Australia's Central Bank Ready to Raise Rates if Needed After June's Hold Decision

Australia's central bank said it is willing to take necessary steps to achieve price stability and full employment, including increasing the cash rate target.

The Reserve Bank of Australia decided to leave interest rates unchanged at its June meeting, given the ongoing uncertainty related to developments in the Middle East.

Minutes released from the June monetary policy showed that board members believed a durable US-Iran resolution could limit costs passed on to consumers by firms, but noted that underlying inflation would still show lingering effects of the recent fuel shock.

The Reserve Bank of Australia's monetary policy board members decided to hold rates at 4.35% to balance its inflation and employment targets.

Members agreed policy needed to stay restrictive to unwind excess demand through below-trend growth, with inflation remaining well above target and staff's May forecasts pointing to a further two years before it returns to target on a sustainable basis.

The board members believe it would take considerable time to restore oil supply to pre-conflict levels even if the current resolution proves enduring, and noted demand could be buoyed for a time as countries look to rebuild inventories.

The minutes were described as "hawkish" by ANZ, which continues to expect the interest rate to remain at 4.35% for the next year.

Amid a developing Middle East peace resolution, reduced fuel costs, and a decreased May unemployment rate, Australian consumers are showing optimism as ANZ's consumer confidence survey showed a second consecutive weekly rise in June.

The RBA is scheduled to meet again in August, while the ASX Rate Indicator showed 81% market expectations of another hold decision.

Japan's Retail Sales Surge 5.3% in May, Exceeding Forecasts

Japan's retail sales expanded 5.3% year over year in May to 13.45 trillion yen, the Ministry of Economy, Trade and Industry said Monday.The latest reading surpassed the consensus forecast of 3.1% growth, as tracked by Investing.com, and compared with a 2.8% increase recorded in the previous month.It also marked the third month of expansion and the strongest pace since November 2023.On a seasonally adjusted month-over-month basis, retail sales grew 1.9%, faster than the 1.3% expansion between March and April.The upbeat performance was largely driven by a 23.7% year-over-year jump in retail sales of automobiles, followed by machinery and electronics retailers at 14.5%, various goods at 6.9%, and food and beverage retailers at 2.4%.Department stores and supermarkets combined rose 5.3% year over year to 1.95 trillion yen, with department stores outperforming at 7.6% and supermarkets adding 4.5%. On an existing-store basis, department store sales climbed 8.8%, while supermarkets saw a 3.6% increase.However, not all categories reported growth in retail sales. Fuel retailers reported a 2.6% drop, while textile, clothing, and personal goods retail decreased 0.7%.The broader commercial sales total, which includes wholesale trade, rose 5% year over year to 52.55 trillion yen in May, with wholesale expanding 4.9%. Among wholesale sub-sectors, minerals and metals posted the strongest gain at 10.7%, followed by other wholesale at 7.4% and agricultural and marine products at 6.9%.The data further suggests that the government's efforts to shield residents from the fallout of the Iran conflict are working. The government has rolled out fuel subsidies since March amid rising diesel and gasoline prices.Earlier this month, Prime Minister Sanae Takaichi approved a 3.1 trillion yen supplementary budget for the current fiscal year to offset the impact of rising energy costs on households.However, the PM also hinted at reducing gasoline subsidies in a bid to cap gasoline prices at around 170 yen per liter.Meanwhile, the retail outperformance in May comes amid rising inflationary pressures in Japan. In May, Japan's national headline inflation ticked up to 1.5% from 1.4% in April, but missed the Trading Economics forecast of 1.6%.Core CPI, which strips out fresh food items, rose 1.4% year over year in May, unchanged from April's reading, while core-core CPI inflation, which excludes both fresh food and energy prices, eased slightly to 1.8% from 1.9% in April, falling below the Trading Economics forecast of 1.9%.The Bank of Japan recently raised its policy rate by 25 basis points to 1.0%, the highest level since 1995.Last week, BOJ Governor Kazuo Ueda warned that inflation could exceed the central bank's target of 2% as higher crude oil prices drive energy and goods prices upward."Given that the underlying inflation rate is approaching 2% and the current monetary environment is accommodative, we believe that we will continue to raise the policy interest rate and adjust the degree of monetary easing in accordance with economic, price, and financial conditions," Ueda said in his prepared speech to the National Shinkin Bank Convention after missing the policy meeting for June.

