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Bank of Spain warns of the potential for higher rents if mortgage lending is restricted
On Thursday, the Bank of Spain said that it is carefully calibrating any potential restrictions on mortgage lending to improve the resilience of both households and banks while not increasing rent prices. The 'authority' is developing a framework which would enable it to activate macroprudential limitations on lending standards when necessary to prevent risky loans. It estimated in its semi-annual report on financial stability that these measures will shift a part of the housing from ownership to rental, leading to likely lower house prices. It warned that the measures could have a knock-on effect on other variables, such as the rental price, and undermine the effectiveness of the plan. It said that any'such measures' should be calibrated carefully. Rents are rising at a rate well above inflation, with 10% increases in 2024, and 5% increases in 2025. This is in a housing market that has an estimated deficit of 700,000 houses. In 2025, home prices will rise at a rate of 9.7% per year, but they are still 14.7% lower than the peak in 2007, when Spain's bubble burst and forced the banks to be bailed out. Financial Stability Director Daniel Perez Cid said at a press briefing that the institution has not yet detected signs of a real estate bubble, such as excessive growth in credit. The stock of mortgage loans grew by a staggering 3.7 percent in the fourth quarter 2025, marking the fifth consecutive quarter of growth. However, it is still far below the levels of 2000-2008. In March, the number of new mortgage loans in Spain increased by 9.6% compared to last year. As of March, Spanish lenders offered the second lowest mortgage rates in the Eurozone. They averaged?2,75%. However, their?approaches differ. Santander's new mortgage lending increased by 44% in Spain in the first quarter compared to the previous year, while Bankinter decreased it by 40%. (Reporting and editing by Andrei Khalip, with Jesus Aguado)
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MORNING BID AMERICAS - 'G2' Choreography
What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets The two-hour meeting between Donald Trump and Xi Jinping, China's president, in 'Beijing' on Thursday seemed to be full of pleasant words and a few contentious issues were avoided. However, Xi did say that trade talks are progressing and warned Taiwan. Investors have little to latch onto on the first day of "the summit". The market is left with only two major themes: oil-fueled inflation and the AI explosion. Below, I'll go into more detail. Check out my most recent column about why the Fed might have to raise rates. Listen to the most recent episode of Morning Bid, the daily podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. "G2" CHOREOGRAPHY In terms of inflation, the U.S. Producer prices rose by the most in four years in April, and core consumer prices also increased above forecasts in the same month. Fed models predict that annual headline inflation will rise above 4% by May. Bond markets are restless, as yields across the curve increase, as futures price in a possible Fed interest rate hike over the next year. Susan Collins, Boston Fed's chief executive officer, said that the central bank couldn't ignore supply shocks because inflation has been above target for five years and is now rising. Kevin Warsh will be taking over as Fed?Chair tomorrow after the Senate confirmed his appointment on Wednesday. The stock market's enthusiasm has not been dampened by rising borrowing rates. Wall Street indexes have risen on Wednesday and the S&P 500 as well as Nasdaq reached new closing highs. Stock futures were higher before the opening bell while European shares rose following the open. In Asia, Japan’s Nikkei reached another record while South Korea’s SK Hynix is on the verge of becoming the second trillion-dollar company in the country after Samsung. Asia's chip titans were once again in the spotlight as Taiwan's TSMC increased its forecast for chip demand by 50%, to $1.5 trillion. Meanwhile, Britain's political unrest eased as Keir starmer refused to step down. A leadership challenge may still be in the works, as health minister Wes Streeting is reportedly planning to resign, and launch a bid against Starmer. Chart of the Day In just six weeks the Philadelphia SE?semiconductor Index has increased by 64%, compared with a gain of nearly 17% for the S&P 500. Micron Technology, Advanced Micro Devices and Intel all saw their shares more than double during this time. Analysts estimate gains in semis, memory stocks and other semiconductors accounted for 70%?of the $5.1 trillion in market capitalization that the S&P 500 will add in 2026. Watch today's events * U.S. import prices for April (8:30 am EDT), weekly claims of unemployment (8:30 am EDT), and retail sales (8.30am EDT). * Kansas Fed Jeffrey Schmid speaks, as does?Cleveland Fed Beth Hammack. New York Fed John Williams also speaks * Trump-Xi summit continues Want to receive a copy of the Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent the views of News. News is a non-partisan organization that adheres to the Trust Principles and values integrity, independence and neutrality.
