<p class="text-align-justify">We have China president Xi Jinping up first:</p><ul><li>Had in-depth exchange of views with US president Trump today</li><li>We both believe US-China ties are the most important bilateral ties in the world</li><li>US, China should become partners, not rivals</li><li>Mutual respect is key to stable US-China ties</li><li>Should jointly promote relations between the two countries along the right path</li></ul><p>Meanwhile, US president Trump says that:</p><ul><li>We had extremely positive and constructive discussions</li><li>US-China relationship is one of the most consequential in world history</li><li>We have a chance to create a future of greater cooperation and prosperity</li></ul><p class="text-align-justify">Trump has also extended an invite to Xi to visit the US on 24 September. So, mark that down in your calendars just in case.</p><p class="text-align-justify">For now, the comments at the banquet are pretty much just an exchange of pleasantries and nothing too notable. The earlier meeting details and the outcome seem to be mostly covered by Bessent <a href="https://investinglive.com/news/china-purchases-of-soybeans-are-all-taken-care-of-says-bessent-20260514/" target="_blank" rel="follow">here</a>.</p><p class="text-align-justify">All in all, it seems that the visit is just to reaffirm stable ties between the two countries at a time of economic turbulence set out by the Middle East conflict. At the very least, markets don't have to worry about another tariffs war for the time being.</p><p class="text-align-justify">But otherwise, there's nothing much else to really take away from the happenings in Beijing today thus far.</p><p class="text-align-justify">The most interesting contrast is perhaps the focus of the commentary. The US, as per Bessent's remarks above, are mostly focusing on trade issues and business/investment ties. They want to try and get something out of their visit to show for at least.</p><p class="text-align-justify">Meanwhile, China via the foreign ministry and state media commentary outlines that Taiwan is the biggest and "most critical" issue at hand. The latter even went as far as noting down a warning by Xi that if the US meddles about with China's business in Taiwan, there will be consequences to pay.</p><p class="text-align-justify">And so far, we've seen absolutely zero commentary from the US camp on Taiwan besides Bessent pointing out that he is "confident that Trump understands the issues there". Adding that we will hear more from Trump on that in the coming days.</p> This article was written by Justin Low at investinglive.com.

<ul><li>Discussed purchases, will talk about board of trade</li><li>We are trying to balance trade out</li><li>US has a stronger position because of our trade deficit with China</li><li class="text-align-justify">Will also discuss board of investments, that will cover non-strategic and non-sensitive areas where China can invest</li><li class="text-align-justify">Think we're going to see large Boeing orders</li><li class="text-align-justify">Also talked about China buying more energy today</li><li class="text-align-justify">Thinks China will do what it can on the Strait of Hormuz</li><li class="text-align-justify">The reopening of the strait benefits China</li><li class="text-align-justify">Believes that China will work behind the scenes to the best of their capabilities</li></ul><p class="text-align-justify">On the headline remark, we've been here one too many a time. It has been an issue for more than a decade already. Anyone can still remember the Phase One trade deal? Well, that was pretty much a joke at the end of the day and I don't see any reason why this won't turn out to be the same.</p><p class="text-align-justify">China will surely offer up a couple of gestures of goodwill in stepping up agricultural purchases for a few months, before returning back to the status quo again. And in the case of soybeans, they'll be looking back to Brazil again in no time surely.</p><p class="text-align-justify">Again, whatever that the two sides are discussing here are mainly for show. They need to tell the world that they have something to show for after the meeting this week. But come what may, it's all just to maintain some sense of a cordial relationship for now after having seen things escalate last year due to the tariffs war.</p> This article was written by Justin Low at investinglive.com.

<p class="text-align-justify">New yuan loans for the month of April came in at -¥10 billion. Yes, that's another negative reading and one to follow up the supposed blip from July last year. Once is maybe a coincidence, but twice and it's starting to draw questions of whether there is an underlying problem with credit demand conditions.</p><p class="text-align-justify">That means the year-to-date figure for total new bank lending this year is ¥8.59 trillion. It marks a notable drop from the roughly ¥10 billion figure from January to April last year.</p><p class="text-align-justify">So, what does this mean?</p><p class="text-align-justify">It is quite a disappointing number, all things considered. The recent focus and policy shift by Beijing has been to do anything in order to bolster domestic demand conditions. Credit demand falling and being this subdued to start the year suggests weakening economic momentum, and that's not a good signal of how things are playing out on the ground.</p><p class="text-align-justify">If the trend continues as such, it will prompt Beijing officials to want to ease monetary policy further. So, the pressure valve is certainly being turned on right now as flagging credit conditions are dropping a big hint on household and business appetite.</p><p class="text-align-justify">What more now with the US-Iran conflict, pushing energy prices higher and also weighing on China's economy. As a reminder, China is one to also rely heavily on Iran oil imports (~15% of total) over the years. So, it's not just higher prices that are weighing.</p> This article was written by Justin Low at investinglive.com.

<ul><li class="text-align-justify">The two sides discussed ways to enhance economic cooperation</li><li class="text-align-justify">Also discussed expanding market access for US businesses into China and increasing Chinese investment</li><li class="text-align-justify">Trump, Xi highlighted need to build on progress in ending fentanyl crisis</li><li class="text-align-justify">Also talked about increasing Chinese purchases of US agricultural products</li><li class="text-align-justify">Both sides agreed that Strait of Hormuz must remain open and that Iran can never have a nuclear weapon</li></ul><p class="text-align-justify">What is interesting so far is that the US camp is touching more on trade issues and a light sprinkle on the Iran situation mostly. However, the Chinese camp is mostly emphasising on Taiwan being a very important subject at this stage. The readout from the foreign ministry earlier specifically highlighted the Taiwan matter and even Xi said that it is "the most critical" subject at the moment. Meanwhile, the White House official/readout above does not even mention that at all.</p><p class="text-align-justify">On the trade front, all China is really focusing on is highlighting the importance for stable relations and cooperation. There's no explicit mention about any further trade commitments.</p> This article was written by Justin Low at investinglive.com.

<p class="text-align-justify">Even so, headline inflation increased further by 0.4% on the month with price pressures seen more widespread. Restaurants and accommodation services saw a 1.2% increase with clothing and footwear reflected a 6.0% jump in prices. Meanwhile, transportation prices saw a 0.9% jump.</p><p class="text-align-justify">As for the annual estimate, it is all down to higher energy prices. Transportation prices surged by 6.5% compared to April last year, largely on the back of higher fuel and lubricant prices for personal vehicles.</p><p class="text-align-justify">The only bright spot is that core annual inflation is seen easing a touch to 2.8% - down from 2.9% in March.</p><p class="text-align-justify">But as the Middle East conflict drags on, expect inflation pressures to widen and spill over to core prices in due time. That especially as energy prices continue to stay higher in the weeks/months to come.</p> This article was written by Justin Low at investinglive.com.