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Update: Equity Markets Fall as Trump Says Iran Violated Ceasefire

(Updates with market moves at the end of the day.)US equity benchmarks slipped Friday as President Donald Trump accused Iran of violating their ceasefire agreement, while the Nasdaq Composite and the S&P 500 registered weekly losses.The Nasdaq fell 0.2% to 25,297.6, its fifth consecutive losing session, while the S&P 500 edged down 0.1% to 7,354. The Dow Jones Industrial Average lost 0.1% to 51,876.1. Among sectors, industrials saw the biggest drop, while healthcare paced the gainers.This week, the technology-heavy Nasdaq slid 4.6%, while the S&P 500 shed nearly 2% -- following two consecutive weekly advance. The Dow logged a weekly gain of 0.6%.Trump accused Iran of launching drone attacks on ships passing through the Strait of Hormuz, more than a week after Washington and Tehran signed an interim peace agreement that includes the reopening of the crucial waterway for crude oil shipments."This is a foolish violation of our ceasefire agreement," Trump said in a social media post Friday.The incident indicated that Iran retained some of its military capabilities, CNN reported, citing Trump.In a separate social media post, Trump threatened to impose a 100% tariff on all goods from any European country that implements a digital services tax on US companies."This tariff will supersede trade deals made with the country, whether implemented, signed, or not," Trump said.West Texas Intermediate crude oil was down 3.4% at $69.47 a barrel in Friday late-afternoon trade, while Brent fell 4.2% to $72.09. Both benchmarks were on track for weekly declines of more than 9%, with Brent headed for its sixth consecutive weekly fall."The deep and rapid drop in crude, which saw WTI drop to $69, has soothed global inflation angst -- but it hasn't cured it," Douglas Porter, chief economist at BMO Financial Group, said in a report. "Just as concerns over the oil shock are fading, the cost pressures from the ongoing (artificial intelligence) boom have leapt to the forefront."US Treasury yields were lower, with the two-year rate last down 3.7 basis points at 4.10% and the 10-year rate falling 1.9 basis points to 4.38%.Minneapolis Federal Reserve President Neel Kashkari said that an interest rate increase looks necessary this year."In March, I had penciled in one rate cut by the end of the year. In June, I've changed that to one rate hike by the end of the year," Kashkari, a Federal Open Market Committee voter this year, said during a panel discussion at the Aspen Ideas Festival, according to a CNBC report. "It's a pencil, and so we're going to have to see how the data comes in."The Fed is likely to maintain interest rates stable for the rest of the year as inflation looks set to ease, Morgan Stanley said Friday in a report."We believe tariff pass through is ending, paving the way for substantial disinflation in core goods over the next year, and the recently signed (memorandum of understanding) between the US and Iran has helped push oil prices back toward pre-conflict levels," Morgan Stanley Chief US Economist Michael Gapen wrote. "In addition, we look for further moderation in shelter inflation and some payback from residual seasonality into year end."US consumer sentiment increased in June amid moderating gasoline prices, while inflation expectations eased, a survey by the University of Michigan showed.In company news, IBM (IBM) shares rose 5.2%, the third-best performer on the Dow. The company's technology capable of producing chips smaller than one nanometer represents a "major moment" for the semiconductor industry amid increasing artificial intelligence workloads, Wedbush Securities said in a note on Friday.Microsoft rose 5.7%, the top gainer on the Dow.OpenAI is leaning toward delaying its initial public offering until next year, the New York Times reported Thursday, citing three people involved in the company's deliberations.Onsemi (ON) shares slid nearly 24%, the steepest drop on the S&P 500, after the chipmaker agreed to acquire semiconductor company Synaptics (SYNA) in a deal with an enterprise value of about $7 billion. Synaptics shares fell 3.7%.Gold was last seen up 1% at $4,088.20 per troy ounce, while silver advanced 1% to $58.93 per ounce.Spot gold was headed for its fourth weekly fall as expectations of US interest rate hikes combined with a stronger dollar weighed on the yellow metal.

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American Tower Set to Outpace Competitors' Revenue Growth, RBC Says

American Tower (AMT) is positioned to outpace its competitors in organic revenue growth as the real estate investment trust benefits from positive trends at its CoreSite data center unit, RBC Capital Markets said in a note emailed Friday.The brokerage upgraded the rating on American Tower to outperform from sector perform and raised the price target to $205 from $195."Last month saw an uptick in investor enthusiasm around towers on the potential for a (low earth orbit)-driven terrestrial build-out," RBC analyst Jonathan Atkin said. "While this thesis has waned, and the tower sector has been pressured by the higher interest rate outlook, we expect (American Tower) to post the strongest US net organic tower growth compared with peers through (fiscal 2026)."Recent visits to CoreSite assets "support our upbeat view on the segment outlook," Atkin wrote.RBC raised the REIT's 2026 revenue estimate to $10.98 billion from $10.95 billion, while holding its 2027 forecast steady at $11.24 billion. The brokerage lifted adjusted funds from operations estimates for both 2026 and 2027, on a per-share basis.Earlier in June, American Tower terminated its collocation agreement with EchoStar (ECHO) unit DISH Wireless.American Tower's first-quarter results exceeded Wall Street's estimates at the end of April, driven by mobile data usage, cloud adoption and artificial intelligence workloads.The company's shares were up 3.6% in late Friday afternoon trading. They are down 0.5% so far this year.Price: $174.60, Change: $+5.88, Percent Change: +3.49%

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