CPI +0.2% vs +0.4% m/m expectedPrior +0.7%CPI +2.8% vs +3.0% y/y expectedPrior +2.8%Core CPI +0.3% vs +0.4% m/m expectedPrior +0.7%Core CPI +2.6% vs +2.7% y/y expectedPrior +2.5%More to come.. This article was written by Justin Low at investinglive.com.

We support and are ready to contribute to US-Iran deal implementationThe right of transit passage through the Strait of Hormuz without restrictions is vital for global tradeWe support the immediate robust ceasefire in LebanonTo commit to reduce dependence on Strait of HormuzBesides that, they also make some comments regarding Russia:We stand united in unwavering support for UkraineAgrees to increase pressure on Russia's economyTo increase delivery of air defense capabilities, additional military systems to UkraineThis is the right moment to proceed with additional measures on RussiaThe comments are pretty much as you would expect. A lot of politicking but no real sense of action to really change things in the geopolitical scene in both the Middle East and Russia-Ukraine.Carry on as you will. This article was written by Justin Low at investinglive.com.

There aren't any major expiries to take note of on the day, with the full list seen below.The dollar continues to see more pushing and pulling on the week, as traders continue to digest the US-Iran framework agreement. The final details are yet to be confirmed, although we do have an idea on how it should look like.Come what may, it all depends on the Strait of Hormuz. And the broader market reaction so far has not really synced up with oil prices just yet; vice versa.The greenback is still somewhat steadier since last week, with a more tepid market mood awaiting the Fed later today. US stocks retreated yesterday on likely profit-taking activity, so that is keeping markets on edge before we get to the FOMC meeting decision and the US-Iran deal signing on Friday.There will be bigger fish to fry tomorrow on the expiries board with a particularly large one for EUR/USD at the 1.1500 level, roughly €11 billion. Adding to that will be a host of large expiries also running through from 1.1600 to 1.1655, so just take note of that.For today, the expiries will have a rather muted impact given the insignificance of the levels and sizes.For more information on how to use this data, you may refer to this post here. This article was written by Justin Low at investinglive.com.

While the US and Iran looks to try and finalise the text and terms of their framework agreement for a ceasefire, markets will have to divert their attention at least for a day. The Fed game is back in town and that will keep things interesting, especially with the latest developments in the Middle East.No change to the Fed funds rate is expected and the central bank is not expected to signal a material change in monetary policy stance.However, this will be Kevin Warsh's first meeting as Fed chair. So, all eyes will be on his views and how he wants to lay out his agenda in pushing for a Fed "reform" in the name of the Trump administration.It is expected that he will take on a more dovish view on inflation. But if you're expecting him to be explicit in linking that to future policy decisions, then you might end up being disappointed today. It is not likely that the Fed or Warsh himself will offer up any explicit forward guidance despite the angled approach he will be taking.As such, the rate decision and statement may not offer much of anything at all today. It will all be on Warsh's press conference instead.With the overall balance of the Fed arguably leaning slightly more hawkish amid US-Iran developments, Warsh will likely want to tip the scales back to the other side in setting the tone for his tenure.He will likely brush off the energy price shock as transitory, as he will with any lingering questions about tariffs inflation. And at the same time, it will be easy for him to keep arguing the point that AI will ultimately be disinflationary to the economy as well.So, he has quite a few avenues to work with in making his case.While very much expected, markets could still lean into his comments with more caution. That especially as traders are taking on the view that the Fed's next move is most likely a rate hike. By year-end, traders are pricing in ~20 bps of rate hikes currently.As such, there is room to pull back on that despite the fact that headline inflation has hit 4%. But given the figure, it would be quite careless for Warsh to oversell his agenda today. That especially as things could look to get worse before they get better on the inflation front.And what more with the labour market also continuing to keep firmer, as we saw with the hot US jobs report earlier this month here. This article was written by Justin Low at investinglive.com.