<p>EUROPEAN SESSION</p><p>In the European session, the main highlight was the UK GDP report. The data beat expectations almost across the board, with a solid performance in March. All in all, it shows that the UK economy was faring pretty well before the US-Iran war started. </p><p>Looking ahead, we just get the Spanish Final CPI data which is not going to change anything for the ECB, so the market reaction will likely be muted.</p><p>AMERICAN SESSION</p><p>In the American session, we get the US Retail Sales and Jobless Claims data. The US Retail Sales M/M is expected at 0.5% vs 1.7% prior, while the Ex-Autos M/M figure is seen at 0.6% vs 1.9% prior. The more important Retail Control measure is expected at 0.4% vs 0.7% prior. Retail Sales is a volatile indicator and although it's a market-moving release, it rarely changes trends and most of the time the reaction is faded.</p><p>Initial Claims are expected at 205K vs 200K prior, while Continuing Claims are seen at 1780K vs 1766K prior. The Jobless Claims data has been pointing to gradual improvement in the labour market with Initial Claims hovering near cycle lows and Continuing Claims falling to the lowest level since 2024.</p><p>With a resilient labour market and inflation going in the wrong way, the Fed has little choice but to keep rates steady for longer, even though adopting a hawkish bias would be better. </p><p>CENTRAL BANK SPEAKERS</p><ul><li>09:15 GMT/05:15 ET - ECB President Lagarde (neutral - voter)</li><li>14:15 GMT/10:15 ET - Fed's Schmid (hawkish - non voter)</li><li>15:15 GMT/11:15 ET - BoE's Pill (hawkish - voter)</li><li>17:00 GMT/13:00 ET - Fed's Hammack (hawkish - voter)</li><li>21:30 GMT/17:30 ET - Fed's Barr (neutral - voter)</li><li>21:45 GMT/17:45 ET - Fed's Williams (neutral - voter)</li></ul> This article was written by Giuseppe Dellamotta at investinglive.com.

<ul><li>Prior +0.1%</li><li>GDP +1.1% vs +0.8% y/y expected</li><li>Prior +1.0%</li></ul><p class="text-align-justify">That's a solid showing by the UK economy in the first quarter of the year, helped by <a href="https://investinglive.com/news/uk-q1-preliminary-gdp-06-vs-06-qq-expected-20260514/" target="_blank" rel="follow">a strong performance in March</a> despite the challenges from rising energy prices. Services output was the biggest contributor, increasing by 0.8% in Q1 2026. That compares with the 0.2% growth in the same sector in Q4 2025. And even compared to the same quarter a year ago, services output was higher by 1.4%.</p><p class="text-align-justify">Of note, non-consumer-facing services (business-facing services) grew by 0.7%, while consumer-facing services grew by 0.8%.</p><p class="text-align-justify">Besides that, household consumption also showed a notable increase in the first quarter (+0.35%) which is a marked improvement from the final quarter of last year (+0.07%).</p><p class="text-align-justify">All in all, the report suggests that it was all fun and games for the UK economy in Q1. That as economic conditions enjoyed a period of resilience and solid performance. However, now is when the real challenge begins in having to deal with the fallout from the US-Iran conflict.</p> This article was written by Justin Low at investinglive.com.

<ul><li>Prior +0.5%; revised to +0.4%</li><li>Services output +0.3% vs -0.1% m/m expected</li><li>Prior +0.5%</li><li>Industrial output -0.2% vs -0.3% m/m expected</li><li>Prior +0.5%; revised to +0.3%</li><li>Manufacturing output +1.2% vs 0.0% m/m expected</li><li>Prior -0.1%; revised to -0.2%</li><li>Construction output +1.5% vs -0.5% m/m expected</li><li>Prior +1.0%; revised to +0.5%</li></ul><p class="text-align-justify">The UK economy braved the challenges from higher energy prices to post a strong performance in March. That largely came on the back of a better performance in the services sector, which also contributed 0.8% in terms of growth in the first quarter.</p><p class="text-align-justify">Of note, there was a widespread increase in output across the majority of subsectors in terms of services output. The breakdown can be seen below:</p><p class="text-align-justify">And even when drilling down further, consumer-facing services also posted 0.8% growth on the month. That is an improvement from a 0.1% drop in February. Of note, the largest positive contributions at the industry level came from retail trade, except of motor vehicles and motorcycles (up 0.7%) and other personal service activities (up 2.5%).</p><p class="text-align-justify">Besides that, there was added resilience in the manufacturing and construction sectors as well. So, that helped to underpin the stronger overall economic showing in March despite headwinds from the Middle East situation and surging energy prices.</p> This article was written by Justin Low at investinglive.com.

<p class="text-align-justify">This will be in observance of Ascension Day and with it being on a Thursday, we could see many people take a "bridge" holiday on Friday into the weekend as well. The holiday here is not one that is observed in Spain or Italy though, with Assumption Day (in August) being the more important celebration.</p><p class="text-align-justify">The post here is just a heads up that even with it being a holiday in some parts of the region, markets will remain opened and trading hours will continue as per usual. The Euronext (except Oslo), Xetra, and Frankfurt stock exchanges will continue to operate accordingly, albeit with likely lesser liquidity conditions.</p><p class="text-align-justify">To those celebrating, I wish you all a good break today and a wonderful weekend too if you're taking some extra time off. Have a good one.</p> This article was written by Justin Low at investinglive.com.

<p class="text-align-justify">There's not much in it so far. US president Trump and China president Xi shook hands at the Great Hall of the People in Beijing before taking turns to meet with the respective delegations from each country. And all they did was exchange some light comments before making their opening remarks so far.</p><p class="text-align-justify">As you would expect, Xi framed things in a way that stressed on the importance of US-China relations and stabilising ties between the two countries. In particular, he made reference to the Thucydides Trap moment. For the uninitiated, that's about the conflicting nature of a rising power that threatens to displace the supposed more established ruler in charge - making it a sort of destiny to be headed for war.</p><p class="text-align-justify">Xi remarks that: “Can China and the US transcend the Thucydides Trap and create a new paradigm for major power relations? Can they work together to address global challenges and inject more stability into the world?”</p><p class="text-align-justify">As for Trump, he focused his opening comments on trade as he points out that he brought the best of the best in terms of business delegation to Beijing. He was also keen to point out that he maintains a "fantastic relationship" with Xi and even reserved some praise for the China president: “You’re a great leader. I say it to everybody. Sometimes people don’t like me saying it, but I say it anyway, because it’s true."</p><p class="text-align-justify">So, what else can we expect from the summit in these two days?</p><p class="text-align-justify">There will definitely be some "deals" on trade or at least agreements for both sides to try and move past from the tariffs war last year. But again, expect all of this to be mostly for show. Sure, it will involve some goodwill gestures in the months ahead. However, don't expect any major trade breakthroughs or changes in the big picture.</p><p class="text-align-justify">The positive takeaway for markets is that at least things are not getting worse between the two major powers in a time when we already have to deal with the fallout from the Middle East conflict.</p><p class="text-align-justify">Besides that, it will be interesting to see if Trump will want to push Xi to try and do something about Iran. So, that will be one key risk factor to be wary about before the weekend comes along.</p> This article was written by Justin Low at investinglive.com.

