Aurelia Butler

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.Major economic data from China and Japan, and a central bank rate decision from the Philippines could be the main regional drivers for Asian markets this week, with investors growing increasingly nervous about the U.S. and global macro outlook.World stocks ended last week on a shaky footing as worries about the U.S. debt ceiling, credit conditions and the cumulative effect of 500 basis points of Fed rate hikes overshadowed surprisingly strong U.S. earnings.These were some of the issues discussed at the three-day meeting of G7 finance leaders that concluded on Saturday.The MSCI World index fell 0.5% – not a big deal, perhaps, but the second weekly decline in a row and the steepest since the U.S. banking crisis blow-up two months ago.Asian shares ex-Japan, however, inched up for a second weekly rise in a row, also something not seen since early March.If U.S. tech stocks are flying – the Nasdaq rose for a third week and Wall Street’s rally this year is entirely thanks to AI-centric stocks, according to SocGen – Asian tech is stuck in quicksand.The Hang Seng tech index fell last week for a sixth straight week, its longest losing streak since mid-2015 when the first tremors of the Chinese stock market earthquake were felt and only weeks before Beijing devalued the yuan.The latest Chinese economic indicators have been shocking. Inflation and imports collapsed in April, casting severe doubt over the strength of the economy’s post-lockdown recovery and ramping up expectations of more policy easing.Industrial production, retail sales and fixed asset investment data for April this week will paint a fuller picture. More sub-par numbers will likely increase the selling pressure on Chinese stocks – the Shanghai composite had its worst week since March, while the blue chip index fell for a fifth week and also had its biggest weekly fall in two months.Japan’s first-quarter GDP figures will be released on Wednesday, and perhaps more importantly, the latest inflation numbers are out on Friday.Core inflation is far higher than the Bank of Japan would like and is expected to have re-accelerated to 3.4% in April. Although new BOJ Governor Kazuo Ueda insists he will go slow on reversing the bank’s super-loose policy, some analysts expect the BOJ to abandon yield curve control this summer.Investors with exposure to Thailand are waiting to see how election results could shift the balance of power and first-quarter GDP figures will be released on Monday, the same day the Philippines central bank is expected to keep interest rates on hold at 6.25%.Here are three key developments that could provide more direction to markets on Monday:- Thailand GDP (Q1)- India WPI inflation (April)- Japan corporate goods price inflation (April) (By Jamie McGeever; Editing by Lisa Shumaker) More

Speaking to reporters in Delaware, Biden said he remained optimistic about agreeing on a deal. Biden had been scheduled to meet with lawmakers on Friday but the meeting was postponed.Biden said he had received an update on how talks had gone between administration staffers and their congressional counterparts.”I remain optimistic because I’m a congenital optimist,” Biden said. He said he believed there was a desire on both sides to reach an agreement. “I think we’ll be able to do it.”Biden said he still planned to leave on a trip to Japan this week for a meeting of G7 leaders. He has been scheduled to leave on Wednesday. More

Finance Secretary Benjamin Diokno reiterated his stance against a rate hike when he spoke to reporters. But he said he was just expressing his opinion and was only one of the seven monetary board members who will each vote during Thursday’s decision-making.”I’m for a pause, that’s my opinion. Inflation is going down, huge (foreign exchange) reserves, the current account deficit has expanded but it’s financially manageable and that’s because of the improved economy, infrastructure spending,” he said. “So over all, there’s no reason why we should increase the rates.”The Bangko Sentral ng Pilipinas (BSP) has raised rates by a total of 425 basis points since May last year to fight inflation, the full impact of which Diokno said had yet to be absorbed by the economy considering that monetary policy often works with a long lag.Philippine annual inflation eased for a third straight month in April to 6.6%.BSP Governor Felipe Medalla himself has said the month-on-month inflation trends in particular “present an even stronger argument” for keeping rates unchanged at the May 18 policy meeting.Some economists believe the inflation downtrend and cooling economic growth have built the case for the BSP to pause in its tightening cycle.However, the International Monetary Fund said on Friday that with risks to inflation remaining on the upside, “a continued tightening bias maybe appropriate until inflation falls decisively within the 2-4% target range”. More

