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China’s Vice Commerce Minister and Deputy International Trade Representative, Ling Ji, met with a group of German small and medium-sized enterprise (SME) representatives in Beijing on Tuesday. Ling highlighted that China’s vast consumer market, well-developed industrial supply chains, and dynamic tech innovation environment offer strong opportunities for German SMEs to invest and grow. He also expressed hopes that China and Germany will work together to uphold free trade, ensure stable global industrial and supply chains, and continue fostering mutually beneficial cooperation.

Info comes via Chinese state media, Global Times in this case.

This article was written by Eamonn Sheridan at www.forexlive.com.

The Wall Street Journal (gated) with the sobering report, here are their Key Points:

• Vladimir Putin’s war successes give him latitude to slow walk peace negotiations.
• Russia’s economy relies on military industry, making unwinding the war in Ukraine difficult.
• Neighbors fear Russia’s war economy might refocus on them if the Ukraine war ends.

And this:

• “It is absolutely imperative for Russia to continue to rely on the military industry, because it [has] become the driver of economic growth,” said Alexander Kolyandr, a senior fellow at the Center for European Policy Analysis. “For a while, it will be next to impossible for Russia to reduce military spending.”

Trump was all about ending the war on Ukraine on ‘day one’. Obviously that didn’t happen (as if anyone with half a brain believed him). And he is not having any success ending it now.

This article was written by Eamonn Sheridan at www.forexlive.com.

April 2025 monthly inflation CPI data from Australia

Comes in at 2.4% y/y

• expected 2.3%, prior 2.4%

Trimmed mean is 2.8% y/y

• prior 2.7%

A small tick higher for monthly inflation in Australia. In my preview earlier, and also down the bottom of this post, I have oputlined all the caveats surrounding this data. Still, a tick higher is a tick higher, so it doesn’t go into the good news bucket.

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The monthly CPI data from Australia does not show all components of the CPI, that’ll have to wait for the quarterly data release (late in April).

• The monthly CPI indicator does, however, provide a timelier indication of inflation using the same data collected for use in the quarterly CPI. The monthly reading includes updated prices for between 62 and 73 per cent of the weight of the quarterly CPI basket, its not the full picture.

This article was written by Eamonn Sheridan at www.forexlive.com.

Australian Q1 2025 Construction Work Done

0.0% q/q, not a good result, well under expected and well under the previous quarter

• expected +0.4%, prior +0.5%

more to come

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Construction work done includes building work (residential and non – residential) and engineering work.

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan is reportedly offering to buy up to $6.94 billion worth of U.S. semiconductors as part of ongoing trade negotiations with Washington, according to the Asahi newspaper, which cited an unnamed source.

The Japanese government would provide subsidies to domestic firms purchasing chips from U.S. companies like Nvidia, aiming to help reduce the roughly 10 trillion yen trade surplus Japan holds with the U.S.

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Japan’s chief tariff negotiator, Ryosei Akazawa, is expected to travel to the U.S. around May 30 for a fourth round of trade discussions.

This article was written by Eamonn Sheridan at www.forexlive.com.

South Korea foreign exchange market to close June 3 for presidential election.

Note for the diary.

This’ll thin out trading that day.

This article was written by Eamonn Sheridan at www.forexlive.com.

Bank of Japan Governor Ueda and Japan finance minister Kato comments here:

• Bank of Japan Governor Ueda says tariff negotiations means outlook remains uncertain
• Japan finance minister Kato – Will closely monitor bond market situations

The dribble lower for USD/JPY matched up with the timing but I don’t see too much of note in the remarks. If anything, Ueda’s comments on JGBs are likely bearish yen at the margin. Given the big move overnight though, priced in is apt:

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan finance minister Kato – Will closely monitor bond market situations

Yesterday we had a sign Japan is going to take some action on the yield elevation for Japanese Government Bonds:

• ICYMI Japan is to consider trimming super-long bond issuance – Reuters

This article was written by Eamonn Sheridan at www.forexlive.com.