<ul><li><a href="https://investinglive.com/news/japan-weighs-supplementary-budget-to-shield-households-from-fuel-price-surge-20260514/">Japan weighs supplementary budget to shield households from fuel price surge</a></li><li><a href="https://investinglive.com/news/xi-is-meeting-with-trump-we-should-get-some-news-in-a-few-hours-20260514/">Xi is meeting with Trump, we should get some news in a few hours</a></li><li><a href="https://investinglive.com/centralbank/chinas-offshore-yuan-cnh-trades-to-its-strongest-against-the-usd-since-february-2023-20260514/">China's offshore yuan, CNH, trades to its strongest against the USD since February 2023</a></li><li><a href="https://investinglive.com/commodities/chinese-supertanker-exits-strait-of-hormuz-after-two-months-stranded-in-gulf-20260514/">Chinese supertanker exits Strait of Hormuz after two months stranded in Gulf</a></li><li><a href="https://investinglive.com/centralbank/pboc-sets-usd-cny-reference-rate-for-today-at-68401-vs-estimate-at-67888-20260514/">PBOC sets USD/ CNY reference rate for today at 6.8401 (vs. estimate at 6.7888)</a></li><li><a href="https://investinglive.com/forex/south-korean-fin-min-says-krw-volatility-is-excessive-compared-with-economic-fundamentals-20260514/">South Korean Fin Min says KRW volatility is excessive compared with economic fundamentals</a></li><li><a href="https://investinglive.com/centralbank/japan-fx-intervention-flips-yen-from-undervalued-to-overvalued-stanchart-says-20260514/">Japan FX intervention flips yen from undervalued to overvalued, StanChart says</a></li><li><a href="https://investinglive.com/stock-market-update/ubs-and-morgan-stanley-bullish-on-chinese-stocks-amid-ai-and-resilience-story-20260513/">UBS and Morgan Stanley bullish on Chinese stocks amid AI and resilience story</a></li><li><a href="https://investinglive.com/news/uk-house-prices-fall-at-fastest-pace-since-2023-as-iran-war-hits-sentiment-20260513/">UK house prices fall at fastest pace since 2023 as Iran war hits sentiment</a></li><li><a href="https://investinglive.com/stocks/cisco-after-hours-stock-20-price-surge-heres-why-cutting-4000-jobs-20260513/">Cisco after hours stock 20% price surge - here's why (cutting ~4000 jobs)</a></li><li><a href="https://investinglive.com/stock-market-update/morgan-stanley-lifts-sp-500-target-to-8000-on-earnings-growth-story-20260513/">Morgan Stanley lifts S&amp;P 500 target to 8,000 on earnings growth story</a></li><li><a href="https://investinglive.com/commodities/hormuz-closure-drives-opec-to-slash-demand-outlook-as-opec-output-falls-174-million-bpd-20260513/">Hormuz closure drives OPEC to slash demand outlook as OPEC+ output falls 1.74 million bpd</a></li><li><a href="https://investinglive.com/commodities/uae-denies-netanyahu-held-secret-meeting-with-emirati-president-during-iran-war-20260513/">UAE denies Netanyahu held secret meeting with Emirati president during Iran war</a></li><li><a href="https://investinglive.com/news/rubio-wants-to-china-to-come-to-the-rescue-in-iran-war-20260513/">Rubio wants to China to come to the rescue in Iran war</a></li><li><a href="https://investinglive.com/centralbank/icymi-boston-feds-collins-raises-prospect-of-rate-hikes-if-inflation-broadens-20260513/">ICYMI - Boston Fed's Collins raises prospect of rate hikes if inflation broadens</a></li><li><a href="https://investinglive.com/news/investinglive-americas-fx-news-wrap-13-may-20260513/">investingLive Americas FX news wrap 13 May: PPI shocks markets, stocks recover</a></li><li><a href="https://investinglive.com/news/icymi-euro-area-gdp-weakest-in-9-quarters-jobs-slow-industry-falls-sharpest-in-2-years-20260513/">ICYMI - Euro area GDP weakest in 9 quarters, jobs slow, industry falls sharpest in 2 years</a></li><li><a href="https://investinglive.com/stocks/the-sp-and-nasdaq-indices-close-at-record-levels-the-dow-industrial-average-lags-20260513/">The S&amp;P and NASDAQ indices close at record levels. The Dow industrial average lags</a></li></ul><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">World leaders struck a conciliatory tone as the Trump-Xi summit opened in Beijing, with Chinese President Xi Jinping telling his counterpart "we should be partners, not rivals," while President Trump reflected that past difficulties between the two nations had ultimately been resolved. The high-stakes meeting, the first by a sitting U.S. president to China in nearly a decade, got underway with warmer opening exchanges than many had anticipated given the backdrop of ongoing trade tensions and the Iran conflict. </p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Currency markets drew attention as the People's Bank of China set its onshore yuan fixing at its strongest level since March 2023, with the offshore yuan following to touch its highest since February of that year, a signal Beijing may be willing to allow further appreciation as the summit gets underway. Elsewhere in major FX, moves were contained, with the dollar holding onto gains accumulated after Wednesday's stronger-than-expected U.S. PPI print.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">In equity markets, Japan's Nikkei rose for a third consecutive session to reach a record high, driven by technology sector momentum, though the broader Topix slipped. South Korean shares extended their run to a second straight positive session, with Samsung Electronics touching record levels after the country's finance minister pledged action to avert a labour strike. The KOSPI had already closed at a record high the previous day.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">In fiscal policy, Japan's government is weighing a supplementary budget to cushion households from elevated fuel costs ahead of summer, according to Kyodo News, pushing 30 and 40-year JGB yields higher on debt issuance concerns. Chief Cabinet Secretary Kihara pushed back on the reports, leaving the plan's status unclear.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">In corporate news, Cisco announced it is cutting around 4,000 jobs as part of an AI-focused restructuring, with shares surging approximately 20% in response.</p> This article was written by Eamonn Sheridan at investinglive.com.