PBOC governor Pan Gongsheng signals slower credit growth and offshore FX pushChina to issue CNY 300bln bonds to boost bank capital as local debt tackledGoldman holds TTF gas forecasts, flags upside risk and delayed LNG recoveryChina financial regulator vows to tackle property, local debt and small bank risksUS Defense Production Act floated to force US insurer to cover Hormuz passage, Navy escortPBOC sets USD/ CNY mid-point today at 6.8096 (vs. estimate at 6.7569)Japan exports beat forecasts in May at fastest pace since late 2022Singapore May exports surge 38.4%, biggest jump in 20 years on AI demandJapan April core machinery orders surge, exports beat also"OpenAI burned $3.7 billion in first quarter of 2026"One more ECB hike seen in September before rates plateau through 2027Japan business sentiment rises in June on semiconductor demand, Reuters TankanChinese export flood puts EU tariff wall firmly on G7 agenda in FranceNew Zealand Q1 current account deficit narrows sharply on quarterly basisUS-Iran deal: where things stand and what comes nextYen stays weak after BoJ hike as analysts eye intervention riskNew Zealand consumer confidence drops to lowest since 2023, survey showsinvestingLive Americas market news wrap: Oil continues to fall in the lead-up to the FOMCOil: Private inventory survey shows a headline crude oil draw much greater than expectedRBA holds rates at 4.35%, signals further hikes still possible - recapBroader US indices close near lows. Dow industrial average closes higher.Summary:US weighing naval escorts and insurance mandates to unblock nearly 500 stranded tankers at Hormuz despite MOU signing; oil prices lower on supply return expectationsNew Zealand consumer confidence hit a two-year low of 80.4 in Q2; Q1 current account deficit narrowed sharply to NZ$1.008B from NZ$5.984B priorJapan Reuters Tankan: manufacturers +13 from +8, non-manufacturers +32 from +29; Nikkei clawed back losses to print a fresh all-time high near 70,000Singapore NODX surged 38.4% in May, a 20-year high, on AI electronics demand; US 12.5% tariff proposal clouds the outlookChina vice premier announced CNY 300bln special bond issue to recapitalise banks and pledged vigorous local government debt resolution; PBOC governor Pan Gongsheng signalled credit growth will not return to its previous pace and laid groundwork for further yuan internationalisationOpenAI burned through $3.7bln in Q1 2026, more than half its $5.7bln in revenue, per Reuters citing The Information; confidential IPO prospectus filed last week with a suspected September debutFX markets subdued ahead of the FOMC; Chinese equities lagged with the Hang Seng -0.7% and Shanghai Comp -0.2% as auto and aluminium names weighed and markets shrugged off reports the US delayed blacklisting DeepSeek and over 100 Chinese firmsMarkets drifted towards the North American session in a holding pattern, with the Federal Open Market Committee decision the dominant event risk and traders reluctant to extend positions ahead of new Fed Chair Kevin Warsh's first major policy test at the podium.The Hormuz supply picture remained the key macro overhang for energy markets. Oil prices traded lower as the US-Iran interim peace deal continued to price in a gradual return of supply, though the physical reality remains complicated: nearly 500 vessels including 220 oil tankers are sitting anchored outside the strait, unable to move while insurance markets remain effectively closed to Hormuz transits. The Trump administration is now weighing fee-based naval escorts and potential use of the Defense Production Act to compel US insurers to provide coverage, with the White House under pressure to translate the MOU into actual barrel flows.Out of the Asia-Pacific session, the data run was broadly constructive. Japan's Reuters Tankan showed two consecutive months of improving manufacturer sentiment, Singapore delivered its strongest export print in two decades on AI-driven chip demand, and New Zealand's current account deficit narrowed sharply on a quarterly basis. The softer note came from New Zealand consumer confidence, which fell to its lowest reading since 2023 as war-related fuel costs and borrowing pressures bit into household sentiment.China generated significant headline flow. The vice premier's CNY 300 billion special bond announcement to recapitalise financial institutions, paired with a pledge to vigorously resolve local government debt, represented the most concrete fiscal commitment in some time. PBOC governor Pan Gongsheng followed with a frank assessment that sustaining China's previous pace of credit growth is neither achievable nor desirable, while also advancing the groundwork for broader yuan internationalisation through new offshore FX and bond market steps in Shanghai.In equities, Japan's Nikkei 225 was the standout, taking back early losses to print a fresh all-time high. Chinese markets lagged, with the Hang Seng off 0.7% and the Shanghai Composite down 0.2%. Report that the US had delayed blacklisting DeepSeek and over 100 Chinese firms failed to lift sentiment.Away from macro, OpenAI's finances came into focus after Reuters, citing The Information, reported the company burned through $3.7 billion in the first quarter of 2026, more than half its $5.7 billion in revenue. The disclosure follows last week's filing of a confidential IPO prospectus, with a market debut suspected for September. This article was written by Eamonn Sheridan at investinglive.com.

Pan Gongsheng's explicit statement that maintaining China's previous credit growth pace is both difficult and unnecessary is the most market-significant line in the release, effectively signalling a structural downshift in the credit impulse that has historically driven Chinese and global commodity demand cycles. Bond markets may interpret the comment as reducing the likelihood of aggressive monetary easing, while equity investors in credit-sensitive sectors should note the implied ceiling on stimulus ambition. The authorisation of six banks to conduct offshore FX transactions in the Shanghai Free Trade Zone, combined with the push into free trade zone offshore bonds, represents a tangible step in yuan internationalisation that could gradually affect offshore CNH liquidity and pricing dynamics. The planned overnight reverse repo instrument adds a new tool at the short end of the curve, with implications for money market rates and interbank funding conditions.--- PBOC governor Pan Gongsheng said China's previous pace of credit growth is difficult and unnecessary to sustain, while authorising six banks for offshore FX in Shanghai and flagging new short-rate tools. Summary:Pan Gongsheng said it would be difficult and unnecessary for China's credit growth to maintain its previous pace, a significant signal on the trajectory of monetary stimulusSix banks have been authorised to conduct offshore foreign exchange transactions in the Shanghai Free Trade Zone as Beijing advances its offshore financial market ambitionsThe PBOC will prudently advance offshore financial businesses including free trade zone offshore bonds, and accelerate broader financial market developmentAn overnight reverse repo instrument will be added at an appropriate time, alongside improvements to the mechanism for regulating short-term interest rates People's Bank of China governor Pan Gongsheng signalled a structural moderation in China's credit trajectory on Tuesday, saying it would be both difficult and unnecessary for credit growth to sustain the pace seen in previous cycles, in comments that carry significant implications for domestic monetary policy and global demand expectations.The remarks represent one of the clearest official acknowledgements that the era of debt-driven Chinese growth is being deliberately wound back rather than simply paused. For markets long accustomed to reading Chinese credit data as a leading indicator of commodity and industrial demand, the governor's framing sets a lower baseline for what to expect from future stimulus cycles, even as Beijing deploys targeted fiscal tools such as the CNY 300 billion bank recapitalisation bond announced earlier in the session.On the operational side, Pan outlined several concrete steps to deepen China's financial markets and expand the international role of the yuan. Six banks have been authorised to conduct offshore foreign exchange transactions within the Shanghai Free Trade Zone, a tangible advance in Beijing's long-running effort to build Shanghai into a genuinely international financial centre. The PBOC will also move prudently into offshore financial instruments including free trade zone offshore bonds, broadening the yuan-denominated asset base available to international investors.Pan also flagged plans to add an overnight reverse repo instrument at an appropriate time, providing the central bank with additional flexibility at the short end of the yield curve. Alongside that, the PBOC intends to improve its mechanism for regulating short-term interest rates, a reform that analysts have argued is necessary to make China's monetary transmission more efficient as the economy matures.The suite of announcements, delivered alongside the vice premier's financial stability commitments earlier in the session, reflects a coordinated effort by Beijing to address structural weaknesses in its financial system while simultaneously projecting confidence in its longer-term reform direction. This article was written by Eamonn Sheridan at investinglive.com.