Argentina will announce on Monday a new round of emergency government measures, including raising interest rates 600 basis points to 97 per cent, to try to stave off the country’s worst economic crisis in two decades.The Peronist government is desperate to avoid a big devaluation before elections in October. But the South American country is also running out of foreign exchange reserves as Argentines abandon the fast-devaluing peso and embrace the US dollar.Fuelled by money-printing to finance a large government deficit, Argentine inflation hit 109 per cent a year in April, the highest level since 1991. The economy ministry said the new measures, to be announced Monday, would involve the central bank stepping up intervention in the foreign exchange market to try to slow the peso’s fall.Economy minister Sergio Massa is also trying to persuade the IMF to bring forward the disbursement of agreed loans and will travel to China on May 29 to seek greater use of the renminbi in foreign trade. Last month, Argentina activated a currency swap with China allowing it to pay just over $1bn of its imports this month in renminbi.The IMF has already shown leniency towards Argentina over the past year, allowing it greater leeway on targets to increase reserves and reduce money-printing in an attempt to keep a $44bn loan programme on track. It is unlikely to want to bring forward disbursements in the months before a potentially pivotal election, which the government is likely to lose. Massa also plans to allow the import of food at a zero tariff to try to bring down inflation, a first in a country which is one of the world’s largest grain exporters. The government will also lower interest rates on a state-run scheme for Argentines to buy locally made products on credit, part of an effort to boost national industry.The latest package of measures does not represent a change of course, more an attempt to reiterate policies of heavy state intervention which have failed to bring down inflation or boost the economy. It also entails risks: constant rises in interest rates are making the servicing of a huge pile of domestic debt increasingly expensive.“This is just kicking the can a few inches down the road,” said Hector Torres, a former IMF executive director and Argentine diplomat who is now at the Canadian think-tank CIGI. “I have nothing against central banks using reserves to smooth volatility and fight speculators. But we are already out of reserves, deeply indebted to the IMF, with no access to capital markets. In that situation selling what we owe to the IMF to buttress an exchange rate that is clearly unsustainable is reckless. It can only invite speculators to bet on a new default.”Economists have criticised the government’s foreign exchange and price controls for creating huge distortions, deterring investment and depressing production. Many forecasters expect Argentina to enter recession this year, with Oxford Economics forecasting a 1.6 per cent fall in GDP, the worst outlook for any major Latin American economy.

Amid a bitter squabble over policy between president Alberto Fernández and his powerful vice-president Cristina Fernández de Kirchner, Massa is seen as one of the Peronist movement’s few remaining options as a presidential candidate for October’s elections. However, his plan to try to patch up the economy with temporary interventions to avoid painful austerity measures before the election has run into increasing difficulties, compounded by a severe drought which has hurt agricultural exports. Massa’s chances as a candidate now depend on the success of his economic plan over the next few months.The centre-right opposition has yet to agree on a presidential candidate this year, with support divided between Horacio Rodríguez Larreta, the centrist mayor of Buenos Aires, and conservative law-and-order candidate Patricia Bullrich.A far-right contender, Javier Milei, has been rising rapidly in the polls and could yet reach a second round run-off if he can increase his support beyond greater Buenos Aires. Milei has campaigned on a radical anti-establishment platform which includes abolishing the central bank and dollarising the economy. More