<p>Japan's government is considering a supplementary budget to ease household fuel costs ahead of summer, Kyodo reports, sending 30- and 40-year JGB yields higher on increased debt issuance fears. </p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Summary:</p><ul class="[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3"><li class="font-claude-response-body whitespace-normal break-words pl-2">Japan's government is considering a supplementary budget aimed at reducing the burden of rising fuel costs on households ahead of the summer peak-demand season, according to Kyodo News, citing unnamed government sources</li><li class="font-claude-response-body whitespace-normal break-words pl-2">The extra spending would support households facing elevated gasoline prices and utility bills during the hottest months of the year</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Yields on 30 and 40-year Japanese government bonds rose following the report as investors positioned for increased debt issuance</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Prime Minister Sanae Takaichi has repeatedly played down the likelihood of an extra budget, arguing the government has adequate funds within existing fuel subsidy arrangements</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Japanese Chief Cabinet Secretary Kihara also said there is no immediate need for a supplementary budget, leaving the plan's status uncertain</li></ul><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Japan's government is exploring the possibility of compiling a supplementary budget to help households cope with surging fuel costs, according to a report by Kyodo News, in a move that would add further strain to the country's already stretched public finances.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">The report, citing several unnamed government sources, said the extra budget would be designed to provide relief during the summer months, when elevated gasoline prices and utility bills typically place the greatest burden on Japanese households. The timing reflects growing concern in Tokyo that the fallout from the Iran war and elevated global crude prices could translate into a significant cost of living shock at the peak of the summer demand season.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Financial markets reacted quickly. Yields on 30 and 40-year Japanese government bonds rose following the Kyodo report, as investors anticipated a potential increase in debt issuance to fund any additional spending. The move underscored the sensitivity of Japan's long-end bond market to fiscal signals at a time when debt sustainability is already a closely watched concern.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">The report sits in some tension with recent statements from senior government figures. Prime Minister Sanae Takaichi has on multiple occasions downplayed the prospect of an extra budget, arguing that existing funds are sufficient to cover current fuel subsidy commitments. Chief Cabinet Secretary Kihara echoed that position, saying there is no immediate need for supplementary fiscal measures.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">The conflicting signals leave the plan's status uncertain, but the mere circulation of the idea among government sources was enough to move bond markets, reflecting the degree to which investors are attuned to any shift in Japan's fiscal stance. With the Bank of Japan already navigating a fragile path on interest rates and the yen under intermittent intervention pressure, any expansion of the fiscal deficit would add another variable to an already complex policy environment.</p><p>---</p><p>The prospect of expanded Japanese fiscal support for fuel costs is a modest but notable demand-side signal for oil and energy markets, suggesting Tokyo is bracing for elevated prices to persist through the summer peak season. Any extension or expansion of fuel subsidies would partially insulate Japanese consumers from the full price signal of high crude, potentially supporting near-term consumption levels. For bond markets, the reaction was immediate, with 30 and 40-year JGB yields rising on anticipated debt issuance. A widening of Japan's fiscal deficit to fund energy support would add to existing pressure on the country's finances and could complicate the Bank of Japan's already uncertain path on interest rates, with yen implications that feed back into the cost of Japan's dollar-denominated energy imports.</p> This article was written by Eamonn Sheridan at investinglive.com.

<p>We might get some news when they conclude, or perhaps we'll be kept waiting until tomorrow. </p><p>We'll soon find out!</p><p>In other events, Japan's government is considering extra budget, according to meida reports. Chief Cabinet Sec Kihara says no immediate need though. </p> This article was written by Eamonn Sheridan at investinglive.com.

<p>The RICS UK house price balance fell to -34 in April from -25 in March, the weakest reading since November 2023, as Iran war fallout and rising mortgage rate expectations weighed on buyer sentiment. </p><p>As an aside, eyes are on UK politics:</p><ul><li><a href="https://investinglive.com/news/uk-starmer-has-made-clear-to-allies-he-will-stand-fight-if-streeting-triggers-contest-20260513/" target="_blank" rel="follow" data-article-link="true">UK Starmer: Has made clear to allies, he will stand &amp; fight if Streeting triggers contest.</a></li></ul><p>But, some data to focus on due latet:</p><p>Info via Reuters. </p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Summary:</p><ul class="[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3"><li class="font-claude-response-body whitespace-normal break-words pl-2">The RICS headline house price net balance fell to -34 in April from a downwardly revised -25 in March, the weakest reading since November 2023 and well below the Reuters poll forecast of -26, according to the Royal Institution of Chartered Surveyors</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Gauges of new buyer enquiries and near-term price expectations edged slightly higher but remained in negative territory</li><li class="font-claude-response-body whitespace-normal break-words pl-2">RICS head of research Tarrant Parsons warned that Bank of England signals on potential rate hikes, driven by elevated oil prices and disrupted supply chains, are compounding the already difficult environment for buyers</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Financial markets were pricing in two to three quarter-point BoE rate increases before year-end as of Wednesday, a key driver of mortgage rate expectations</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Affordability pressures were described as most acute in London and southern England, with activity and sentiment expected to stay subdued until the inflation and borrowing cost outlook clarifies</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Rents continued to rise sharply in April, with landlord instructions falling, though by a smaller margin than in March</li></ul><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Sentiment in Britain's housing market deteriorated sharply in April, with the RICS house price balance sliding to its weakest level in nearly two and a half years as the economic fallout from the Iran war and the prospect of higher interest rates bear down on buyers.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">The Royal Institution of Chartered Surveyors reported a net balance of -34 for April, down from a downwardly revised -25 in March and the lowest reading since November 2023. The result came in well below the Reuters consensus forecast of -26, suggesting the market is weakening faster than analysts had anticipated. While measures of new buyer enquiries and short-term price expectations nudged slightly higher on the month, both remained firmly in negative territory.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Tarrant Parsons, RICS' head of research and analysis, pointed directly to the Bank of England as a source of additional pressure. Recent warnings from the central bank that interest rate increases may be needed to contain renewed inflation, itself driven by elevated oil prices and disrupted supply chains stemming from the Iran conflict, are heightening uncertainty for prospective buyers and dampening activity across the market. Parsons said that until a clearer path emerges for both inflation and borrowing costs, sentiment is likely to stay subdued, with London and southern England facing the sharpest affordability constraints.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Financial markets were by Wednesday pricing in two to three quarter-point BoE rate hikes before the end of the year, a development with direct implications for mortgage pricing and, by extension, housing demand. The RICS data arrived against a backdrop of conflicting signals from mortgage lenders, with Nationwide and Halifax pointing in different directions on house prices in April, adding to the difficulty of forming a clear view on near-term market direction.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">In the rental market, conditions remain tight. Landlord instructions continued to contract in April, keeping upward pressure on rents, though the pace of that contraction eased compared with March.</p><p>---</p><p> The sharp deterioration in the RICS balance, combined with financial markets now pricing in two to three Bank of England rate hikes before year-end, points to a prolonged period of housing market weakness in the UK. Rising mortgage rates, themselves a function of elevated oil prices and supply chain disruption from the Iran war, are compressing affordability at a time when consumer confidence is already fragile. For energy markets, a weakening UK housing sector signals broader demand-side stress in one of Europe's largest economies, reinforcing the picture of oil-price inflation acting as a tax on activity rather than a driver of growth. The divergence between mortgage lenders Nationwide and Halifax on house price direction adds uncertainty to any near-term read on the market's trajectory.</p> This article was written by Eamonn Sheridan at investinglive.com.

<p>Secretary of State Marco Rubio is pressing China to use its leverage against Iran over Tehran's actions in the Persian Gulf.</p><p>In a Fox interview Rubio said he hopes to convince China to play a more active role in trying to convince Iran to walk away from what they are doing in the Gulf.</p><p>Trump is desperate to find a way out of the disaster.</p> This article was written by Eamonn Sheridan at investinglive.com.

