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INDIA BONDS-Indian Bonds rangebound as traders look at Trump-Xi meeting
Indian government bonds remained in a tight range on Thursday morning,?as traders avoided large bets, as U.S. president Donald Trump'met' China’s Xi Jinping. This could have an impact on the 'trajectory.of the Iran War. Trump is expected this week to ask Xi for help in resolving a costly and unpopular conflict with Iran. Analysts believe Xi will likely nudge Tehran towards negotiations, but he is unlikely to reduce economic support for its key Middle East partner. Brent crude futures rose 0.4% to $106.05 per barrel. The rising oil price could increase India's oil import-dependent inflation, pressurize the rupee and widen its current account deficit. The benchmark 2035 bond yield of 6.48% hovered around 7.0565% as of 11:03 am IST. It had settled at 7.0493% earlier in the day. In the last few sessions the 10-year yield failed to close above the critical?7.05% mark, which prompted some early buying. This limited further upside. The rupee fell to a new record low of 95.8875 weighed down by continued foreign portfolio outflows. This added to the current and capital account strains. A private bank trader stated that "there is growing anxiety about oil supply shortages across India, and the likely rise in petrol and diesel price," India raised import duties on bullion earlier to reduce the trade deficit. Barclays economists stated that they had previously raised their FY27 CPI forecast by 50 basis point to 4.5%, assumant of a fuel-price hike. They added that the increase in bullion duties before an increase in fuel prices could indicate a delay. As oil prices rose, the overnight index swaps surged. The five-year swap jumped 1.65% to 6.688%, while the two-year swap was up 4.5 basis points at 6.34%. Reporting by Khushi malhotra, Editing by Eileen Soreng & Harikrishnan Nair
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India's largest state, Uttar Pradesh, is hit by a storm that kills nearly 90 people
The state disaster management office announced on Thursday that almost 90 people were killed by a violent storm that slammed India's most populous state - Uttar Pradesh - with rain and hail. Storms are frequent in the north during the hot months of March to June before the monsoons rains provide relief. In a Facebook post, Uttar -Pradesh relief commissioner stated that "adverse weather conditions", on Wednesday, led to the death of 89 people. The post also reported that storms, hail and lightning caused 114 livestock deaths, 53 injuries, and 87 homes to be damaged in the state. TV images showed billboards and trees uprooted by strong winds, some of which crashed into cars. Dust and debris clouds also knocked over wooden furniture from roadside stalls. A state relief official said that some of the deaths were caused by falling trees and collapsed walls in homes. Authorities?said that the chief minister of a state governed by Prime Minister NarendraModi's Bharatiya Janata Party had ordered officials to distribute financial aid and assist survivors within 24 hours. (Reporting and writing by Saurabh Dash and Jatindra dash; writing by Sakshi dayal and Shanima aniyeri; editing by Clarence Fernandez, YPrajesh and Clarence Fernandez)
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Wall Street Journal, May 14,
These are the most popular?stories from the Wall Street Journal. These?stories have not been verified and we cannot vouch for their accuracy. Cerebras Systems' initial public offering in the United States was priced at $185 per share, which is above the upper end of their indicated price range. - 'Chip startup Fractile announced that it raised a $220 million Series?B funding round led by Accel, Factorial Funds and Peter Thiel’s Founders Fund. Cisco Systems will cut?thousands? of jobs in order to?increase artificial intelligence? in its business. The National Football League has signed a four-year contract with Netflix to license three additional games. Additional games have also been licensed to Fox and NBC. Equinox Gold and Orla Mining have agreed to merge in a deal that would create a $18.5 billion North American gold miner. This would allow both companies to accelerate growth, which would otherwise take years. Susan Collins, the Boston Fed president, has hinted that the central banks might have to raise interest rates in the future if inflation pressures increase. This is despite the fact that this is not her current most likely forecast for the economy.