Hello and welcome to the working week.There is a symmetry to the next seven days. We begin with the reaction to Turkey’s presidential and parliamentary elections and end next Sunday with another national vote in neighbouring Greece. In both cases, the ruling party has been on the ropes because of the government’s response to national calamities both natural and man made. The Financial Times is on the ground in Ankara so you can read the latest analysis of those results.The other big set piece event this week is the G7 summit, hosted by Japan in Hiroshima. US president Joe Biden may not attend in person because of the US debt ceiling impasse, but there are plenty of reasons for member states to meet. Germany is pushing contentious plans to endorse gas investment while the US wants its rich nation partners to increase the economic pressure on China.Beijing meanwhile is busy playing mediator in the Ukraine conflict. It is sending a special envoy to visit Ukraine, Russia, Germany, France and Poland, starting on Monday. On this matter, the US and China are united.This week’s earnings are a mixed bag of food (in particular Greggs and Premier Foods), phones (BT and Vodafone) and fashion (Burberry and Boohoo.com). Further details below.In the UK, the National Conservatism Conference, an event created by the Edmund Burke Foundation, a public affairs group, to help build a western coalition of rightwing politicians, kicks off on Monday. On Tuesday, the heads of the Competition and Markets Authority will be grilled by MPs on the business and trade committee with questions being asked about their controversial decision to block Microsoft’s acquisition of Activision Blizzard.Finally, a plug for the US edition of the FTWeekend Festival, happening in Washington on Saturday with a guest list including Hillary Rodham Clinton, Salman Rushdie, Jamie Lee Curtis, Ta-Nehisi Coates, Barbara Sturm and various FT columnists and writers. You too can experience the weekend paper come to life online by registering at ft.com/festival-us, and if you are a newsletter subscriber save $20 by using the code NewslettersxFestival.Thank you to those who have got in touch about The Week Ahead list with suggestions. Email me at [email protected] dataThe US and China dominate the data run this week. US retail, manufacturing and house sales figures will provide further evidence as to the extent of the slowdown. The monthly Chinese activity readings are potentially important given recent signs that the post-Covid rebound is losing momentum.Japan will provide a first stab at its first-quarter gross domestic product growth figure and Canada provides an update on its inflation rate as measured by the consumer price index. The main data point for the UK this week will be unemployment figures on Tuesday. The EU publishes its spring economic forecast for GDP, inflation, employment and public finances on Monday. There will also be a variety of speeches from central bankers, while Bank of England governor Andrew Bailey answers MPs questions at a Treasury select committee hearing.CompaniesBoohoo reports full-year figures on Tuesday and there may well be tears. Online clothes retailing is not in a happy place at the moment. Witness Asos’s results last week. Boohoo had blamed a return to the high street for declining revenues in its last trading update. Simon Bowler, head of research at Numis, writes about Boohoo in an analyst note: “Given the exit rate, muted data around online demand (as in part evidenced by Asos) and risks associated with the US warehouse launch in the fiscal year, we see little incentive for the company to increase expectations at this stage.”Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayEU, spring economic forecast for GDP, inflation, employment and public financesIndia, April wholesale price index (WPI) inflation rate measureResults: Bridgestone Q1, Currys trading update, Diploma H1, Suzuki Motor Corp FYTuesdayCanada, April consumer price index (CPI) inflation rate figuresChina, April retail sales and industrial output dataEU, flash Q1 employment figuresGermany, Zew Economic Sentiment surveyInternational Energy Agency Oil Market ReportSpain, European Central Bank supervisory board member Anneli Tuominen and Dominique Laboureix, chair of the ECB’s single resolution board, speak at Iese Business School’s Madrid campusUK, monthly labour market figuresUS, NAHB Housing Market Index and April retail sales figuresResults: Boohoo.com FY, Bouygues Q1, Britvic H1, Greggs trading update, Home Depot Q1, Imperial Brands H1, Land Securities FY, Marston’s H1, Singapore Airlines FY, Vodafone FYWednesdayFTX’s US-based leadership team is due to appear in court to challenge the authority of liquidators charged with winding down