Aurelia Butler

TOKYO (Reuters) – The dollar was steady against a handful of peers on Wednesday, as the market assessed calls for patience from Federal Reserve officials and awaited the publication of Fed minutes for more insight on the central bank’s path.Meanwhile, the kiwi inched up as traders awaited the Reserve Bank of New Zealand’s monetary policy decision.With little to drive the market in terms of economic data this week, major currencies continued to move in a tight range.Investors have been shoring up rate cut bets after a milder inflation reading last week boosted expectations for U.S. rate cuts this year.Following a slew of Fed officials striking a cautious note, markets had about 43 basis points (bps) of easing priced in versus last week’s high of 52 bps.Fed Governor Christopher Waller said overnight that he would need to see several more months of good inflation data before he would be comfortable supporting an easing in the stance of monetary policy.That timeline was echoed by Cleveland Fed President Loretta Mester.Still, Waller’s comments gave the market little new to go on, said Kyle Rodda, senior financial market analyst at Capital.com.”He basically told us that if inflation comes down, the Fed will cut… One implies the other and doesn’t say anything about whether inflation and rates will come down.”While markets remain hopeful that U.S. inflation will continue to slow down, PCE data due on May 31 will be a crucial test for confirming those expectations, he added. The dollar index was firm at 104.61 against a basket of currencies, after popping up briefly to 104.76 overnight.Ahead of next week’s data, the market will get minutes of the Fed’s April 30-May 1 monetary policy meeting, which investors will scrutinise for further clarity on the central bank’s thinking.Fed Chair Jerome Powell, in his press briefing after the Fed held rates steady at that meeting, ruled out rate hikes.The euro was up 0.04% at $1.0858, with focus on Thursday’s data from the European Central Bank negotiated wage tracker and the euro zone Purchasing Managers’ Index.Sterling was last trading at $1.2713, up 0.05% on the day and not far off a two-month high touched on Tuesday as the market awaited a key UK inflation report due later in the day.Economists polled by Reuters say the data will probably show headline inflation slowed sharply to 2.1% in April, although the Bank of England (BOE) thinks it will speed up again to around 2.6% later this year.Markets are pricing in 53 bps of cuts from the BOE this year.Against the yen, the dollar was flat at 156.20, as traders took a breather from testing the currency pair.Fears of currency intervention by Tokyo still had traders on alert after suspected rounds of intervention earlier this month.The yen was unchanged after data showed Japan’s exports rose 8.3% in April from a year earlier.During Asian trading, the RBNZ is expected to leave its benchmark cash rate at 5.5%, with focus instead on whether it will change the projected outlook for rates out to next year.The New Zealand dollar NZD=D3 rose 0.12% versus the greenback at $0.610.The Australian dollar was up 0.05% at $0.6670.In cryptocurrencies, bitcoin last rose 0.71% to $70,207.54.Ether last rose 1.32% to $3,795.00, not far from its highest level since mid-March. Cryptocurrencies surged earlier this week on speculation about the outcome of applications for U.S. spot exchange-traded funds that would track the world’s second-biggest cryptocurrency. More

TOKYO (Reuters) – Japan’s exports rose for a fifth straight month in April, helped by a boost in value from the weak yen, government data showed on Wednesday, but shipment volumes struggled as soft external demand weighed on growth.Policymakers are counting on exports to offset weak domestic consumption. However, export volumes have remained soft with Japan’s biggest trading partner China struggling to stage a convincing economic recovery.The trade data comes as Japan seeks to drive sustainable growth underpinned by higher wages and durable inflation, seen as prerequisites for the central bank to shift away from near-zero interest rates.Ministry of Finance data out on Wednesday showed Japan’s exports rose 8.3% in April from a year earlier, undershooting an 11.1% gain expected by analysts in a Reuters poll. It accelerated from a 7.3% gain in March.Imports also rose 8.3% in the year to April, roughly matching economists’ estimate and swinging from a 5.1% decrease in March.As a result, the trade balance came to a deficit 462.5 billion yen ($2.96 billion) in April, swinging from a 387 billion yen surplus in March.The trade statistics come a week after data showed Japan’s economy contracted 2% in the first quarter, with exports of goods and services tanking 5%, leaving the economy without a growth engine.Separately, Japanese business morale held steady in May, but manufacturers and service-sector firms complained that inflationary pressures driven by the weak yen were squeezing profit margins, a Reuters monthly survey showed on Wednesday.($1 = 156.1900 yen) More