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White House: China's Xi expressed an interest in purchasing US oil
During a leadership'summit with Donald Trump, President Xi Jinping stated his interest in buying more U.S. crude oil to reduce China’s dependence on Strait of Hormuz. The readout said that both leaders agreed the Strait of Hormuz should remain open in order to allow for the free flow of oil and Xi was against any militarization of the strait or tolls. The Chinese summaries published by the state media did not mention oil purchases. China's Foreign Ministry did not immediately respond to a comment request. Trump and Xi spent several hours together on Thursday, the first day of a two-day meeting that Chinese state media claimed would change the course of relations between the two countries. Chinese purchases of U.S. agricultural and energy products are being considered as part of a possible deal. However,?no specific details have yet been revealed. China hasn't imported U.S. crude oil since May 20, 2025 due to 20% tariffs that were imposed in the trade war. The removal of these duties is likely to be a pre-requisite for any large-scale purchase of U.S. crude oil. Even with the search of Hormuz free alternatives, a tariff of 20% still makes U.S. Light Sweet Crude commercially uncompetitive against other grades available, said?Emma Li an analyst at ship-tracking company Vortexa. Even at its height, the U.S. was never a major crude oil supplier to the world's largest importer. In 2020, China imported about 395,000 barrels of U.S. crude oil per day (bpd), which is just under 4%. By 2024, when Trump was no longer in office, this had dropped to 193,000 bpd and $6?billion. The Chairman of the state-owned oil giant CNPC has long-term agreements with?U.S. The chairman of state-owned oil major CNPC, which has long-term contracts with?U.S. It was reported earlier that the U.S. and China were expected to establish a "trade mechanism" for non-sensitive products this week. Each side could identify $30 billion in goods where they can reduce tariffs. Reporting by Trevor Hunnicutt in Beijing, Lewis Jackson and Sam Li; Editing by Sharon Singleton & Thomas Derpinghaus
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Zinc reaches near 4-year high amid supply concerns; copper falls
The zinc price surged on Thursday to its highest level in nearly four years after another incident at a metal smelter increased supply concerns. Copper was poised to break an eight-day streak of gains, but held above $14,000. As of 0930 GMT, the benchmark three-month zinc at London Metal Exchange had risen 2.3% to $3,610 per metric tonne. The metal used for galvanizing steel reached $3,616.50, its highest level since August 2022. Nexa Resources announced on Wednesday that operations at the 344,400-ton Cajamarquilla Zinc Smelter, which is the largest zinc smelter of Latin America and has the highest production rate in Latin America, have been temporarily suspended following a fire, which damaged infrastructure. The fire occurred a day after Glencore-owned Kazzinc announced that its zinc and led plants in eastern Kazakhstan would be operating at reduced capacity after an explosion last week. The International Lead and Zn Study Group had predicted that there would be a deficit of 19,000 tons in the refined Zinc market this year, even before these incidents. Zinc Stocks On the LME, there are 110,875 tonnes, which is less than three full days of global consumption. The cash LME Zinc contract traded at a discount of $19 per ton to the forward three-month contract , indicating no immediate ?tightness. The copper price fell by 0.7%, to $14,045.50 per ton. It had reached $14,196.50 a ton on Wednesday. This was the highest level since January 29, when it hit its record high of $14,527.50. The recent rise in copper prices has left traders vulnerable to profit-taking. This is especially true after the higher-than expected U.S. inflation figures have strengthened the dollar, and weakened expectations of near-term Federal Reserve rates cuts. Investors are watching the outcome of the meeting between Chinese president Xi Jinping, and his U.S. counterpart Donald Trump that began on Thursday. Aluminium slipped 0.1% to $3,655.50. This is near the high of four years that was reached on Wednesday. Lead was unchanged at $2,008, while nickel fell 1.2% to $18,945. Tin dropped 0.6% to $57,680. (Reporting and additional reporting by Dylan Duan, Lewis Jackson and Mrigank Dhaniwala; editing by Mrigank Dahaniwala and Eileen Soreng)
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Markets focus on Trump-Xi Meeting
Gold remained largely unchanged on 'Thursday as investors digested a rise in U.S. Inflation due to increased energy costs associated with the Iran War. As of 0931 GMT, spot gold was up 0.1% to $4,689.79 an ounce. U.S. Gold futures for June delivery dropped 0.2% to $4,696.20. China's Xi Jinping said that the trade talks are?making good progress on Thursday at the beginning of a two day summit. However, he warned that disagreements over Taiwan may?damage relationships and even lead conflict. Gold is still hovering at $4,700 while markets digest the latest U.S. inflation figures. Carlo Alberto De Casa, a Swissquote analyst, said that it is "very clear" that we are entering a phase of consolidation. The latest indication of inflation acceleration was revealed by data?on Wednesday. On Tuesday, data showed that the annual U.S. consumer inflation had posted its biggest gain in three year. According to CME Group’s FedWatch tool, traders have priced in a large amount of interest rate reductions this year due to the rising energy price. Markets anticipate a 29% likelihood of a rise by December. The?U.S. The Senate has approved Kevin Warsh to be the chair of the Federal reserve. Gold is a good hedge against inflation. However, rising interest rates tend to put a strain on this non-yielding material. HSBC has raised its forecasts for silver prices to $75 an ounce by '2026. Citing the weaker U.S. -dollar, the bank says that there is little room for further price increases as silver remains too overvalued. Silver spot fell by 1.1%, to $87 an ounce. Platinum fell by 0.9%, to $2,117.35. Palladium fell by 1.3%, to $1,480.56. (Reporting and editing by Barbara Lewis in Bengaluru, Noel John)