<ul><li><a href="https://investinglive.com/stocks/the-sp-and-nasdaq-indices-close-at-record-levels-the-dow-industrial-average-lags-20260513/">The S&amp;P and NASDAQ indices close at record levels. The Dow industrial average lags</a></li><li><a href="https://investinglive.com/centralbank/ecbs-lanemonetary-policy-decisions-will-continue-to-be-made-on-a-meeting-by-meeting-basis-20260513/">ECBs Lane:Monetary policy decisions will continue to be made on a meeting-by-meeting basis</a></li><li><a href="https://investinglive.com/centralbank/kevin-warsh-confirmed-as-the-fed-chair-20260513/">Kevin Warsh confirmed as the Fed Chair</a></li><li><a href="https://investinglive.com/centralbank/minneapolis-fed-pres-kashkari-inflation-is-too-high-20260513/">Minneapolis Fed Pres. Kashkari: Inflation is too high</a></li><li><a href="https://investinglive.com/centralbank/boc-meeting-minutes-sees-future-rate-adjustments-would-likely-be-small-20260513/">BOC Meeting Minutes: Sees future rate adjustments would likely be small.</a></li><li><a href="https://investinglive.com/stocks/us-treasury-auctions-off-25-billion-of-30-year-bonds-at-a-high-yield-of-5046-20260513/">US treasury auctions off $25 billion of 30 year bonds at a high yield of 5.046%</a></li><li><a href="https://investinglive.com/news/uk-starmer-has-made-clear-to-allies-he-will-stand-fight-if-streeting-triggers-contest-20260513/">UK Starmer: Has made clear to allies, he will stand &amp; fight if Streeting triggers contest.</a></li><li><a href="https://investinglive.com/centralbank/more-from-feds-collinsstrong-productivity-gains-should-help-lessen-inflationary-pressure-20260513/">More from Fed's Collins:Strong productivity gains should help lessen inflationary pressure</a></li><li><a href="https://investinglive.com/centralbank/feds-collinsits-possible-the-fed-will-need-to-hike-rates-to-cool-inflation-pressures-20260513/">Feds Collins:It’s possible the Fed will need to hike rates to cool inflation pressures</a></li><li><a href="https://investinglive.com/commodities/crude-oil-inventories-for-the-current-week-4306m-versus-2051m-estimate-20260513/">Crude oil inventories for the current week -4.306M versus -2.051M estimate</a></li><li><a href="https://investinglive.com/centralbank/boe-mann-recent-geopolitical-events-have-reinforced-how-exposed-the-uk-economy-is-20260513/">BOE Mann : Recent geopolitical events have reinforced how exposed the UK economy is</a></li><li><a href="https://investinglive.com/news/us-ppi-final-demand-for-april-14-vs-05-est-yoy-60-vs-49-estimate-20260513/">US PPI Final Demand for April 1.4% vs 0.5% est. YoY 6.0% vs 4.9% estimate</a></li><li><a href="https://investinglive.com/centralbank/ecbs-kocher-a-june-hike-is-not-a-baseline-for-the-ecb-20260513/">ECBs Kocher: A June hike is not a baseline for the ECB</a></li><li><a href="https://investinglive.com/technical-analysis/the-usd-is-higher-to-start-the-us-session-oil-and-bonds-are-little-changed-stocks-higher-20260513/">The USD is higher to start the US session. Oil and Bonds are little changed. Stocks higher</a></li><li><a href="https://investinglive.com/news/investinglive-european-markets-wrap-a-calmer-mood-even-as-us-iran-tensions-simmer-20260513/">investingLive European markets wrap: A calmer mood even as US-Iran tensions simmer</a></li></ul><p class="isSelectedEnd">The April 2026 PPI report came in much hotter than expected and is adding to concerns that inflation pressures are becoming more entrenched. Headline PPI rose 1.4% month-over-month versus 0.5% expected, while the year-over-year rate accelerated to 6.0% from 4.3% previously. Core producer prices excluding food and energy climbed 1.0% on the month — the strongest pace since March 2022 — pushing the annual rate to 5.2%.</p><p class="isSelectedEnd">The inflation pressure was broad-based, with services prices surging 2.5%, while the closely watched PPI ex food, energy, and trade also moved higher to 4.4% year-over-year. Combined with yesterday’s CPI data, the report points to a stronger PCE inflation reading ahead, keeping pressure on the Fed at a time when markets had hoped inflation was stabilizing. Not so fast. </p><p class="isSelectedEnd">Inflation expectations are beginning to edge higher as well, with 5-year expectations rising to 2.7% from a more normal 2.2%. Markets are now pricing in a 59% probability of a Fed rate hike in April, leaving incoming Fed Chair Kevin Warsh facing a difficult backdrop. With inflation moving higher again, rate cuts are no longer part of the near-term discussion, despite continued pressure from President Trump for easier monetary policy.</p><p>For the Fed, the combination of sticky services inflation, elevated oil prices, and rising inflation expectations increases the risk that inflation remains higher for longer.</p><p class="isSelectedEnd">Treasury yields moved higher after the release, with the 2-year yield moving back above 4.0% and the 10-year yield pushing toward 4.50%.Although yields moved back off those key levels a bit, they still remain elevated. </p><p class="isSelectedEnd">Looking at the yield curve:</p><ul><li>2 year yield 3.98%,</li><li>10 year yield 4.470%</li><li>30 year yield 51035%</li></ul><p>Those levels are all important proxies, that will be a barometer for rates in the short term. </p><p class="isSelectedEnd">Equity markets soon after the release, reversed early pre-market gains but they reversed again, pushing both the S&amp;P and the Nasdaq to new record closes on the day. The Dow could not keep up with the upside momentum, and closed the day lower. </p><p class="isSelectedEnd">A snapshot of the major indices shows:</p><ul><li>Dow industrial average -68.01. or -0.14% at 49697.96</li><li>S&amp;P index rose 43.29 points or +0.58% at 744-4426</li><li> NASDAQ index rose 314.14 points or 1.20% at 26402.34</li></ul><p class="isSelectedEnd"> The US dollar is closing mostly higher but off the highest levels in reaction to yields backing off modestly. </p><p class="isSelectedEnd">Versus the USD, the only currency to move higher vs the USD was the AUD which rose by 0.23% vs the greenback. The others fell:</p><ul><li>EUR -0.22%</li><li>JPY -0.16%</li><li>GBP -0.10%</li><li>CHF -0.14%</li><li>CAD _0.07%</li><li>NZD -0.27%%</li></ul><p class="isSelectedEnd">Fed' Collins spoke today and while she still expressed hope for additional rate cuts later this year, the broader message focused on persistent inflation risks, the possibility of renewed rate hikes, and the need to keep policy restrictive for an extended period. Her concern that inflation may not cool meaningfully until 2027, combined with warnings that a prolonged Middle East conflict could worsen inflation pressures while slowing growth, suggests the Fed remains highly cautious about easing policy too quickly.</p><p>Fed's Kashkari also spoke and I would characterize his comments as having a modest hawkish tone, emphasizing that inflation remains too high and warning the closure of the Strait of Hormuz has created major uncertainty for the inflation outlook. He stressed the Fed must stay committed to its 2% target and not “move the goalposts.” Kashkari said he had been gaining confidence inflation was moving lower before the Iran conflict, but the supply shock has now upended the outlook and could keep inflation pressures elevated for months even if the Strait reopens quickly.</p><p data-start="517" data-end="697" data-is-last-node="" data-is-only-node="">On the economy, he described the labor market as “lukewarm” but still holding up reasonably well, while also questioning how much Fed rate decisions directly affect mortgage rates.</p><p data-start="517" data-end="697" data-is-last-node="" data-is-only-node="">In other Fed news, it is official - Kevin Warsh will be the next Fed Chair when Powells reign ends on May 15. Warsh will take over with inflation hi, employment leaning more toward strong (although precariously so), yields high and the market discounting more of a hike in April vs no change. That is not what Pres. Trump would like to see of course. </p><p data-start="517" data-end="697" data-is-last-node="" data-is-only-node="">No matter the pressure from the President, Warsh has experience on the Federal Reserve Board, and knows that he holds just one vote. He may have more sway then in his past time as a FOMC governor, but it still takes a majority of the 12 votes to change policy.</p> This article was written by Greg Michalowski at investinglive.com.