The CNY 300 billion special bond announcement is the most market-concrete element of the statement and signals Beijing is moving from acknowledging bank capital stress to actively addressing it. Chinese bank stocks, particularly mid-tier and regional lenders most exposed to local government financing vehicles, may find near-term support on the recapitalisation signal. The explicit commitment to vigorously and orderly advancing local government debt resolution, paired with the capital injection, suggests a coordinated approach to two problems that have historically been treated separately. The defiant tone on external suppression adds a geopolitical undertone that could weigh on sentiment around China-exposed assets if read as signalling an escalatory posture, though markets will likely focus on the fiscal stimulus dimension first.--- China's vice premier pledged to issue CNY 300 billion in special bonds to recapitalise financial institutions and vigorously advance local government debt resolution, alongside plans to open the financial sector further.Summary:China will issue CNY 300 billion in special bonds to replenish the capital of financial institutions, the vice premier announcedBeijing pledged to vigorously and orderly advance the resolution of local government debt, one of the most persistent pressure points in China's financial systemAdditional commitments included stepping up financial supervision, further opening the financial sector, and establishing an offshore financial market system in ShanghaiThe vice premier said China will never compromise or back down in the face of external suppression, and will safeguard national financial security in accordance with lawAccelerating the development of marine insurance business was also flagged, potentially relevant to shipping recovery in the wake of the Hormuz disruption China's vice premier has announced a CNY 300 billion special bond issuance to recapitalise financial institutions and pledged a vigorous push to resolve local government debt, in the most direct official acknowledgement yet that Beijing is prepared to deploy substantial fiscal resources to stabilise its financial system.The bond announcement addresses a pressure point that regulators and analysts have flagged repeatedly: Chinese banks, particularly smaller regional lenders with heavy exposure to local government financing vehicles, have faced mounting capital adequacy concerns as the property sector downturn and local government debt stress have eroded asset quality. The special bond mechanism channels central government resources into the banking system without requiring institutions to raise capital from markets that remain wary of the sector's underlying risks.The commitment to vigorously and orderly advance local government debt resolution signals an acceleration of a process that has moved unevenly since Beijing first acknowledged the scale of the problem. The pairing of a capital injection with a debt resolution pledge is significant: it suggests policymakers are trying to address both sides of a feedback loop in which local government default risk weakens the banks holding that debt, which in turn limits the financial system's capacity to support broader economic activity.Beyond the two headline measures, the vice premier outlined a broader financial agenda. Further opening of the financial sector was pledged alongside plans to establish an offshore financial market system in Shanghai, a long-discussed ambition that would expand the city's role as an international financial centre. Accelerating the development of marine insurance business was also flagged, a detail that carries additional resonance given the ongoing challenges in restoring normal shipping flows through the Strait of Hormuz.The vice premier also struck a combative note on external pressure, stating China would never compromise or back down in the face of suppression, a signal directed at trading partners and geopolitical rivals rather than domestic audiences. This article was written by Eamonn Sheridan at investinglive.com.

