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RBNZ Press Conference: OCR Would Most Likely Need to Increase Sooner and by More than Projected in February Monetary Policy Statement

RBNZ Press Conference: Governor Anna Breman Voted to Hold Official Cash Rate

RBNZ Press Conference: Three Committee Members Voted to Hold, Three Voted to Lift Official Cash Rate by 25 Basis Points

RBNZ Holds Cash Rate Steady at 2.25%, Inflation Expected to Peak in September Quarter

The Reserve Bank of New Zealand's (RBNZ) monetary policy committee decided to keep the official cash rate steady at 2.25%, according to a Wednesday statement.The Middle East conflict is increasing near-term inflation and weakening economic activity. RBNZ said inflation is expected to peak at 4.3% in the September quarter and to return to the 2% target mid-point in mid-2027. Annual consumers price inflation was 3.1% in the March quarter.Core inflation, wage growth, and medium- to long-term inflation expectations remain consistent with inflation returning to the 2% target mid-point over the medium term. The outlook for medium-term inflation pressures is uncertain, and they could remain elevated if households and businesses expect higher costs in future. However, weak demand and elevated unemployment will dampen medium-term inflation pressures.Business contacts and surveys in New Zealand indicate weaker confidence and spending. Consumer confidence has fallen sharply, and the housing market remains weak.The central bank said the policy rate will most likely need to increase sooner, and the pace of the increases will depend on the relative influence of persistent wage- and price-setting behavior versus weaker economic activity on medium-term inflation pressures.

Australia Inflation Slows Down in April

Australia's consumer price index (CPI) rose 4.2% in the 12 months to April, down from a 4.6% increase in the year to March, the Australian Bureau of Statistics reported Wednesday.The largest contributors to annual inflation were housing, up 6.3%, followed by transport, which increased 6.6%, and food and non-alcoholic beverages, which jumped 2.8%.The impact of higher oil prices was "seen in products and services with high freight and logistics costs, such as parcel delivery and building materials," said Sue-Ellen Luke, the bureau's head of prices statistics.Trimmed mean inflation came in at 3.4% in the 12 months to April, up from 3.3% in the year to March.Annual goods inflation declined to 4.7% in the year to April from 5.5% in March, while services inflation fell to 3.5% from 3.6%, per the report.Of the 11 groups in the CPI, seven experienced a slowdown in annual growth in April compared with March, with transport prices moderating the most.Annual housing inflation was 6.3% in the 12 months to April, reflecting rising costs for electricity, new dwellings, and rents.Electricity costs were 22.5% higher than 12 months ago, primarily related to the end of the Australian government and state-level rebates.On a month-on-month basis, the consumer price index grew 0.4% in April from a 1.1% increase in March.Automotive fuel prices fell 7% in the month to April, after rising 32.8% in March. They are still 23.5% higher than in February, and before the impact of the Middle East conflict, Luke added. Automotive fuel was excluded from the trimmed mean in both March and April.

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Reserve Bank of New Zealand Maintains Official Cash Rate at 2.25%

China's Industrial Profits Up 18% in January-April Period

The total profits of China's major industrial enterprises in the first four months of 2026 went up 18% year on year to 2.436 trillion yuan, faster than the 15.5% growth in the previous month, according to Wednesday data from the National Bureau of Statistics.Mining industry profits rose 26% to 361.8 billion yuan, while that of the manufacturing industry climbed 20% to 1.802 trillion yuan.The utilities industry's profits slipped 1.9% year on year to 272.0 billion yuan.In April alone, profits of major industrial enterprises rose 25% from the previous year.

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Australia's Leading Index Slips Deeper into Negative Territory

The six-month annualized growth rate in the Westpac-Melbourne Institute Leading Index slipped deeper into negative territory, declining to about -0.2% in April from -0.1% in March, according to a Westpac report on Wednesday.The index forecasts the expected pace of economic activity compared with trend levels three to nine months into the future.Australia is projected to face a prolonged period of sluggish, below-trend growth for the rest of the year and into early 2027, marking the first back-to-back below trend read since late 2024.The last six months has seen the leading index growth rate swing 0.3 percentage points to about -0.2% from roughly +0.2% in November due to a sharp weakening in consumer sentiment.The Westpac-Melbourne Institute Consumer Expectations Index has slumped 20% after reaching a four-year high late last year, per the report.