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UK's National Grid misses its profit target as US storm damages weigh on it
National Grid, the UK's energy company, missed its annual profit target?on Thursday due to higher costs for repairing storm-related damage in its U.S. operations. However, it reaffirmed its outlook, saying that geopolitical risks and tariffs had a limited impact. The British electricity network operator posted an adjusted operating loss of 7.68 billion pound sterling ($5.68 billion) in the year ending March 31. This was below the 5.75 billion pound estimate compiled by?company?. The cost of storms rose 7.4%, to?636 millions pounds. National Grid is reshaping their portfolio to focus on regulated gas and electricity networks. They have also sold off the U.S. Onshore Renewables division as they ramp up investment in grid infrastructure. Zoe Yujnovich, CEO of? In an interview with?Thursday, CEO Zoe Yujnovich said that the Middle East tensions will not have a major impact on its supply chain. Growth plans are also unchanged. The company has reaffirmed their 2027 forecast for adjusted earnings per share growth of 13% to 15%. By 0846 GMT, its shares were up 2.3% at 1,305 pence.
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Venezuelan bonds rise after debt restructuring by government
Venezuelan bonds rose on Thursday, after the country announced its sovereign restructuring. It also said it had appointed financial advisors. These are key steps in launching one of the largest and most complex debt restructurings ever. Data from Tradeweb showed that some of the Venezuelan government's defaulted dollar bonds rallied by more than two cents, with the maturity bid for 2031 at 60.486 cents per dollar. This was the highest price in over a decade. Bonds issued by the state oil company Petroleos de Venezuela PDVSA also saw gains. The latest rally follows the announcement by the government late on Wednesday that it would aim for a "comprehensive" and "orderly" overhaul of debts, including both sovereign and PDVSA debts. It also aimed to achieve "substantial relief from debt burdens. The government announced that Centerview Partners had been appointed as its financial advisor. Venezuela defaulted in 2017 on its external debts due to U.S. Sanctions, but its bonds have been steadily rising since Donald Trump took office as President of the United States at the beginning of last year. Since the U.S. ousted President Nicolas Maduro last January, momentum for a debt restructuring has been building. Since then, Washington's relations with acting Venezuelan president?Delcy Rod have become closer. In a client note, JPMorgan analyst Ben Ramsey stated that the plan was to move "expeditiously" with financial advisers. "We are keeping Venezuela at MW (marketweight), pending an improved assessment of the debt sustainability framework." The South American nation, which has the largest oil reserves in the world, and its state oil company Petroleos de Venezuela are estimated to owe $150 billion to $170 billion of debt and interest. This burden must be reduced for the economy to remain viable. (Reporting and editing by Andrew Heavens; Karin Strohecker)
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Top Monte dei Paschi investor warns against Banco BPM merger, Generali stake sale
The second largest investor in Banca Monte Dei Paschi di Siena warned that the bank could be "absorbed" into Banco BPM if a merger were to occur. He also urged Generali not to sell their stake in Generali. Francesco Gaetano Caltagirone is an 83-year old billionaire who owns 10,2% of MPS. He made these comments in an interview to Corriere della Sera, after voting against Luigi Lovaglio's return as CEO last month. Caltagirone, a financial powerhouse in Italy, is close to Prime Minister Giorgia Melons. Its holdings include a stake in Generali. Caltagirone’s intervention highlights the growing tension over the future of MPS as Rome presses to consolidate Italy's?fragmented bank industry. His opposition to any potential Banco BPM tie up and to the sale of Generali's stake highlights shareholder unease over Lovaglio’s plans. This could complicate efforts for a merger that is seen as crucial to?the long-term future of?the bank. Caltagirone stated that he hoped Lovaglio would be able to adapt to the needs of a MPS chief who could build consensus and establish a clear, long-term strategy. He's worked very hard, but no one is a man for every season. He said, "I hope he can change." He warned that the shareholder vote last month could lead to MPS being "absorbed" into Banco BPM as part of a merger, with the combined company's headquarters most likely located in Milan instead of Siena. Banco BPM has been an investor in MPS for some time and a partnership between the two companies is long considered. Caltagirone who is from Sicily but built his empire in Rome, complained that large Italian banks were concentrated in the north. He supported the MPS takeover of Mediobanca, a Milan-based bank that landed Generali's stake. Caltagirone stated that he opposed the merger of Mediobanca with MPS, which Lovaglio pursues. He also challenged Lovaglio's belief that Generali's 13% stake was not necessary for the bank. He said that large Italian lenders are interested in?Generali due to potential partnerships and the favourable capital treatment of insurance holdings. He said: "If it's something that all the big banks want, then I don’t see why it would be a good idea for one bank to sell it."