The marginal delay to LNG normalisation, pushed from end-June to end-July, is a small but meaningful signal that the physical market is not clearing as quickly as hoped following the MOU signing. The Hormuz tail risk is the most market-sensitive element of the note: a move above 100 EUR/MWh this winter would represent more than a doubling of Goldman's 2H26 base case and would have severe knock-on effects for European industrial demand, power prices and inflation. That scenario remains contingent on a sustained blockade resumption, which is not Goldman's central case, but the explicit quantification of it will anchor trader thinking on the upside. The steep descent in Goldman's 2028-29 forecasts to 19-16 EUR/MWh reflects confidence that LNG supply additions will eventually overwhelm the current tightness, keeping the long end of the gas curve under pressure.--- Goldman Sachs held its TTF gas forecasts near unchanged at 41/30 EUR/MWh for 2H26/2027, pushed LNG normalisation to end-July, and warned prices could exceed 100 EUR/MWh this winter if Hormuz stays blocked. Summary:Goldman Sachs maintained its 2H26 TTF gas price forecast at 41 EUR/MWh and its 2027 forecast at 30 EUR/MWh, marginally lower than prior estimates of 42/30 EUR/MWhLNG flow normalisation is now expected by end-July, a month later than the bank's previous end-June assumptionRisks to the 2026-27 price outlook remain skewed to the upsideIf the Hormuz blockade were to largely continue, Goldman estimates TTF would need to rise above 100 EUR/MWh this winter to price out competing Asian LNG demandThe bank maintains a bearish 2028-29 TTF view at 19-16 EUR/MWh, with risks to that period skewed to the downside Goldman Sachs has held its European natural gas price forecasts largely steady while pushing back its timeline for LNG market normalisation by one month, and flagged that a resumption of the Hormuz blockade could drive TTF prices above 100 EUR/MWh this winter.The bank kept its second-half 2026 TTF forecast at 41 EUR/MWh, down only marginally from a prior estimate of 42 EUR/MWh, and maintained its 2027 average forecast at 30 EUR/MWh. Goldman said risks to both years remain skewed to the upside, reflecting the fragility of the current geopolitical settlement and the pace at which LNG flows are returning to the market.On that last point, Goldman revised its normalisation assumption from end-June to end-July, a modest but telling shift that suggests the physical LNG market is taking longer to recover from the Hormuz disruption than the bank had initially projected. The delay reflects lingering hesitancy among shipowners and insurers to resume normal routing, a dynamic consistent with reports of nearly 500 vessels remaining anchored outside the strait despite the US-Iran memorandum of understanding.The most striking element of the note was Goldman's quantification of the downside scenario. Should the Hormuz blockade largely continue rather than ease, the bank estimates TTF would need to trade above 100 EUR/MWh this winter to generate enough demand destruction in Asia to rebalance the European market. At more than double the base case, such a level would represent a severe energy shock for European consumers and industry heading into the heating season.Beyond the near term, Goldman maintained a distinctly bearish view on the gas market from 2028 onward, forecasting TTF at 19 EUR/MWh in 2028 and 16 EUR/MWh in 2029, with risks to those years skewed to the downside. The bank's long-run bearishness reflects expectations that a wave of new LNG supply capacity will come online and progressively erode the tightness that has characterised the market since the 2022 energy crisis. This article was written by Eamonn Sheridan at investinglive.com.

The breadth of the regulator's statements, spanning real estate, local government debt, small financial institutions and illegal activity in a single release, signals Beijing remains acutely aware of the interlocking vulnerabilities in its financial system. Explicit mention of real estate and local government debt in the same breath as systemic risk prevention will be read as an acknowledgement that neither problem has been resolved, keeping pressure on Chinese bank stocks and property sector credit. The pledge to guide capital toward emerging and future industries suggests a continued policy tilt away from the old-economy sectors that have dominated Chinese finance for decades, with implications for sector allocation within China-exposed portfolios.---Be good to tackle indeed:China house prices May 2026 -3.5% y/y (prior -3.5%)--- China's financial regulator pledged to prevent systemic risks, resolve real estate and local government debt exposures, and crack down on illegal activity and disorderly competition in the financial sector. Summary:The regulator pledged to prevent systemic financial risks and resolve exposures in real estate and local government debt, two of the most persistent stress points in China's financial systemSmall financial institutions were flagged twice: the regulator committed to preventing risks from smaller lenders while also pledging to steadily improve their qualityA crackdown on illegal financial activities and disorderly competition was announced alongside pledges to step up regulatory cooperation in emerging areasThe regulator said it will guide financial resources toward emerging and future industries, reinforcing Beijing's broader policy push to reorient capital away from legacy sectors China's top financial regulator issued a broad set of policy commitments on Tuesday, pledging to contain systemic risk, address longstanding vulnerabilities in real estate and local government finance, and strengthen oversight of smaller financial institutions, while directing capital toward emerging industries.The National Financial Regulatory Administration set out a wide-ranging agenda that touched on virtually every pressure point in the Chinese financial system. Real estate and local government debt were explicitly named as risk areas requiring resolution, a candid acknowledgement of two problems that have weighed on investor confidence in Chinese financial markets for several years and have repeatedly required policy intervention to prevent broader contagion.Small financial institutions featured prominently in the statement, with the regulator committing both to preventing risks emanating from that segment of the sector and to improving the overall quality of smaller lenders. The dual framing reflects the challenge Beijing faces: smaller banks remain important conduits for local credit but carry disproportionate asset quality risk relative to the large state-owned institutions that dominate the system.The regulator also pledged to crack down on illegal financial activities and disorderly competition, language that signals continued scrutiny of behaviour in lending, wealth management and fintech that falls outside or on the edges of official rules. Regulatory cooperation in emerging areas was flagged as a priority, pointing to growing attention on newer financial products and platforms that have expanded faster than oversight frameworks.On the capital allocation side, the regulator said it would guide financial resources toward emerging and future industries, consistent with Beijing's broader industrial policy ambitions and its push to reduce the economy's reliance on property and infrastructure investment as growth drivers.The statement did not include specific targets or timelines, but its scope and the simultaneous release of multiple headlines underscored the regulatory establishment's intent to signal active management of financial stability risks at a sensitive moment for the Chinese economy. This article was written by Eamonn Sheridan at investinglive.com.