(Reuters) – British employers handed out pay deals worth almost 5% in the three months to April, the busiest month for annual settlements, according to a survey that adds to signs that pay growth – a major driver of inflation pressure – may be slow to dissipate.Median basic pay settlements in the three months to April were 4.9% higher than a year earlier, up from 4.6% in the three months to March, according to human resources data provider Brightmine – previously known as XpertHR.The Bank of England is closely watching pay data. Before they cut interest rates, most BoE policymakers want to see signs that annual wage growth is heading back to the 3-4% range from the most recent rate of 6%.”We have seen a noticeable drop in the level of pay awards since last year – from 6% in 2023 to just under 5% in the first quarter of 2024,” Sheila Attwood, senior content manager at Brightmine, said.”However, we are now noticing some stability, as the first April settlements are also centred on this level,” she added.Employers surveyed by Brightmine in March expected the median pay award for 2024 to be 4%, while a BoE survey conducted in April showed employers anticipate pay growth of 4.6% over the coming year.On Monday BoE Deputy Governor Ben Broadbent cited survey evidence from companies that showed a major driver of inflation pressure – strong wage growth – was likely to dissipate only slowly.But with wages now outstripping inflation, Broadbent said that could put companies under less pressure to offer such larger pay increases in the future.The Brightmine survey was based on 102 pay settlement between Feb. 1 and April 30, covering more than 355,000 employees. More

(Reuters) – A look at the day ahead in Asian markets.Monetary policy decisions from New Zealand and Indonesia are the main points of focus in Asia on Wednesday, as debate over the timing of the first U.S. rate cut ebbs and flows, and lofty equity markets consider their next step.Asian stocks retreated on Tuesday, snapping a seven-day winning streak despite the relative calm in currency and bond markets. But Wall Street crept higher, with the Nasdaq reaching a new peak ahead of Nvidia (NASDAQ:NVDA)’s first-quarter earnings report.The message on interest rates from a raft of Federal Reserve officials on Tuesday was patience. Indeed, it may be several months before policymakers are confident inflation is really falling back to target, allowing them to start cutting rates.With many stock markets around the world at record or multi-year highs, a period of cooling may be inevitable. The MSCI Asia ex-Japan index on Tuesday slipped 0.9% – its biggest fall in over a month – while Japan’s Nikkei lost 0.3%, and Hong Kong’s Hang Seng shed more than 2%. After Morgan Stanley’s Mike Wilson rowed back on his long-standing gloomy outlook for Wall Street on Monday, another prominent bear, JP Morgan’s Marko Kolanovic, reiterated his view that U.S. stocks are too expensive and should head south. He is much more upbeat on Asia, favoring Japanese and Chinese equities over U.S. markets. Japan is attractive because of inflation and monetary policy normalization, while measures to support the housing market, underweight investor positioning and cheap valuations are reasons to buy China.While the world maintains its vigil ahead of AI darling Nvidia’s results on Wednesday, investors in Asia digest two monetary policy decisions and other potentially exchange rate-moving data, including Japanese trade and South Korean producer price inflation. The Reserve Bank of New Zealand and Bank Indonesia are both expected to leave their key interest rates on hold, at 5.50% and 6.25%, respectively, according to Reuters polls.The RBNZ is only expected to cut its cash rate once this year, and probably not until the final quarter. Money markets are a bit more dovish, and are currently pricing in 45 basis points of easing by year-end. After stunning markets last month with an unexpected rate hike to support the rupiah, Bank Indonesia (BI) is expected to keep its seven-day reverse repurchase rate at 6.25% and hold it there for several months, or until the Fed cuts U.S. rates.In a rare media briefing earlier this month, BI Governor Perry Warjiyo said current data shows there is no need to raise rates again, and the central bank is trying to strengthen the rupiah beyond 16,000 per dollar.The rupiah closed trading on Tuesday at 15,990 per dollar.Here are key developments that could provide more direction to markets on Wednesday:- New Zealand monetary policy decision- Indonesia monetary policy decision- Japan trade (April) More