the company’s business in the Bahamas.EU, April harmonised index of consumer prices (HICP) inflation rate figureJapan, preliminary Q1 GDP figuresUS, April housing starts dataResults: Aegon Q1 trading update, British Land FY, Cisco Systems Q3, Experian FY, JD Sports FY, Mitchells & Butlers H1, Sage H1, Siemens Q2, Synopsys Q2, Take-Two Interactive Software Q4, Target Q1, TJX Q1, TP ICAP Q1 trading update and AGM, Zurich Insurance Q1ThursdayFrance, Germany, Switzerland: financial markets closed for public holidaysJapan, April trade balance dataResults: BT Group FY, Burberry FY, easyJet H1, International Distributions Services FY, Investec FY, Premier Foods FY, Walmart Q1FridayGermany, April producer price index (PPI) inflation rate figuresJapan, April CPI inflation rate figuresUK, GfK Consumer Confidence surveyResults: Deere & Co Q2, IQE FY, Nationwide Building Society FYWorld eventsFinally, here is a rundown of other events and milestones this week. MondayFrance, president Emmanuel Macron hosts the Choose France summit to promote inward investment in the country. Read his FT opinion piece here.Israel, protests expected in Ramallah on the West Bank to mark the Nakba, or “catastrophe”, when Palestinians were forced from their villages or fled amid the war surrounding Israel’s creation.UK, National Conservatism Conference begins in London, with home secretary Suella Braverman and Conservative MP Jacob Rees-Mogg among the speakers. UK, the world’s first self-driving bus service is scheduled to begin in Scotland.UN Security Council holds a briefing on Ukraine. In Latvia, Canadian and Latvian forces begin training Ukraine soldiers.TuesdayBelgium, Economic and Financial Affairs Council (Ecofin) meeting of EU finance ministers in BrusselsFrance, 76th Cannes Film Festival beginsUK, Competition and Markets Authority chair Marcus Bokkerink and chief executive Sarah Cardell quizzed by MPs on the business and trade committee.US, secretary of state Antony Blinken, defence secretary Lloyd Austin and commerce secretary Gina Raimondo to testify at Senate appropriations committee hearing on the US-China relationship.WednesdayUK, Labour party leader Sir Keir Starmer and Bank of England governor Andrew Bailey give speeches at the British Chambers of Commerce global annual conference in LondonThursdayUK, local council elections in Northern IrelandUK, Bank of England governor Andrew Bailey appears before the Treasury select committee to answer questions on the impact of tightening on the economy and the role of quantitative easing in the outbreak of double-digit inflation. Separately, the BoE’s chief economist Huw Pill opens a research workshop gathering academics and central bankers from around the world to discuss the latest developments in macro-financial research.FridayIsrael, several thousand Israelis are expected to march through the alleyways of Jerusalem to the Western Wall, commemorating the establishment of Israeli control over the city after the 1967 six-day war.Japan, the 2023 G7 summit opens in HiroshimaECB board member Isabel Schnabel speaks at the Conference on Financial Stability and Monetary Policy in honour of Charles Goodhart, followed by the opening of the Charles Goodhart Library at Lincoln’s Inn Fields in London.SaturdayUS, FT Weekend Festival US begins in WashingtonSundayGreece, parliamentary electionsJapan, G7 summit concludes More

BUENOS AIRES (Reuters) -Argentina’s government announced a package of measures to rein in soaring inflation and support the wobbly peso currency on Sunday, including rate adjustments, more interventions in the exchange market and expedited deals with creditors.    The measures include an interest rate hike by the central bank, the economy ministry said in a statement. The ministry did not elaborate, but an official source told Reuters the hike would be 600 basis points, bringing the rate up to 97%.The rate hike will take effect Monday, the source added.The South American nation is battling to bring down inflation that hit 109% on an annual basis in April. It also faces tumbling confidence in the peso and dwindling foreign currency reserves that are threatening the government’s finances.    The central bank will also increase its intervention in the foreign-exchange market and double down on its currency devaluation plan, the ministry said.    An agreement with the International Monetary Fund to dole out funds to the cash-strapped nation will be sped up as well, the ministry added.    More measures are set to be announced in coming days, according to the ministry.     President Alberto Fernandez’s government is looking to bring the economic situation under control as elections near, with opinion polls showing flagging support for the ruling Peronist party. More