The bottleneck of nearly 500 vessels, including 220 oil tankers, sitting outside Hormuz is the key reason oil prices remain elevated above pre-war levels despite the MOU signing, and any credible insurance or escort solution would accelerate the return of suppressed supply to market. A fee-based naval escort scheme, if enacted, would add a new cost layer to Hormuz transits that could be partially passed through to freight rates and ultimately crude differentials. The parallel push to draw European navies into Gulf patrolling introduces a geopolitical dimension that could affect burden-sharing dynamics among allies ahead of the G7. Markets will watch whether the Defense Production Act insurance option, described as being taken more seriously than the escort fee concept, gains traction as the more structurally durable fix.--- The MOU opened Hormuz on paper; getting ships to actually move through it is proving considerably harder.Summary: Source: PoliticoTrump administration officials are discussing a fee-based naval escort scheme to encourage tanker owners to resume Hormuz transits, with President Trump and chief of staff Susie Wiles directing staff to find solutionsNearly 500 vessels including 220 oil tankers remain anchored in the Persian Gulf outside Hormuz, unwilling to transit while insurance coverage remains effectively void for the waterwayThe Defense Production Act is being considered to compel US-based insurers to offer coverage for Hormuz passage, described as an option being taken more seriously than the escort fee conceptThe US previously offered $20 billion in political risk insurance in March, but the scheme attracted few takers as owners were unwilling to risk physical assets in active conflict watersThe fee-based escort discussions are also a negotiating tactic timed to the G7 summit in France, aimed at pressuring European allies to take on a greater share of Gulf maritime security responsibilityOil prices have fallen to around $75 a barrel since the MOU was signed but remain above pre-war levels, with the tanker logjam the principal obstacle to a full normalisation of supply The Trump administration is actively working through options to restart tanker traffic through the Strait of Hormuz, including a fee-based naval escort programme and potential use of the Defense Production Act to compel US insurers to cover vessel transits, according to people familiar with the discussions.Despite the memorandum of understanding signed between Washington and Tehran, which nominally reopens the strait to commercial shipping, close to 500 vessels including 220 oil tankers remain anchored in the Persian Gulf unwilling to move. The obstacle is insurance: Iran's campaign of missile, drone and small boat attacks on shipping during the conflict rendered virtually every Hormuz transit a violation of standard marine insurance terms, and underwriters have not yet moved to restore coverage.President Trump and White House chief of staff Susie Wiles have directed officials to find a workable solution, with the discussions so far centring on ways to convince the insurance industry to re-engage. One concept under discussion is a paid expedited passage programme, potentially with US naval ships accompanying tankers through the chokepoint, described by one person familiar with the talks as a VIP pass model. The White House confirmed it expects shipping flows to normalise but pushed back on the specifics, attributing anonymously sourced details to baseless speculation.The option attracting more serious internal consideration is invoking the Defense Production Act to require US-based insurers to provide Hormuz coverage, a more direct intervention that would bypass the commercial underwriting impasse without relying on shipowners voluntarily paying escort fees.The escort fee discussions also carry a diplomatic dimension. Former administration officials said the concept is partly designed to pressure European allies at the G7 in France to contribute naval assets to Gulf security, reducing the burden on the US and creating additional deterrence against Iran reverting to blockade tactics if the broader peace talks break down.Oil has fallen to around $75 a barrel since the MOU was signed but remains above pre-war levels, with the tanker backlog the principal constraint on a full supply recovery. This article was written by Eamonn Sheridan at investinglive.com.

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. More here.Injects 420.3bn yuan via 7-day reverse repos in open market operates today. Unchanged rate of 1.4%. This article was written by Eamonn Sheridan at investinglive.com.

The ninth consecutive month of export growth reinforces the case for the BoJ to continue its gradual tightening path, with semiconductor and AI-related demand providing a durable demand floor that is proving resistant to geopolitical disruption. The sharper-than-forecast narrowing in the trade deficit, at 378.7 billion yen versus an expected 564.6 billion, will offer modest yen support at the margin, though the currency remained little changed following the release. The 28.5% plunge in crude oil import values reflects the Hormuz disruption rather than demand weakness, and a reopening of the strait under the US-Iran framework could see energy import costs normalise over coming months, which would further compress the deficit. Middle East export exposure remains a drag, with shipments to the region down 32%.--- Japan's exports rose 17% in May, the fastest pace since late 2022, with semiconductors surging 61.2% on AI demand, while the trade deficit narrowed to 378.7 billion yen against a forecast 564.6 billion. (200 chars)Summary:Exports rose 17% year-on-year in May, beating the Reuters poll forecast of 16.2% and marking the ninth consecutive month of growth, the fastest pace since November 2022Semiconductor exports surged 61.2% in value terms, driven by AI and data centre investment, while car exports rose 16.4%Shipments to China climbed 17.9% and to the US rose 12.5%; exports to the Middle East fell 32% due to the Iran warImports rose 12.5%, below the 12.8% forecast, with crude oil import values plunging 28.5% as Hormuz closure drove prices higher on reduced volumesThe trade deficit came in at 378.7 billion yen, well below the forecast deficit of 564.6 billion yenThe data follows the BoJ's 25 basis point rate rise to 1.0% on Tuesday, with the Nikkei down 0.5% and the yen little changed at 160.4 per dollar after the release Japan's exports extended their winning streak to nine consecutive months in May, rising 17% from a year earlier at the fastest pace since November 2022, as surging demand for semiconductors and AI-related technology more than offset the disruption caused by the US-Iran war in the Middle East.The result beat a Reuters poll forecast of 16.2% growth and accelerated from the 14.8% recorded in April. Semiconductor exports were the standout, jumping 61.2% in value terms as sustained global investment in artificial intelligence infrastructure and data centres drove demand for chip-making equipment and electronic components. Car exports also contributed, rising 16.4% on the year.By destination, China remained Japan's largest trading partner and recorded a 17.9% increase in shipments, while exports to the United States, the second-largest market, rose 12.5%. Exports to the Middle East fell 32% as the conflict disrupted trade routes and reduced activity across the region.Imports grew 12.5%, coming in just below the 12.8% forecast. The headline figure masked a dramatic shift in the energy component: crude oil import values plunged 28.5%, not because Japan reduced its energy dependence but because the closure of the Strait of Hormuz sharply curtailed volumes while simultaneously driving prices higher. Japan has sought to diversify procurement toward non-Middle Eastern suppliers, including the United States, but those efforts have not fully replaced lost supply.The resulting trade deficit narrowed to 378.7 billion yen, considerably tighter than the forecast 564.6 billion yen shortfall. A potential reopening of Hormuz under the US-Iran framework agreed in principle over the weekend could further ease import costs in coming months.The data lands a day after the Bank of Japan raised its policy rate by 25 basis points to 1.0%, the highest level in over three decades. A weak yen, currently trading around 160.4 per dollar, continues to flatter export values while adding to imported inflation pressures domestically. This article was written by Eamonn Sheridan at investinglive.com.