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Gold prices rise on weaker dollar as Trump-Xi meetings and Iran war are in the spotlight
Gold prices rose on Thursday as a result of a 'weaker' dollar. Investors were also looking for any signs of progress with the Iran War and focused mainly on talks between U.S. president Donald?Trump & Chinese president Xi Jinping. As of 0440 GMT, spot gold was 0.4% higher, at $4,706.70 an ounce. U.S. Gold Futures for June Delivery rose 0.2% to $4,713.40. Dollar eased making greenback bullion prices more affordable for holders other currencies. GoldSilver Central's Managing Director Brian Lan said, "Gold is consolidating at the moment because everyone is watching what happens in the high level talks between the U.S. and China." Lan said: "I think (gold) is also a window for those investors who want to get into metal." Trump will meet with Xi at a series in Beijing to discuss economic gains, maintain a fragile truce on trade, and negotiate thorny issues like the Middle East conflict. Analysts say that Trump will likely seek China's assistance to end the unpopular and costly conflict he started with Israel late in February. However, analysts believe he won't get the support he needs. Data released on Wednesday shows that U.S. Producer Prices posted their largest increase in four-years in April. This was boosted by rising costs for goods and services. It is the latest indication of inflation. Kevin Warsh was approved by the U.S. Senate as chairman of the Federal Reserve. The U.S. Central Bank is grappling with a?intensifying rate of inflation, which could make it difficult to implement the interest-rate reductions that Trump has demanded. According to CME Group’s FedWatch, traders have?largely priced in a Fed rate reduction this year. Markets now see a 28% likelihood of a hike before December. Gold is often considered to be a hedge against inflation, but higher interest rates can weigh down on this non-yielding material. Gold discounts in India reached a record-breaking $200 per ounce on Tuesday, after a surge in prices following an import duty hike triggered investor sales in a weakening demand environment. Spot silver dropped 1% to $87.08 an ounce. Platinum was unchanged at $2,137.30 and palladium fell 0.1% to $1,499.14.
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The morning bid rally for EUROPE-AI continues, while the Trump-Xi Summit takes centre stage
Ankur Banerjee gives us a look at what the future holds for European and global markets The record-setting rally fueled by 'AI' appears to be going well as investors shrug off the prospect that interest rates will remain higher in order to combat inflation, oil prices over $100 per barrel and the impasse of negotiations to end the Iran War. The markets are on edge as a high-stakes meeting between U.S. president Donald Trump and China’s Xi Jinping, which has yet to yield any details. Even if expectations are low, a continuation to the status quo may be enough to elicit positive reactions. Trump called Xi a 'great leader and a good friend' as they began two days of discussions on Thursday. The talks will cover the fragile trade truce between China and the United States, Iran and U.S. weapons sales to Taiwan. Xi and Trump greeted each other on the red carpet of Beijing's Great Hall of the People. They shook hands, smiled, and shook hands. Trump brought a group CEOs with him, including Nvidia CEO Jensen Huang and?Elon Musk. For now, the AI theme is still in charge. Asia remains the leader. South Korea's KOSPI, Taiwan's stocks and Japan's Nikkei are all just a few points away from their records peaks reached earlier this week. AI-driven bets have boosted all three indexes. There is little sign that the momentum will fade as Asian chipmakers continue to record record profits with their hyperscaler clients. SK Hynix is 'on the verge of joining the trillion-dollar club. The stock has risen by?more that?1,000% from the beginning of 2025. Investors will be focusing on UK economic data to determine the extent of damage caused by the Iran War that erupted in February. As the political drama intensifies, sterling and government bonds will continue to face pressure. Keir Starmer, British Prime Minister, has so far refused to resign following one of the Labour Party's biggest defeats at last week's regional and local elections. The following are key developments that may influence the markets on Thursday. Economic Events Estimates of UK GDP for March and Q1 Data for UK construction and industrial output in March
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Climate risks are increasing, and a study warns that the World Cup in 2026 will be dangerously hot.