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Australia's Annual Inflation in Year to April at 4.2% Versus 4.6% in Year to March

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South Korea's Business Sentiment Improves to Over Three-Year High in May

The composite business sentiment index in all industries in South Korea increased four points to 98.9 in May from 94.9 in April, while the outlook for the next month added 3.7 points to 97.6, according to data released by the Bank of Korea on Wednesday.The latest print marked the highest in over three years.The seasonally adjusted composite business sentiment index for the manufacturing sector added 1.7 points to 100.8, while the outlook for the following month also added 2.3 points to 100.3, the central bank said.For the non-manufacturing sector, the seasonally adjusted composite business sentiment index increased 5.4 points to 97.5, while the outlook for the following month added 4.7 points to 95.9.Meanwhile, the economic sentiment index, a composite of the business survey and consumer survey indices, went up 5.8 points to 97.5.

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Market Chatter: Japan's May Crude Imports Set to Recover as Refiners Find Alternative Routes

Japan's May crude oil imports are forecast to reach roughly 1.7 million barrels per day, about 75% of the year-ago level, as refiners boost alternative supplies while the Strait of Hormuz stays largely closed, Bloomberg News reported on Tuesday.According to Bloomberg's vessel-tracking data up to May 19, this figure is expected to surpass the government's earlier forecast, driven mainly by independently arranged shipments from the U.S. and Saudi Arabia via the Red Sea, the news wire said.Some cargoes destined for Japan could still be diverted, it said.On May 12, the Japanese government projected alternative supplies from outside Hormuz and from the U.S. would reach about 1.4 million barrels per day in May, plus an extra 70,000 barrels a day from vessels that passed through the strait on April 29, the publication said.Authorities had intended to cover any deficit by tapping into national reserves, the report said.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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Daily Roundup of Key US Economic Data for May 26

The Conference Board's Consumer Confidence Index fell to 93.1 in May from a 93.8 reading in April due to a decline in the present situation that was offset by an increase in the expectations index.The Conference Board cited the negative impact of the war in the Middle East as a key factor.The Dallas Federal Reserve's manufacturing reading rose to 0.4 in May from minus 2.3 in April.The FHFA home price index posted a 0.1% gain in March after falling by 0.1% in February. The index was 1.7% higher than a year ago. For Q1 as a whole, prices rose by 0.5% from the previous quarter and were up 1.7% compared with the same quarter a year earlier.Released at the same time, S&P Case-Shiller reported a 0.7% March home price gain, up from 0.3% in February. The index was up 0.7% year-over-year, down from the 0.8% rate in the previous month.The Philadelphia Fed's services measure fell to minus 23.6 in May from minus 16.5 in April, indicating faster deceleration.The Chicago National Activity Index rebounded in April, now indicating expansion after contraction in March.

Market Chatter: MP Steven Guilbeault Could Quit Caucus As Soon As This Week Amid Concerns Over Govt Rollback of Climate Policies

Former environment and climate change minister Steven Guilbeault is considering resigning from the Liberal Party caucus due to his concern over the federal government's rollback of Trudeau-era climate policies and the most recent iteration of the MOU with Alberta aimed at building a new pipeline, four sources in the federal government tell CTV News.The sources say Guilbeault is considering remaining as an MP, but sitting as an Independent, and likely would not run in the next election.CTV News has reached out to Guilbeault's office but has not received a response by the time of publication. Sources close to the former minister who spoke to him Monday say he wasn't 100% decided yet.On his way into a cabinet meeting Tuesday morning, Prime Minister Mark Carney was asked by the Globe and Mail's Marieke Walsh if he expected Guilbeault to resign. He didn't reply.According to Tuesday's report, Guilbeault is not alone in his concern about climate policy rollbacks. More than a dozen Liberal MPs wrote recently to the prime minister to express worry over changes to methane and clean electricity regulations in Alberta moving the $130 per-tonne effective price on carbon target beyond 2030, as well as any possible public money going toward a new pipeline.Sources close to Guilbeault say he was disheartened that the MOU and corresponding rollback of the oil and gas emissions cap, and aforementioned regulations meant even Canada's 2050 net-zero was out of reach, according to analysis from the Canadian Climate Institute.Speculation over Guilbeault's political future ramped up after Carney and Alberta Premier Danielle Smith agreed earlier this month to elements of an energy deal that could see construction of an oil pipeline begin as early as the fall 2027 if specific conditions are met.Back in November, Guilbeault resigned from Carney's cabinet where he served as Minister of Canadian Identity and Culture -- just hours after Carney and Smith signed the initial memorandum of understanding (MOU) on energy.(Market Chatter news is derived from conversations with market professionals globally, and/or from other media sources. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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Dallas Fed May Manufacturing Index Indicates a Return to Expansion