The scale of the beat, nearly 7 percentage points above consensus, underscores how concentrated Singapore's export boom is in AI-driven electronics, with integrated circuits, disk media and PCs doing the heavy lifting. The 303% surge in electronics exports to the US and 218% to Taiwan highlights the semiconductor supply chain intensity of the move and raises questions about sustainability if US tariff proposals proceed. A 12.5% additional levy on Singaporean goods, if enacted, could affect around a third of the city-state's direct US exports, introducing a meaningful headwind to what is otherwise the strongest export print in two decades. The SGD and Singapore equities with electronics exposure will be sensitive to any escalation in the tariff dispute. Singapore's non-oil domestic exports surged 38.4% in Mayexpected +31.1%. prior +24.5%the largest annual rise in 20 years, driven by AI-related electronics demand, though a proposed US 12.5% tariff threatens a third of direct US shipments. Summary:Singapore's non-oil domestic exports rose 38.4% year-on-year in May, well above the Reuters poll median of 31.1% and the largest annual increase in at least 20 yearsElectronics drove the gain, with AI-related demand boosting integrated circuits, disk media products and PCsExports of electronics to the US surged 303% annually, while shipments to Taiwan rose 218.6%; exports to Indonesia declinedThe US Trade Representative in June accused Singapore among 60 countries of inadequate enforcement against forced labour trade and proposed additional tariffs of 12.5% on Singaporean exportsSingapore's trade ministry denied the forced labour assertion and noted roughly a third of the country's direct US exports could be affected if the proposed tariffs proceed Singapore's non-oil domestic exports posted their largest annual increase in at least two decades in May, surging 38.4% from a year earlier as artificial intelligence-driven demand for semiconductors and related electronics propelled shipments well beyond market expectations.The result exceeded the median forecast of 31.1% growth in a Reuters poll by a considerable margin, with Enterprise Singapore data showing electronics at the centre of the advance. Integrated circuits, disk media products and personal computers all contributed, reflecting sustained capital investment in AI infrastructure by technology firms in Singapore's key export markets.The destination breakdown highlighted the concentration of demand. Electronics exports to the United States climbed 303% on an annual basis, while shipments to Taiwan, a critical node in the global semiconductor supply chain, rose 218.6%. Exports to China also increased, while shipments to Indonesia declined from year-earlier levels.The record reading arrives against a complicated trade backdrop. In June, the US Trade Representative identified Singapore among 60 countries it accused of insufficient action against trade in goods produced with forced labour, and proposed additional tariffs of 12.5% on Singaporean exports to the United States. Singapore's trade ministry rejected the characterisation, stating the city-state actively enforces against such practices domestically. It nonetheless acknowledged that approximately a third of Singapore's direct US exports could be exposed to the proposed levies if they are enacted.The juxtaposition of a historic export surge and a fresh tariff threat captures the tension facing Singapore's trade-dependent economy. AI demand has delivered an exceptional windfall for the electronics sector, but the US remains both its most valuable destination market and the source of its most immediate policy risk. How Washington proceeds on the tariff proposal will be closely watched by exporters and policymakers alike. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

Japan April core machinery orders +8.7% m/m exp +0.9%, prev -9.4%+15.6% y/y exp +9.3%, prev +5.9%Japan May trade balance -¥378.7B exp -¥564.6B, prev +¥301.9BJapan May exports +17.0% y/y exp +16.2%, prev +14.8%To EU +14.5% y/y — to Asia +19.5% y/y — to US +12.5% y/y — to China +17.9% y/yJapan May imports +12.5% y/y exp +12.8%, prev +9.7%I'll have more to come on this separately ... here we are, ADDED: Japan exports beat forecasts in May at fastest pace since late 2022 This article was written by Eamonn Sheridan at investinglive.com.

More:"OpenAI burned through $3.7 billion in the first quarter of 2026, more than half its $5.7 billion in revenue, "Reuters cite The Information. Lat week:OpenAI files confidential IPO prospectus, suspected September market debut This article was written by Eamonn Sheridan at investinglive.com.