The 'global players union' of football expressed concern on Thursday over the heat during the 2026 World Cup, after scientists warned that the risk of dangerous temperatures for both players and fans had'significantly increased'. A climate research group, World Weather Attribution, has found that a quarter (24 out of 104) matches in the expanded tournament in the United States, Mexico, and Canada will likely be played under conditions that exceed the safety limits recommended by FIFPRO. This is almost twice as high as the risk at the 1994 World Cup held in the United States. Researchers said that around five matches may be played in unsafe conditions, and it would be wise to postpone them. Scientists evaluated the risk by using kickoff time and the Wet Bulb Globe Temperature index (WBGT), which measures how well the body can cool itself. Vincent Gouttebarge, FIFPRO’s medical director said: "The calculations used to estimate the likelihood that 2026 FIFA World Cup matches will be played under high WBGT are in line with FIFPRO’s calculations published in 2020." These estimates justify the need to implement a number of mitigation strategies to protect players' health and performance in hot conditions. FIFPRO recommends that cooling measures be taken when the WBGT exceeds 26 degrees Celsius. Matches should also be postponed at 28C. This is roughly equivalent to 38C for dry heat or 30C with high humidity. FIFA has said that it has undertaken heat-risk planning. This includes measures such as three-minute breaks for hydration in each half-game, cooling infrastructures for fans and players and adapted work-rest cycle. In a press release, FIFA said that it was committed to the protection of the health and well-being of all players, officials, fans, staff and volunteers. "MORE CONSERVATIVE FOOTBALL" Chris Mullington is a consultant anaesthetist and clinical senior lecturer for Imperial College London NHS Trust. He said that extreme heat can have a greater impact on how people play games than it does on medical emergencies. He said that it would be more a matter of performance than health. These players are elite athletes who have acclimatised. You'll notice players self-pacing. This behavioural thermoregulation can be very hard to overcome. You may find yourself playing a more conservative version of football. According to an analysis, cooling systems will reduce the risk in three of 16 venues. More than a third (35%) of the games scheduled in stadiums with a chance of exceeding WBGT of 26C are played at venues without air conditioning, such as Miami, Kansas City and Philadelphia. The analysis showed that the final at the MetLife Stadium, East Rutherford in New Jersey faces a 1 in 8 chance of exceeding 26 C and a 3% chance of reaching the?more dangerous level. This is about twice the risk in 1994. Friederike Otto is a professor of climate science at Imperial College London. She said that the findings showed FIFA the importance of reconsidering the dates for future World Cups, especially in areas susceptible to extreme heat during the summer. Otto said that from a health perspective, it is better to hold the World Cups earlier or later in the calendar year so that you can have a football celebration rather than something which poses a huge health risk for a city. FIFPRO warned that, while air-conditioned stadiums may protect players in cities like Dallas and Houston, fans at outdoor festivals and matches could be exposed to dangerously high temperatures for long periods. Iain Axon reported from London, Lori Ewing wrote in Manchester and Toby Davis edited.
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Kyodo reports that Japan may consider an extra budget to cover rising fuel costs
Kyodo News Agency reported that the Japanese government was considering a supplementary budget in order to ease the pressure on households due to rising fuel costs. This would place additional strain on the country's already stretched finances. Kyodo reported, citing unnamed sources, that a supplementary budget would help households who are likely to face higher gasoline prices and utility costs during the summer peak temperatures. Investors were preparing for an increase in debt issuance as the budget was increased. The Kyodo Report did not specify how large the additional budget might be. The Ministry of Finance did not respond to a request for comment. Saisuke Sakai, senior economist with Mizuho Research Institute, said that the market expected that the government would be able to compile an additional budget. The size of the budget is important. If spending is focused, it could be as little as a few 'trillions' of yen. He said that if it became a 10-trillion yen level the markets might get a completely different impression, which could cause a spike in yields on long-term investments. The Prime Minister Sanae Takaichi repeatedly dismissed the possibility of a budget increase, stating that the government already has enough funds to cover current fuel subsidies. She has been urged by both ruling and opposition legislators to?come up with a new package of plans that will cushion the blow caused by rising oil prices and disruptions in supply due to the U.S. and Israeli war against Iran. Japan has already lowered gasoline prices with?subsidies. A source has told us that the government is looking to tap existing funds in order to revive electricity and 'natural gas' subsidies. Investors are worried about the Bank of Japan's ability to deal with the rising inflationary pressures resulting from the Iran War. A?extra budget will be added to the record budget of 122 trillion yen (776 billion dollars) for the fiscal period that began in April. This is a core part of Takaichi’s "proactive fiscal policy". The Organisation for Economic Cooperation and Development (OECD) urged Japan on Wednesday to stop regularly accumulating extra budgets, and instead use them to combat large shocks.