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BUENOS AIRES (Reuters) – Argentina’s economic activity index is expected to have shrunk 6.9% year-on-year in March, its deepest drop since 2020 and the fifth monthly contraction in a row, a Reuters poll on Tuesday showed.The index slipped an estimated 7.2% in March from February, said the 13 local analysts in the survey.The year-on-year contraction estimates ranged from 4% to 10.3%.”The decline in sectors linked to domestic consumption, industry and construction is consolidating and deepening,” said Pablo Besmedrisnik, economist and director of the consulting firm Invenomica, while noting mining and agriculture are among the sectors showing growth.The South American country’s industrial production indicator showed a 21.2% slowdown year-on-year in March, government data showed. Economists remain cautious about the end of the first half-year and beginning of the second half, predicting a gradual recovery.”We don’t see a dizzying recovery in activity for the first half of the year,” said Federico Gonzalez Rouco, economist at Empiria Consultores. “We believe that inflation is in a process of deceleration but it is also accumulating risks associated with the foreign exchange market.”Statistics agency INDEC is expected to publish the official figures on Wednesday. More

SEOUL (Reuters) -Sixteen companies at the forefront of developing Artificial Intelligence pledged on Tuesday at a global meeting to develop the technology safely at a time when regulators are scrambling to keep up with rapid innovation and emerging risks. The companies included U.S. leaders Google (NASDAQ:GOOGL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT) and OpenAI, as well as firms from China, South Korea and the United Arab Emirates.They were backed by a broader declaration from the Group of Seven (G7) major economies, the EU, Singapore, Australia and South Korea at a virtual meeting hosted by British Prime Minister Rishi Sunak and South Korean President Yoon Suk Yeol.South Korea’s presidential office said nations had agreed to prioritise AI safety, innovation and inclusivity.”We must ensure the safety of AI to … protect the wellbeing and democracy of our society,” Yoon said, noting concerns over risks such as deepfake. Participants noted the importance of interoperability between governance frameworks, plans for a network of safety institutes, and engagement with international bodies to build on agreement at a first meeting to better address risks. Companies also committing to safety included Zhipu.ai, – backed by China’s Alibaba (NYSE:BABA), Tencent, Meituan and Xiaomi (OTC:XIACF) – UAE’s Technology Innovation Institute, Amazon (NASDAQ:AMZN), IBM (NYSE:IBM) and Samsung Electronics (KS:005930). They committed to publishing safety frameworks for measuring risks, to avoid models where risks could not be sufficiently mitigated, and to ensure governance and transparency. “It’s vital to get international agreement on the ‘red lines’ where AI development would become unacceptably dangerous to public safety,” said Beth Barnes, founder of METR, a group promoting AI model safety, in response to the declaration.Computer scientist Yoshua Bengio, known as a “godfather of AI”, welcomed the commitments but noted that voluntary commitments would have to be accompanied by regulation.Since November, discussion on AI regulation has shifted from longer-term doomsday scenarios to more practical concerns such as how to use AI in areas like medicine or finance, said Aidan Gomez, co-founder of large language model firm Cohere on the sidelines of the summit. China, which co-signed the “Bletchley Agreement” on collectively managing AI risks during the first November meeting, did not attend Tuesday’s session but will attend an in-person ministerial session on Wednesday, a South Korean presidential official said.Tesla (NASDAQ:TSLA)’s Elon Musk, former CEO of Google Eric Schmidt, Samsung Electronics’ Chairman Jay Y. Lee and other AI industry leaders participated in the meeting. The next meeting is to be in France, officials said. More

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