The ECB's first rate increase since 2023 was largely anticipated, but the upward revision to inflation forecasts and the explicit signal of a further September hike removes any residual dovish interpretation of the decision. European sovereign spreads and rate-sensitive sectors face renewed pressure as the market adjusts to a higher-for-longer plateau scenario through 2027. The euro may find near-term support on rate differentials, though the simultaneous downgrade to growth forecasts limits the currency's upside. With wage growth expected to remain contained and the price-wage spiral seen as unlikely, the ECB appears to be threading a narrow path between taming energy-driven inflation and avoiding a deeper growth shock.--- The ECB raised its key rate 25bp to 2.25% and revised up its 2026 inflation forecast to 3.0%, with BNP Paribas expecting one further hike in September before rates plateau through 2027. Summary:The ECB raised its benchmark rate by 25 basis points to 2.25%, its first increase since 2023, as eurozone inflation rose to 3.2% in May from 3.0% in April driven by the Middle East conflictThe ECB revised its 2026 inflation forecast up to 3.0% from 2.6% and its 2027 forecast to 2.3% from 2.0%, while cutting its growth outlook to 0.8% this year and 1.2% next yearForward-looking price indicators including European Commission surveys and PMIs confirm the energy shock is transmitting gradually to other sectors, though the pass-through remains less severe than in 2022A price-wage spiral is considered unlikely for now, with compensation per employee growth expected to slow to 3.2% in 2026 and stabilise at that level through 2027-2028BNP Paribas maintains a forecast of one additional 25 basis point hike, most likely in September, followed by a rate plateau in 2027 The European Central Bank raised its key interest rate by 25 basis points to 2.25% at its latest meeting, marking its first hike since 2023 and signalling that the inflationary fallout from the Middle East conflict has shifted the policy calculus decisively back toward tightening.Eurozone inflation accelerated to 3.2% in May from 3.0% in April, with the ECB attributing the move to a more pronounced impact of the war on energy and related costs. The bank revised its inflation forecasts upward across the projection horizon, now expecting the rate to average 3.0% in 2026, compared with its March estimate of 2.6%, and 2.3% in 2027, up from 2.0%. Growth forecasts were trimmed in tandem, with the ECB now projecting eurozone expansion of 0.8% this year and 1.2% next year, against prior estimates of 0.9% and 1.3% respectively.BNP Paribas said the outcome was consistent with its existing scenario and that one further rate increase of 25 basis points remains its central call, with September the most likely timing. The bank expects rates to plateau through 2027 thereafter.On the inflation dynamics driving the ECB's posture, BNP Paribas noted that forward-looking price indicators, including European Commission surveys and purchasing managers indices, confirm the energy shock is gradually feeding into other sectors of the economy. However, the bank stressed that the transmission remains considerably less intense than the episode seen in 2022 and has so far only marginally affected finished goods prices.Critically, BNP Paribas assessed the risk of a price-wage spiral as unlikely in the current cycle. The ECB itself projects compensation per employee growth to slow to 3.2% in 2026 and to stabilise at that level through 2027 and 2028, a trajectory the bank considers compatible with its 2% inflation target over the medium term. That contained wage outlook is a key reason BNP Paribas sees the tightening cycle ending after one more move rather than extending into a more aggressive sequence. This article was written by Eamonn Sheridan at investinglive.com.

Two consecutive months of improving manufacturer sentiment adds to the case for the BoJ to proceed with its projected tightening path, with chip-sector strength providing a demand-side cushion against broader geopolitical headwinds. The chemicals and electronics sub-indices leading the gains suggest semiconductor capital expenditure cycles remain intact, a positive signal for regional supply chains. However, the sharp expected deterioration in transport machinery sentiment to minus-13 in September, from plus-13 now, flags that automakers remain exposed to supply chain disruption risks that a US-Iran framework alone may not quickly resolve. Non-manufacturers' forward guidance dropping to plus-19 from plus-32 introduces some caution on the domestic services outlook. Japan's Reuters Tankan showed manufacturers' sentiment rose to +13 in June from +8, and non-manufacturers to +32 from +29, driven by semiconductor demand, though both sectors see softer outlooks ahead.Summary: Source: Reuters Tankan survey, June 2026The manufacturers' sentiment index rose to +13 in June from +8 in May, a second consecutive monthly improvement, led by chemicals rising to +20 from +6 on semiconductor-related demandNon-manufacturers' sentiment climbed to +32 from +29, with real estate and construction driving the gainManufacturers expect sentiment to hold at +13 in September; non-manufacturers project a drop to +19, citing geopolitical risks and supply chain challengesTransport machinery, which includes Japan's major automakers, forecasts a steep fall to minus-13 in September from plus-13, reflecting ongoing sourcing difficultiesThe survey was conducted June 3-12 across 215 responding firms out of 490 polledA potential formalisation of the US-Iran framework could support sentiment, but supply chain normalisation is expected to take time Japanese business confidence improved across both manufacturing and services in June, with semiconductor-related demand driving the headline gains, though forward-looking indicators point to a more cautious second half, the latest Reuters Tankan survey showed.The manufacturers' sentiment index climbed to plus-13 in June from plus-8 in May, marking a second straight month of improvement and the strongest reading in recent months. The chemicals sector led the advance, with its index jumping to plus-20 from plus-6, as firms cited resilient demand from semiconductor customers despite an uncertain geopolitical backdrop. Electronics and machinery makers reported similar conditions, with order books bolstered by chip market activity.Non-manufacturers reported sentiment of plus-32, up from plus-29 in May, with real estate and construction confidence contributing to the gain. Housing demand was described as steady despite rising input costs, with a pipeline of new projects supporting near-term activity.The Reuters Tankan is a monthly leading indicator for the Bank of Japan's quarterly Tankan business survey and is closely watched as a gauge of corporate conditions between official readings.Forward guidance was more mixed. Manufacturers expect sentiment to remain flat at plus-13 in September, suggesting the current momentum is seen as sustainable but not accelerating. Non-manufacturers were more cautious, projecting a fall to plus-19, with firms pointing to geopolitical risks and supply chain uncertainties as drags on the outlook.The sharpest divergence came from transport machinery, which encompasses Japan's major automakers. That sector's index is forecast to drop to minus-13 in September from plus-13 now, reflecting persistent difficulties in sourcing materials and ongoing disruptions to global supply chains.A resolution of the US-Iran conflict, if formalised, could provide some relief to sentiment in coming months, but analysts cautioned that normalisation of shipping and supply chains would take time even under an optimistic diplomatic scenario. This article was written by Eamonn Sheridan at investinglive.com.