Data on Tuesday from the US showed a solid jump for consumer sentiment:

• US consumer confidence for May 98.0 versus 87.0 estimate.

But will that translate into spending? Barclays are wary, outlining in a note:

• policy-related headwinds look set to gradually intensify in the coming months
• we expect consumer spending to continue to decelerate in the current quarter before posting lacklustre increases through year-end
• The note adds that while risks are skewing toward more supportive fiscal policy, effects on income and spending are unlikely to materialize until 2026.

This article was written by Eamonn Sheridan at www.forexlive.com.

Australian inflation data for April 2025 is due at 1130 Sydney time:

• 0130 GMT
• 2130 US Eastern time

This is CPI for the month of April alone and is not viewed as complete or official. Nevertheless, it’s a guide.

CBA on what to expect, in breif:

We expect a 2.3%/yr outturn, slightly lower

than the 2.4%/yr in March

. Driving outcomes will be the higher annual increase in health insurance premiums and

strong

expected

travel demand, to be offset by lower fuel prices.

• We expect 2.3%/yr, slightly lower than the 2.4%/yr in March
• Driving outcomes will be the higher annual increase in health insurance premiums and strong expected travel demand, to be offset by lower fuel prices.

Westpac:

• forecasting a 0.3% rise in the April Monthly CPI
  Indicator which will take the annual pace down to 1.9%yr.
• Being the first month of the quarter April provides an update
  on quarterly prices for clothing & footwear, maintenance of
  dwellings and furniture & household equipment. The first month
  of the quarter focuses on goods prices so we have to wait for
  the second and third month of the quarter to get the quarterly
  updates on services.

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I’ve posted this info before, but ICYMI:

In Australia, the Consumer Price Index (CPI) measures the average change over time in the prices paid by households for a fixed basket of goods and services. Traditionally, the Australian Bureau of Statistics (ABS) has published CPI data quarterly, providing comprehensive insights into inflation trends.

To offer more timely information, the ABS introduced a Monthly CPI Indicator in October 2022. This monthly indicator includes updated prices for around two-thirds of the items in the CPI basket, offering a more frequent snapshot of inflation. However, it is less detailed than the quarterly CPI, as it covers fewer items and provides data only at the national level. The monthly indicator includes aggregate headline CPI, trimmed mean, each of the 11 CPI groups (e.g., clothing & footwear, health), and some selected expenditure classes (e.g., automotive fuel, new dwelling costs, rents, domestic and international travel, and some food categories).

While the monthly CPI indicator follows similar trends to the quarterly CPI, they are not identical. This is because, when prices are collected less frequently than monthly, the monthly CPI indicator assigns price changes to the month they are collected, whereas in the quarterly CPI series, price changes are allocated across the entire quarter. Therefore, the average of the index in the three months for the monthly CPI indicator will not equal the index of the quarterly CPI.

In summary, the monthly CPI indicator provides more frequent updates on inflation trends, while the quarterly CPI offers a more comprehensive and detailed analysis.

This article was written by Eamonn Sheridan at www.forexlive.com.

Standard Chartered has trimmed its gold stance to a “core holding,” anticipating a near-term consolidation in prices after this year’s sharp rally. In a note to clients, the bank said it expects gold to approach USD 3,100 per ounce over the next one to three months, reflecting a familiar pattern of pause following strong gains.

Analysts pointed to recurring behaviour since 2022, where major buyers have shown clear price sensitivity, leading to intermittent periods of sideways movement. Despite the short-term moderation, Standard Chartered maintains a bullish longer-term view, projecting prices could climb as high as USD 3,500 within the next 6 to 12 months as central bank demand reaccelerates.

This article was written by Eamonn Sheridan at www.forexlive.com.

more to come

This article was written by Eamonn Sheridan at www.forexlive.com.