White House's few options for reducing gas prices as Iran War drags on
Three?people who are familiar with White House discussions said that Trump administration officials were scrambling to contain economic and political fallout from the war with Iran as the hopes of a quick solution faded. U.S. president Donald Trump backed the suspension of the federal gasoline tax this week, a move that would slash 18 cents per gallon from motor fuel prices currently averaging over $4.50 a galon across the country. The idea was once viewed as unnecessary by some White House staffers, but it is now becoming more urgent because officials are running out of options to demonstrate that they are combating rising fuel costs.
One person said that there is a consensus in the White House about the need for "a visible consumer relief now" because prices have risen by 50% since the beginning of the war. In the past, gasoline prices of $4 per gallon have triggered public outrage and economic anxiety. This has been confirmed since the start of the war, with consumer sentiment dropping to a new record low and U.S. inflation rising to 3.8%, its highest level in almost three years.
According to a?May /Ipsos survey, more than six out of ten Americans said their household finances had been affected by higher gas prices. Trump's approval rating for his economic policies was only 30%, down a few points since the start of the war. Trump is now under pressure from his fellow Republicans, who are worried that the economic impact of the war will cause a backlash among voters and could cost the party control of both the House of Representatives as well as the Senate during the November midterm elections.
Two people who were familiar with the discussion say that administration officials are poring over data from the market to determine if the national average could rise to $5 per gallon. AAA data indicates that seven states have already exceeded this mark.
A political adviser at the White House said: "They feel that that cost, gas, is their biggest vulnerability right now. Not overall economic conditions." "The hardest thing is also that we made (former president Joe) Biden's Achilles' heel the gas price, and now it's ours."
Taylor Rogers, a White House spokesperson, said that Trump and his team of energy experts had prepared a plan for mitigating the effects.
Rogers stated that "the ability to provide both the United States and its allies with reliable energy, affordable and secure, has been a long-term strategic goal of President Trump. His successful efforts to unlock American oil and natural gas have achieved this objective."
"SMALL PRICE PAY"
As Asian and European buyers scrambled for supplies, the administration's worries have grown. This has lowered U.S. stocks at a time when they are typically rising, alarming Wall Street analysts, who warn that the U.S. may face a shortage which could drive gasoline, jet fuel, and diesel prices higher this summer. Since Iran blocked access to the Strait of Hormuz - a waterway which normally transports one fifth of the world's supply of oil - energy prices have risen. The effects are felt by companies from McDonald's to airlines. Last week, the CEO of the fast food giant said that consumers with lower incomes were spending less. According to Transportation Department figures, U.S. airline fuel expenses in March rose 56% compared to February. This has squeezed carriers that already operate on thin margins. Spirit Airlines was one of them, the troubled low-cost carrier which shut down in early May.
Trump called the price increases "a small price to pay" in order to overthrow Iran's regime, and to prevent Tehran from acquiring nuclear weapons. When asked Tuesday if the finances of Americans were motivating Trump to strike a deal he replied, "Not at all."
Trump told reporters that "the only thing I care about when I talk about Iran is they cannot have a nuke weapon." "I do not think about Americans?financial situations. I don't care about anyone. I only think about one thing: we can't let Iran get a nuclear bomb. That's all."
GAS TAX IDEAL GAINS TRACTION
One person familiar with White House conversations said that the gas tax idea was considered as a fallback until late April. However, the idea gained momentum in the last week after the Iranian ceasefire track failed and officials decided they needed to make a policy shift Americans could feel.
Trump's suspension proposal would need congressional approval. Some Republican legislators have expressed interest in the idea. However, party leaders are yet to commit. In April, the administration waived shipping rules and exempted certain Russian oil from sanctions to allow for additional fuel transportation. The Energy Department announced on Monday that it will loan another 53.3 millions barrels of crude oil from its national security stockpile in order to calm the market.
According to an Ipsos/?/Ipsos survey conducted between April 24 and 27, only one in four Americans think the war against Iran was worth it. The other 53% believe it wasn't worth it, while the remainder are unsure. One out of five Republicans believes the war was not worth it.
Amy Koch, Republican strategist and advisor to state and federal candidates said that the administration had a limited time frame to end the conflict, and ease the pressure on fuel prices, before Memorial Day, which is the unofficial beginning of the summer driving season.
Koch stated that "the White House is on the clock."
(source: Reuters)