A coordinated G7 move toward higher tariffs on Chinese goods would represent a significant escalation in the global trade war, with direct implications for supply chains in EVs, batteries, solar and advanced machinery. European equities with China exposure, particularly German industrials and automakers already under pressure from Chinese competition, face added downside risk if Brussels moves to broaden its tariff regime beyond current sector-specific measures. Chinese export-oriented sectors and yuan-sensitive assets could reprice on any firm summit communique. The prospect of a China-EU trade dispute layered onto existing US-China tensions introduces fresh uncertainty for commodity demand, given China's role as the world's largest buyer of industrial inputs.--- G7 leaders meeting in France are considering higher tariffs on Chinese imports as Beijing's record $1.2 trillion trade surplus redirects export pressure toward Europe, the AP reported. Summary: Source: Associated PressG7 leaders gathering in Évian-les-Bains, France have placed China's trade practices near the top of the agenda, with French officials seeking a coordinated plan to address the threat from Chinese exportsChina posted a record global trade surplus of $1.2 trillion last year despite sustained US tariffs, redirecting exports toward Europe and other open marketsChinese exports to the 27-nation EU rose 16.4% in the January-to-May period from a year earlier, deepening trade deficits across the blocThe EU currently imposes relatively low baseline tariffs on Chinese goods under WTO rules, with higher sector-specific duties including up to 35% on electric vehiclesChina now competes directly with nearly 58% of eurozone exports, up from 46% in 2000, with Chinese firms expanding from low-cost manufacturing into EVs, advanced machinery and scientific instrumentsGermany has been among the hardest hit, with its economy shrinking in 2023 and 2024 and growing just 0.2% last year, partly due to Chinese competition in its core export industries Leaders of the world's seven largest economies are weighing higher tariffs on Chinese goods as Beijing's surging exports increasingly threaten European industry, with France pushing for a coordinated response to emerge from the G7 summit in Évian-les-Bains this week.The push reflects growing alarm in Europe at what analysts have labelled China Shock 2.0, a second wave of disruption from Chinese manufacturing that is more consequential than the first. China now accounts for 16% of global goods exports, up from just 4% in 2000, and its product mix has shifted dramatically upmarket. Where the first China Shock in the early 2000s centred on low-cost textiles and electronics, the current wave encompasses electric vehicles, batteries, advanced machinery, robotics and scientific instruments, putting Chinese firms in direct competition with the industrial core of the world's richest economies.China recorded a record trade surplus of $1.2 trillion last year, even as US tariffs cut Chinese goods exports to America by 37% in the first four months of this year. The shortfall has been redirected elsewhere, with exports to the EU climbing 16.4% in the January-to-May period. France's trade deficit with China widened from $3.3 billion to $5.3 billion over a year, and Germany, once a major beneficiary of Chinese demand for its cars and machinery, now buys more from China than it sells. The German economy contracted in both 2023 and 2024 and grew only marginally last year.The EU currently applies relatively low baseline tariffs on Chinese goods under World Trade Organization rules, though it has imposed sector-specific duties of up to 35% on electric vehicles. French officials have indicated they want the summit to produce a plan that goes further, potentially including a broader tariff wall aligned more closely with the approach the United States has taken over the past eight years.Economists warn that China's domestic policies, including cheap state credit for manufacturers and a weak social safety net that encourages household saving over spending, structurally incentivise overproduction and export dependence. Without a change in that model, analysts say, the pressure on European industry will continue to build regardless of what individual governments do at the margin. The G7 summit may prove to be the moment Europe decides it has waited long enough to act. This article was written by Eamonn Sheridan at investinglive.com.

NZ Q1 current account balance (actual) -NZ$1.008B exp -NZ$0.967B, prev -NZ$5.984BNZ Q1 seasonally adjusted current account -NZ$4.552B prev -NZ$4.452BNZ year to March current account -NZ$16.3B / -3.6% of GDP.The sharp narrowing in NZ deficit will offer the RBNZ some modest comfort on external balance pressures.I'll have more to come on this separately This article was written by Eamonn Sheridan at investinglive.com.