The Dallas Fed's monthly manufacturing index rebounded to a reading of 0.4 in May from minus 2.3 in April, compared with expectations for a smaller increase to a reading of 0.0.The index indicates a return to expansion which is in line with the New York Fed, Kansas City Fed and the S&P global flash measures but in contrast with the Philadelphia Fed index that suggested contraction.For Dallas, there were gains in the readings for employment and prices paid but declines in the readings for production, shipments and new orders.The reading for the company outlook fell to 0.3 from 3.0 in April.

Dallas Fed May Manufacturing Index 0.4 Vs. Expected 0.0, Prior -2.3

May US Consumer Confidence Falls on Decline in Current Conditions, Expectations Higher

The Conference Board's measure of consumer confidence fell to 93.1 in May from 93.8 in April, still above a reading of 92.0 expected in a survey compiled by Bloomberg as of 7:30 am ET.The present situation reading fell to 121.2 from 124.4, while the expectations reading increased to 74.4 from 73.4.The current assessments of both employment and business conditions deteriorated in April."Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified," said Dana Peterson, Chief Economist at The Conference Board. "Consumer appraisals of current business conditions and the current labor market were moderately less positive compared to last month. This was somewhat offset by modest improvements in consumers' expectations for business conditions and the labor market six months from now."The monthly consumer confidence index from the Conference Board measures consumer sentiment in the current month, with the headline index a combination of the present situation and expectations for the near future. The report also includes the current and future assessments for business and employment conditions.An increase in the reading suggests consumers are more confident, a positive for stocks if that confidence translates into spending. Increased demand is usually inflationary, a negative for bonds.

May US Consumer Confidence Index 93.1 Vs. Expected 92.0, Prior 93.8

March Case-Shiller US Home Price Index Rises Faster Than in Previous Month

The Case-Shiller National Home Price index rose by 0.7% in March before seasonal adjustment following a 0.3% increase in February.National home prices were up 0.7% year-over-year, down from 0.8% in February.The 10-city index rose by 1.2% in the month, while the 20-city index was up 1%.National home prices were down 0.2% month-over-month in February after seasonal adjustment, with the 10-city measure unchanged and the 20-city measure 0.2% lower. A survey compiled by Bloomberg as of 7:30 am ET expected the 20-city index to decrease by 0.1%."More than half of the 20 major U.S. housing markets recorded year-over-year price declines in March, reflecting a broadening and deepening housing slowdown," said Nicholas Godec, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices.The monthly home price index report from S&P CoreLogic Case-Shiller measures single-family home prices across the US with a two-month lag, broken down by city, with combined measures of the 10 and 20 largest cities and a national index. Case-Shiller reports percentage gains both from the previous month and a year earlier.Higher home prices are inflationary and are usually negative for bonds. The possible outcome for housing-related stocks is mixed, as higher prices suggest strong demand, but prices that are accelerating too fast can also deter potential buyers.

March FHFA Home-Price Index Rises as Expected

The FHFA's measure of home prices rose by 0.1% in March after a revised 0.1% decrease in the previous month, as expected in a survey compiled by Bloomberg as of 7:30 am ET.Prices were up 1.7% from a year earlier in March.For Q1 as a whole, home prices rose by 0.5% from the previous quarter and were up 1.7% compared with the same quarter a year earlier.The monthly home price index report from the Federal Housing Finance Agency measures single-family home prices across the US with a two-month lag, broken down by region. The FHFA reports percentage gains both from the previous month and a year earlier.Higher home prices are inflationary and a negative for bonds. The outcome for housing-related stocks is mixed, as higher prices suggest strong demand, but prices that are accelerating too fast can also deter potential buyers.