<p>Euro area Q1 GDP confirmed at 0.1%Q/Q, the joint-weakest in nine quarters, as industrial output posted its steepest quarterly fall in two years and employment growth slowed sharply. A very bleak day for data from Europe on Wednesday ICYMI. </p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Summary:</p><ul class="[li_&amp;]:mb-0 [li_&amp;]:mt-1 [li_&amp;]:gap-1 [&amp;:not(:last-child)_ul]:pb-1 [&amp;:not(:last-child)_ol]:pb-1 list-disc flex flex-col gap-1 pl-8 mb-3"><li class="font-claude-response-body whitespace-normal break-words pl-2"><a href="https://investinglive.com/news/eurozone-q1-gdp-second-estimate-01-vs-01-qq-prelim-20260513/" target="_blank" rel="follow">Q1 GDP was confirmed at 0.1%Q/Q</a>, unchanged from the preliminary estimate, though the annual rate slipped to 0.8%Y/Y, the softest since Q2 2024, per the updated euro area release</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Germany contributed the most to the headline figure with 0.3%Q/Q growth, while Spain expanded 0.6%Q/Q and Italy grew for a third straight quarter at 0.2%Q/Q</li><li class="font-claude-response-body whitespace-normal break-words pl-2">France failed to grow for the first time in five quarters, and Ireland contracted 2.0%Q/Q for a second consecutive quarter, shaving nearly 0.1ppt off the area-wide figure</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Industrial production fell 0.9%Q/Q in Q1, the steepest quarterly drop in two years, dragged down by weakness in energy output and a sharp fall in non-durable consumer goods including pharmaceuticals</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Employment rose just 0.1%Q/Q in Q1, with Germany recording a fourth successive quarterly fall in payrolls and France's unemployment rate climbing to 8.1%, a five-year high</li><li class="font-claude-response-body whitespace-normal break-words pl-2">Business surveys indicate firms intend to cut headcount at the fastest pace in five years this quarter, with weakening consumer confidence and eroding real incomes expected to weigh on household spending</li></ul><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">The euro area's first-quarter growth rate has been confirmed at 0.1%Q/Q, matching the preliminary estimate and marking one of the weakest quarterly expansions in more than two years. While the figure was nudged fractionally higher to 0.15%Q/Q when carried to two decimal places, it still represented the joint-softest pace in nine quarters and pushed the annual growth rate down to 0.8%Y/Y, the lowest since mid-2024 and meaningfully below the ECB's own March forecast.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">The headline figure was underpinned by a small number of outperformers. Germany, the bloc's largest economy, expanded by 0.3%Q/Q, contributing around 0.09 percentage points to the aggregate. Spain continued to grow solidly at 0.6%Q/Q, and Italy extended its run of positive quarters to three with a 0.2%Q/Q gain. France, however, stalled entirely, failing to record any growth for the first time in five quarters. Ireland was the weakest performer, contracting by 2.0%Q/Q for a second straight quarter and subtracting almost 0.1 percentage points from the area-wide total.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Beneath the GDP headline, the picture in the industrial sector was notably worse. Aggregate industrial production fell 0.9%Q/Q in Q1, the sharpest quarterly contraction in two years. March alone saw a 1.5% monthly decline in energy output and a steep drop of 4.5% in non-durable consumer goods, driven largely by a double-digit fall in pharmaceutical production. Capital goods and intermediate goods offered some partial offset, with the latter posting its strongest monthly gain in a year, partly on the back of strength in chemicals and non-metallic minerals.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Labour market conditions also softened visibly. Employment rose just 0.1%Q/Q in Q1, half the pace of the prior two quarters, with net job creation of only 148,000 across the bloc. Germany shed workers for a fourth consecutive quarter, and France saw its unemployment rate climb 0.2 percentage points to 8.1%, the highest level in five years. Business surveys now suggest firms plan to reduce headcount at the fastest rate in five years in the current quarter, adding to the headwinds facing household spending. With consumers already favouring saving over spending amid job insecurity and squeezed real incomes, household consumption is expected to weaken further in Q2 and may subtract from GDP growth for the first time since late 2023.</p><p>---</p><p> The confirmation of near-stagnant euro area growth, combined with sharply falling industrial output and softening labour markets, reinforces expectations that the ECB will need to maintain an accommodative stance. Weakening consumer confidence and rising precautionary saving point to further demand-side pressure in Q2, which could weigh on energy consumption and dampen near-term oil import appetite from the bloc. France's deteriorating labour market and Germany's fourth consecutive quarter of falling employment are particularly notable given their combined weight in euro area demand.</p> This article was written by Eamonn Sheridan at investinglive.com.

<p>There isn't much on the data agenda to shift around financial markets too much upon release. </p><p>Trump is in China so no doubt we'll get some headlines, 'BIG NEWS coming!", you know the sort of thing, Followed by a nothingburger. Perhaps the "outline of a concept of a plan" ... again, you know the sort of thing. </p> This article was written by Eamonn Sheridan at investinglive.com.

<p>UK PM Starmer is saying:</p><ul><li>Has made it clear to allies that he will stand and fight if Wes Streeting to succeed in triggering a leadership contest.</li></ul><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Starmer and Streeting met this morning in what was dubbed "showdown," though Streeting spent less than 20 minutes in Downing Street. The meeting lasted just 16 minutes, and when asked about it, the PM's spokesman declined to reveal details, stating only that "the prime minister has full confidence in the health secretary." According to The Times, Streeting was expected to discuss the "turbulence" gripping the party and how Starmer would "get us out of this mess."</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">The meeting comes after Labour descended into open division over the prime minister's future, with four ministers resigning and at least 80 MPs urging him to quit, while more than 100 others warned against a leadership contest. Among those who resigned are prominent MP Jess Phillips, who said she was tired of seeing "opportunities for progress stalled and delayed," and Zubir Ahmed, a Streeting ally. </p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">On whether Streeting will trigger a leadership contest, the situation is on a knife-edge. The Times reported that Streeting plans to resign as early as Thursday to make a bid for the leadership, with an ally quoted as saying "He is going for it. He's going tomorrow," though there was no immediate statement from Streeting's office. </p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">Countering that, a Starmer ally, Europe minister Nick Thomas-Symonds, said no candidate appeared to have the backing of enough MPs to trigger a challenge, and that it did not look likely, urging colleagues to "move on." The SNP have also said they will try to force a vote on Starmer's future via an amendment to the King's Speech, which would essentially function as an unofficial no-confidence vote. The next 24–48 hours look decisive.</p><p class="font-claude-response-body break-words whitespace-normal leading-[1.7]">A Labour leadership contest can only be triggered in one of two ways — either Starmer resigns voluntarily, or a challenger secures nominations from 20% of Labour MPs. With Labour holding around 405 seats, that threshold currently sits at 81 MPs. <a href="https://www.thenationalnews.com/news/uk/2026/05/12/starmer-on-the-brink-how-a-labour-leadership-contest-would-work/" target="_blank" class="group/tag relative h-[18px] rounded-full inline-flex items-center overflow-hidden -translate-y-px cursor-pointer">T</a></p> This article was written by Greg Michalowski at investinglive.com.

