserved. The remarks carry clear implications for the ongoing friction between Western economies and China over industrial policy and state support for strategic sectors.

The Trump-Xi summit, scheduled for later this week in Beijing, was framed as an important moment for dialogue, but the secretary-general was careful to situate it within a larger multilateral context. Bilateral engagement between the world’s two largest economies matters, but the OECD’s position is that durable solutions require reform of the rules-based international trading architecture more broadly, not simply a managed accommodation between Washington and Beijing.

Supply chain resilience and economic security were also highlighted as priorities, reflecting the OECD’s concern that the vulnerabilities exposed by successive shocks since the pandemic have not yet been adequately addressed at a systemic level.

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The OECD secretary-general’s assessment that the BOJ is not clearly behind the curve on inflation offers modest reassurance to JGB markets that the central bank is unlikely to accelerate its tightening path beyond current expectations, reducing the immediate risk of a sharp yield spike. On trade, the framing of the Trump-Xi summit as an important but insufficient step toward broader rules-based reform signals that any bilateral deal reached this week is unlikely to satisfy multilateral concerns about subsidies and market distortion, keeping structural trade uncertainty elevated for supply chains and commodity flows over the medium term.

This article was written by Eamonn Sheridan at investinglive.com.

New Zealand PM Luxon:

• Government committed to putting debt on a downward path towards 40% of GDP, returning to Obegalx surplus by FY 2028/29
• Net operating spending on new initiatives will total NZ$2.1 bln, about NZ$300 mln less than set in December
• Global uncertainties reinforced importance of responsible economic management and fiscal discipline

This article was written by Eamonn Sheridan at investinglive.com.

US consumer prices rose 3.8% in April, above forecasts, with energy accounting for 40% of the increase, prompting analysts to warn of rising rate hike risks and pushing December hike odds to nearly 30%.

Summary:

• The US Consumer Price Index rose 3.8% year-on-year in April, ahead of the 3.7% consensus forecast and up from 3.3% in March, with energy prices accounting for 40% of the monthly increase, according to the source material
• Core CPI, stripping out food and energy, came in at 2.8%, above the 2.7% estimate and higher than the prior 2.6% reading, while services inflation excluding energy rose 3.3% and goods prices gained 1.1%, per the report
• CME FedWatch data showed markets pricing a near-98% chance of no change at the June meeting, but a roughly 30% probability of a rate hike by December, according to the source material
• Analysts at Morningstar, Capital Economics, RSM, and Morgan Stanley Wealth Management all cautioned that energy cost pass-through and broadening price pressures are complicating the Fed’s outlook and reducing the likelihood of cuts in 2026, per the source material
• Federal Reserve officials including Cleveland Fed president Beth Hammack, Fed governor Chris Waller, and Chicago Fed president Austan Goolsbee each flagged concerns about the cumulative effect of successive inflation shocks and the upward drift in services prices, according to the source material
• Monthly electricity prices rose 2.1% in April versus March, food prices gained 0.5% month-on-month, and tomato prices surged 15% for a second consecutive month, largely attributed to drought conditions across North America, per Capital Economics

A stronger-than-expected US inflation reading for April has rattled rate cut expectations and raised the prospect of interest rate increases, as energy costs driven by the Iran war continue to bleed into broader consumer prices and stretch the Federal Reserve’s patience to its limits.

The Consumer Price Index climbed 3.8% in April compared with a year earlier, exceeding forecasts of 3.7% and accelerating from 3.3% in March. Energy prices were the single largest contributor, accounting for four in every ten percentage points of the monthly increase. Shelter and food prices also pushed higher, adding to a picture of broadening inflationary pressure that analysts say the Fed cannot easily dismiss as transitory.

Core inflation, the measure that strips out food and energy and which the Fed watches most closely for signals about underlying price dynamics, printed at 2.8%, above both the 2.7% consensus and the previous month’s 2.6% reading. Services inflation excluding energy ran at 3.3%, while goods prices rose 1.1%, partly reflecting the ongoing pass-through of tariffs into retail costs. Electricity prices jumped more than 2% month-on-month, food prices rose half a percent, and some agricultural commodities recorded sharper moves, with drought conditions across North America cited as a contributing factor to outsized increases in fruit and vegetable prices.

Analysts were broadly united in warning that the combination of energy cost pass-through and persistent services inflation narrows the Fed’s room for manoeuvre. The odds of a rate hike by December, negligible only months ago, have climbed to nearly 30% according to market pricing, while the probability of any cut this year has effectively collapsed. Analysts noted that the transmission of higher oil and food costs into households’ inflation expectations represents a particular concern, since shifting expectations tend to become self-fulfilling through wage and price-setting behaviour.

Several Federal Reserve officials have signalled that the current inflationary episode deserves more than the standard dismissal. Cleveland Fed president Beth Hammack questioned whether the sequence of shocks since the pandemic, spanning supply chain disruptions, the Russia-Ukraine conflict, tariffs, and now the Iran war, is genuinely independent or whether it is beginning to embed a more durable inflationary mindset among businesses and consumers. Fed governor Chris Waller, previously among the more dovish voices on the committee, cautioned that repeated shocks applied in succession could keep inflation elevated for a sustained period, making the conventional policy of looking through temporary price spikes increasingly difficult to justify. Chicago Fed president Austan Goolsbee said the April data was moving in the wrong direction, and that the upward drift in services inflation was the element that concerned him most, noting it could not be attributed to energy or tariffs alone.

The report lands just as incoming Fed Chair Kevin Warsh prepares to take the helm, with his confirmation expected imminently. Any dovish lean from new leadership, including arguments that artificial intelligence could structurally dampen inflation and allow earlier rate reductions, faces a deeply sceptical committee and a data backdrop that points firmly toward sustained vigilance rather than accommodation.

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A hotter-than-expected CPI print, driven substantially by energy costs, reinforces the case for oil prices remaining a key macro risk factor for interest rate expectations through the second half of 2026. Markets pricing in a roughly 30% probability of a rate hike by December signals a meaningful shift in the rate trajectory implied just weeks ago, a development that could weigh on risk assets and support the dollar in the near term. For energy markets specifically, the concern is self-reinforcing: elevated oil prices are now visibly transmitting into broader inflation, which raises the political and monetary policy cost of any further rise in crude. Incoming Fed Chair Kevin Warsh faces a particularly constrained environment, with any inclination toward accommodation likely to be tested early by a committee increasingly focused on inflation risks rather than growth support.

This article was written by Eamonn Sheridan at investinglive.com.