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Oil prices rise as investors pay attention to Trump-Xi summit in Beijing
Oil prices rose 'on Thursday. Markets were focusing on a 'high-stakes' meeting between U.S. president Donald Trump and Xi Jinping, the Chinese President, to see if there would be any positive results on the Iran War, which has disrupted the global oil supply. Analysts doubt that Xi, China's long-time partner, will push too hard to get Tehran to agree to a deal. Brent crude futures were up by 26 cents or 0.25% to $105.89 a barrel at 0250 GMT. U.S. West Texas intermediate futures were also up by?32 cents or 0.32% to $101.34. Investors worried about a possible U.S. rate hike as higher fuel prices lead to inflationary pressures. Brent crude futures dropped more than $2 per barrel while WTI futures declined more than $1. Trump was given a warm welcome in Beijing's 'Great Hall of the People' on Thursday, ahead of his talks with China's Xi Jinping. The two will discuss their 'fragile' trade truce and the Iran War. They will also talk about U.S. weapons sales to Taiwan. In a note published on Thursday, ING analysts said that oil prices were in a "wait-and-see" mode. They added that the market may be placing too much faith in the U.S. and China talks to produce positive results regarding Iran. Since the beginning of the conflict at the end of Feburary, the Strait of Hormuz has been closed to most traffic. Trump may have said he didn't think he would need China to end the conflict, but he is expected to ask Xi to help resolve the expensive and unpopular conflict. In a 'note, Tony?Sycamore, an IG analyst, said that if the US fails to make progress in reopening the strait it may have few other options than to re-engage in military action. Iran appears to be tightening its grip on the Strait of Hormuz, having cut deals with Iraq and Pakistan for the shipping of oil and liquefied gas from the region. The Chinese supertanker, carrying 2 million barrels worth of Iraqi crude oil, sailed into the Strait of Hormuz Wednesday after spending more than two month in the Gulf due to the U.S. - Iran war. This was the only third oil tanker to leave the Strait of Hormuz since the war began. The International Energy Agency announced on Wednesday that global oil supply would fall short of the?total need this year, as the Middle East war has ravaged oil production in the region and drained inventories at a record pace. This is a reversal from its previous outlook, which predicted a surplus.
Demand for Japanese stocks is boosted by optimism about technology.
In the seven days leading up to May 9, foreign flows into Japanese shares jumped to an all-time high. A rally in AI-linked stocks, as well as strong tech and banking sector earnings, boosted risk sentiment.
Data from the Ministry of Finance (MOF) on Thursday showed that foreigners continued to buy Japanese stocks for a sixth consecutive week.
The Nikkei?225 posted a record high of 63,799.32 points on Thursday. AI-linked demand?and rising interest rate boosted earnings for Japanese tech companies and banking stocks.
Sumco, Kioxia, and Ibiden are tech sector suppliers that have set records this week. Sumco, Kioxia, and Ibiden all gained last week.
MOF data revealed on Wednesday that foreigners had invested a record amount of 9.41 trillion yen in domestic stocks during April.
Japanese bonds attracted a net 474.1 billion Japanese yen in foreign capital during the last week, after facing outflows of two consecutive weeks.
In the past week, foreigners purchased long-term 'bonds' of?106.2billion yen as well as short-term bonds worth 367.9billion yen.
Japanese investors also sold 593.6 billion yen worth of foreign shares. This is compared to net sales of 2,43 trillion yen in the previous week.
The Japanese, on the other hand, continued to be net buyers of foreign long-term debt, investing?1.64 trillion in the second consecutive week.
(source: Reuters)