<ul><li> Prior month MoM revised to 0.7%.and revise higher to 4.3%</li><li>Prior month ex food and energy 0.2% MoM and 4.0% YoY</li><li>PPI MoM 1.4% versus 0.5% estimate</li><li>PPI YoY 6.0% versus 4.9% estimate</li><li>PPI ex food and energy MoM 1.0% vs 0.3% estimate.Highest since March of 2022. </li><li>PPI ex food and energy YoY 5.2% vs 4.3% estimate</li><li>PPI ex food, energy and trade MM +0.6% vs +0.2% last month</li><li>PPI ex food, energy and trade YoY 4.4% vs 3.7% last month </li><li>Services inflation was up 2.5%</li></ul><p>The two year yield has moved above the 4% level to 4.010% 1.5 basis points. The 10 year yield is up 1.7 basis points at 4.488%. Both were mostly lower at the start of the North American session. </p><p>The S&amp;P index is trading down -1.71 points in premarket trading. It was up about 21 points at the start of the North American session. The NASDAQ index is still up around 95.7 but down from being up over 200 points earlier in the US session. The Dow is down -220 points.</p><p>The USD is higher after the report but apart from the GBPUSD and the NZDUSD (new lows for each) is within the prior range going into the report. </p><p>Five year inflation expectations is up to 2.7% from a more normal 2.2%. That is starting to tick to the upside.</p><p>The combination of the CPI and the PPI will lead to a rise in the PCE, the favored inflation guide for the Fed. </p><p>The probability of a Fed hike in April is now up to 59%. Kevin Warsh is coming into a difficult situation. There are no cuts priced in any time soon. That will not sit well with Pres. Trump who has implored and criticized Fed Chair Powell to cut and for not cutting rates. It would be difficult for Warsh to encourage a cut. The best case scenario may be for him to lobby for no hike. Pres. Trump's best hope may be to just put the pedal to the metal (and cross his fingers) for runaway AI growth (just inflate), and continue to ignore/blame inflation on oil and hope for a tumble if and when the war ends and the Strait of Hormuz is opened. </p><p>Although Fed's Cook and Barr are expected to speak, they are not scheduled to speak on the economy. Fed's Goolsbee is scheduled to speak a few times today (he spoke a few times yesterday too) and expressed concerns about services inflation. He is likely to continue his concerns about inflation trends today.UPDATE Stocks are now showing: Dow -241 points, S&amp;P down -3.96 points. Nasdaq up 55 points. Crude oil is up $0.21 to $102.39.</p> This article was written by Greg Michalowski at investinglive.com.

<p dir="ltr">Ever since COVID, the media has been quick to jump on any new disease outbreak, trying to catch the beginning of the next global pandemic. In 2024, the bets were on a mutated monkeypox virus, following a rise in infections and deaths. Some governments even floated the idea of closing airports to prevent the virus from crossing borders.</p><p dir="ltr">Fortunately, things never came close to the scale of COVID, so no global lockdowns were needed. The <a href="https://www.tradingview.com/symbols/SPX/" target="_blank" rel="follow">S&amp;P 500</a> and Nasdaq barely even blinked, largely because the world already had an effective vaccine against mpox — JYNNEOS, the first FDA-approved vaccine from the Danish biotech company Bavarian Nordic, whose shares jumped more than 30% in just a few days due to the surge in demand.</p><p dir="ltr">Now, two years later, panic is building around hantavirus. Even though infectious disease experts — including officials from the World Health Organization — say there’s no evidence of widespread transmission and no reason for quarantines, the media is closely tracking the passengers of the now-infamous expedition ship MV Hondius, where three people died and at least seven others fell ill.</p><p dir="ltr">The bad news is that the Andean strain detected among passengers is estimated to have a fatality rate of between 20% and 40%. The good news is that, unlike COVID-19, hantavirus is not generally transmitted through the air. This means the risk of it becoming a global pandemic remains relatively low, unless, of course, a new airborne strain emerges.</p><p dir="ltr">To put this in context, between 1996 and 2023, the world recorded more than 3,000 outbreaks. Imagine what would happen to the global economy if <a href="https://www.bbc.com/news/articles/c4g8318v4yzo" target="_blank" rel="follow">governments responded to each one</a> by closing borders and imposing lockdowns.</p><p dir="ltr">So, is it time to load up on pharma names and stay-at-home stocks?</p><p dir="ltr">Probably not, since the risk of a new pandemic remains low. As for last week’s rally in vaccine manufacturers like Moderna, Novavax, and Inovio, it seemed more like short-term speculation.</p><p dir="ltr">Right now, the market is paying much closer attention to developments surrounding the Strait of Hormuz and the future of the AI sector. If geopolitical tensions escalate — for example, if Iran attempts to block the Bab el Mandeb Strait — or if massive <a href="https://www.kitco.com/opinion/2025-11-12/are-ai-investments-paying-or-not-yet" target="_blank" rel="follow">investments in AI fail to generate significant returns</a>, the impact would likely be far greater than another wave of headlines about the hantavirus.</p><p dir="ltr">For now, though, judging by the major indexes, investors are still betting on the best-case scenario.</p> This article was written by IL Contributors at investinglive.com.

<p>Headlines:</p><ul><li><a href="https://investinglive.com/forex/usdjpy-nudges-back-up-towards-15800-mark-as-dollar-holds-firmer-on-the-week-20260513/">USD/JPY nudges back up towards 158.00 mark as dollar holds firmer on the week</a></li><li><a href="https://investinglive.com/commodities/gold-continues-to-consolidate-amid-prolonged-us-iran-stalemate-hawkish-fed-risk-20260513/">Gold continues to consolidate amid prolonged US-Iran stalemate, hawkish Fed risk</a></li><li><a href="https://investinglive.com/centralbank/ecbs-villeroy-we-dont-have-enough-information-on-core-inflation-yet-20260513/">ECB's Villeroy: We don't have enough information on core inflation yet</a></li><li><a href="https://investinglive.com/centralbank/ecbs-muller-the-ecb-will-need-a-fast-resolution-on-hormuz-to-hold-in-june-20260513/">ECB's Muller: The ECB will need a fast resolution on Hormuz to hold in June</a></li><li><a href="https://investinglive.com/centralbank/ecbs-rehn-monetary-policy-should-not-be-based-on-oil-prices-alone-20260513/">ECB's Rehn: Monetary policy should not be based on oil prices alone</a></li><li><a href="https://investinglive.com/news/france-april-final-cpi-22-vs-22-yy-prelim-20260513/">French headline inflation surges in April as energy prices accelerate</a></li><li><a href="https://investinglive.com/news/germany-wholesale-prices-push-higher-in-april-as-middle-east-conflict-reverberates-20260513/">Germany wholesale prices push higher in April as Middle East conflict reverberates</a></li><li><a href="https://investinglive.com/news/eurozone-q1-gdp-second-estimate-01-vs-01-qq-prelim-20260513/">Eurozone Q1 GDP second estimate +0.1% vs +0.1% q/q prelim</a></li></ul><p>Markets:</p><ul><li>WTI crude down 0.4% to $101.75, keeps above the $100 mark</li><li>European stocks more mixed; DAX up 0.8%, CAC 40 down 0.3%</li><li>US futures steady with S&amp;P 500 futures up 0.2%</li><li>USD and CAD lead, NZD lags on the day</li><li>US 10-year yields flat at 4.47%</li><li>Gold down 0.2% to $4,703 while silver is up 1% to $87.38</li></ul><p class="text-align-justify">It was a quieter session as markets kept the calm despite the US-Iran conflict continuing to play out.</p><p class="text-align-justify">There's no fresh progress as the focus and attention now shifts towards the east, with US president Trump making his trip to China. The latest from the Chinese state media is that Trump has arrived in Beijing. He will be meeting with China president Xi Jinping over the next two days, so expect key headlines to flow during the Asia and European sessions if there will be anything.</p><p class="text-align-justify">But for today, there wasn't much happening in markets as tensions continue to simmer.</p><p class="text-align-justify">Oil prices are steadier and not doing much with WTI crude keeping above the $100 mark. The commodity is down 0.4% to $101.75 but not keeping elevated in holding above triple digits for now.</p><p class="text-align-justify">Elsewhere, the mood in the equities market is also steadier with European indices holding more mixed but with some slight gains at the balance. The DAX is up 0.8% on the day while CAC 40 is down 0.3%.</p><p class="text-align-justify">As for US futures, the mood music is leaning towards being cautiously optimistic after the late rebound yesterday. S&amp;P 500 futures are up 0.2% with Nasdaq futures up 0.6% on the day as we see a reversal back into tech shares.</p><p class="text-align-justify">In other markets, the dollar is sitting a little higher with EUR/USD down 0.2% to 1.1715 while USD/JPY continues to flirt at one-week highs and keeping near levels where Tokyo officials last decided to intervene last week. The latter is seen around 157.60-70 levels on the day.</p><p class="text-align-justify">Besides that, the bond market is not doing much with Treasury yields mostly flattish across the curve. And in the precious metals space, we are seeing a more mixed picture with gold down 0.2% to $4,703 while silver is up 1% to $87.38.</p> This article was written by Justin Low at investinglive.com.

<ul><li>Prior +0.3%; revised to +0.2%</li></ul><p class="text-align-justify">There was a negative revision to the Q4 estimate, and that's the only minor tweak to the preliminary report. Other than that, this just reaffirms that the euro area economy did post marginal growth in the first quarter of the year.</p><p class="text-align-justify">After a more resilient showing to start the new year, things are taking a turn now as higher energy prices are dampening economic sentiment in March and April. And that is likely to persist further deeper into Q2 as higher oil and gas prices start to become more embedded into other parts of the economy.</p><p class="text-align-justify">Of note, household sentiment is one that is likely to see the biggest knock. And in turn, that will weigh on consumption activity with overall business activity also likely to suffer amid higher costs. That especially in the manufacturing sector, which looked like it was going to turn the corner at the start of the year. But alas, not to be it seems.</p> This article was written by Justin Low at investinglive.com.

<ul><li>CPI +2.2% vs +2.2% y/y prelim</li><li>Prior +1.7%</li><li>HICP +2.5% vs +2.5% y/y prelim</li><li>Prior +2.0%</li></ul><p class="text-align-justify">The monthly change itself also shows a 1% increase in headline inflation, leading to the annual estimate to cross back above the 2% mark in April. Of note, energy prices once again picked up in recording a 4.7% increase on the month after jumping up by 8.9% in March. That is largely driven by the prices of petroleum products (diesel, petrol and liquid fuel), which were up by 8.2% in April.</p><p class="text-align-justify">As for the headline annual estimate, it is largely tied to the sharp acceleration in prices of energy (+14.3% compared to April last year).</p><p class="text-align-justify">The only bit of good news is that the impact hasn't quite yet spilled over to core prices more meaningfully. That being said, core annual inflation did nudge a little higher to 1.2% in April. That is seen marginally higher than the 1.1% reading recorded in March the month before.</p><p class="text-align-justify">As higher energy prices start to bite, expect that to spill over to other parts in due time. Services inflation was already a touch higher in April, up to 1.8% from 1.7% previously. And as the prices for accommodation, transport, and airfares go up, expect that to translate to higher services prices in due time.</p><p class="text-align-justify">So long as the US-Iran conflict continues to drag on and higher oil and gas prices are here to stay, that will continue to lift broader price pressures in the euro area in the coming months.</p> This article was written by Justin Low at investinglive.com.

<p>EUROPEAN SESSION</p><p>In the European session, we don't have much on the agenda other than a couple of low tier releases like the French final CPI report and the second estimate of Eurozone Q1 GDP. The data isn't going to change anything for the ECB, so the market reaction will likely be muted.</p><p>AMERICAN SESSION</p><p>In the American session, the main highlights are the US PPI report and Trump-Xi meeting. The PPI Y/Y is expected at 4.8% vs 4.0% prior, while the Core PPI Y/Y is seen at 4.3% vs 3.8% prior. The US CPI report yesterday came out slightly higher than expected but didn't change much in terms of expectations. Unless the PPI shows significant deviation from the expected numbers, it's unlikely to trigger big moves. </p><p>The focus will likely be on Trump-Xi meeting, although I don't see how this is going to change anything. The most important topic is going to be Iran as China has positioned itself as an unofficial mediator. Trump may seek Xi’s leverage to secure a deal that ends the conflict and reopens the Strait of Hormuz, although Trump has publicly downplayed the need for Chinese help yesterday.</p><p>The two leaders are expected to meet at 14:00 GMT/10:00 ET.</p><p>CENTRAL BANK SPEAKERS</p><ul><li>15:30 GMT/11:30 ET - Fed's Collins (neutral - non voter)</li><li>17:00 GMT/13:00 ET - BoE's Mann (hawkish - voter)</li><li>17:15 GMT/13:15 ET - Fed's Kashkari (hawkish - voter)</li><li>19:00 GMT/15:00 ET - ECB's Lane (neutral - voter)</li><li>19:15 GMT/15:15 ET - ECB President Lagarde (neutral - voter)</li></ul> This article was written by Giuseppe Dellamotta at investinglive.com.