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Eurozone Trade Surplus Declines in March

The euro area recorded a trade surplus of 7.8 billion euros in March, a decrease from the revised surplus of 11.1 billion euros in the previous month, according to Eurostat data published Tuesday.The consensus estimate for the month was 5.4 billion euros.Exports of goods to the rest of the world declined 5.5% year over year to 265.3 billion euros, while imports rose 4.4% to 257.4 billion euros.

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Hong Kong's Unemployment Unchanged at 3.7%

Hong Kong's seasonally adjusted unemployment rate stood at 3.7% for the February to April period, unchanged from January to March 2026, according to provisional figures released by the city's Census and Statistics department Tuesday.The underemployment rate decreased from 1.6% in January to March to 1.5% in February to April.Total employment decreased by around 7,700 from 3.66 million in January to March to 3.65 million in February to April. Over the same period, the labor force also decreased by around 5,200 from 3.79 million to 3.78 million.Hong Kong Secretary for Labour and Welfare Chris Sun said the city's government was monitoring "elevated geopolitical risks" and its potential impact on the labor market. Nonetheless, the city's "robust growth momentum" should render support to the labor force, Sun said.

Hang Seng

UK Quarterly Labor Productivity Up 0.9% in Q1, Flash Data Shows

The UK's output per hour worked rose 0.9% on a quarterly basis in the first quarter, following a revised 0.5% decline in the prior three-month period, preliminary data from the Office for National Statistics showed Tuesday.On a yearly basis, output per hour worked edged up 0.4%, against the revised 0.4% decrease previously.

Spanish Trade Deficit Widens in March

Spain's trade deficit increased to 4.37 billion euros in March, compared with 3.30 billion euros in February, according to government data published Tuesday.Exports rose 13.1% month over month to 35.86 billion euros, while monthly imports increased 14.9% to 40.23 billion euros.

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Malaysian Franchises Secure MYR89.4 Million in Potential Sales at Jakarta Trade Expo

Malaysia booked nearly 89.4 million ringgit in potential sales during its participation in the Franchise and License Expo Indonesia (FLEI) 2026 held in Jakarta, Malaysia External Trade Development (MATRADE) reported Tuesday.The event, which ran from May 7 to May 10, saw more than 300 business meetings facilitated by MATRADE Indonesia between Malaysian franchise brands and Indonesian business partners, generating estimated potential sales of around $22.3 million.Malaysia's delegation, involving 10 franchise brands including Artivo, ILUVQURAN, 1901, Dsara Fried Chicken, and others, aimed to strengthen market presence and expand franchise opportunities in Indonesia, MATRADE said.

FTSE Bursa Malaysia KLCI

UK Claimant Count Jumps in April

Unemployment benefits claims in the UK rose by 26,510 in April, after a revised increase of 4,900 in March, data from the Office for National Statistics showed Tuesday.The consensus estimate for the month pointed to a growth of 23,100, according to Investing.com data.

Australia's Fiscal Metrics Likely to Stay Broadly Flat in the Near Term, Fitch Says

Conflict-driven oil price volatility has increased uncertainty around growth, revenue, and future fiscal support needs for Australia, and its fiscal metrics are likely to remain broadly flat in the near term, Fitch Ratings said in a note on Tuesday.The country's budget for the fiscal year ending June 2027 is broadly in line with expectations around its "AAA" rating with a stable outlook, which was last affirmed in October 2025.Australia's broader sovereign fiscal profile is likely to remain more stretched than the median for the "AAA" rating, per the note. The medium-term fiscal trajectory is likely to depend increasingly on whether growth slows more sharply than the budget assumes.The underlying federal government cash deficit as a share of gross domestic product (GDP) is officially projected at 1% in fiscal year 2027, in line with the official estimate for fiscal year 2026. Spending is rising through transfers to states, higher debt interest, indexed social security costs, as well as additional health and defence outlays.Receipts at 25.8% of GDP projected are supported by buoyant tax collections driven by rising domestic inflation and global commodity prices. Such revenue support could turn out to be temporary if weaker domestic demand or changing global economic conditions lower parameter effects and tax receipts.Federal gross debt is projected at 34% of GDP in fiscal year 2027, up 0.9 percentage points from the official fiscal year 2026 estimate, but 0.6 percentage points below Fitch's current forecast.

UK Unemployment Rate Rises to 5% in Quarter to March

Britain's unemployment rate stood at 5% in the three months to March, up from 4.9% in the prior three-month period, according to data from the Office for National Statistics published Tuesday.The consensus estimate for the period was 4.9%.Meanwhile, the UK employment rate was 75% during the quarter to March.

UK Average Earnings Including Bonuses Up 4.1% in Three Months to March

Britain's average weekly pay, including bonuses, increased 4.1% year over year in the quarter to March, following a revised 3.9% jump in the prior three-month period, the Office for National Statistics said Tuesday.The latest reading is above the consensus estimate of a 3.8% growth.Excluding bonuses, the growth in average weekly earnings was 3.4%, as expected, against the 3.6% earlier.

Malaysia's Inflation Accelerates to 1.9% in April

Malaysia's consumer price index rose 1.9% annually in April, faster than 1.6% in March, the Department of Statistics Malaysia said Tuesday.The latest reading was slower than the 2.1% growth forecast by Trading Economics.The increase was mainly driven by Alcoholic Beverages & Tobacco, which rose 2.8% compared with 2.7% a month earlier, alongside Information & Communication, which increased 2% compared with 1.4%.Food & Beverages rose 1.2% compared with 1.1% a month earlier, and Furnishings, Household Equipment & Routine Household Maintenance, which rose 0.4% compared with 0.1% in the preceding month.On a month-on-month basis, inflation rose 0.4%, quicker than 0.3% noted in March, the data showed.Core inflation, which excludes volatile items, edged down to 2% from 2.1% a month prior, data showed.

FTSE Bursa Malaysia KLCI

Australian Central Bank's Meeting Minutes Make June Rate Hike Seem Less Likely, ANZ Says

The minutes of the Australian central bank's most recent meeting suggest policymakers believe they have time to see how the economy reacts to tightening that has already occurred, making another rate hike in June less probable, ANZ said in a Tuesday report.ANZ continues to expect the Reserve Bank of Australia (RBA) to maintain the cash rate at 4.35% for a "prolonged period."The central bank's board is not providing forward guidance as it is uncertain on the extent of tighter financial conditions, and is in more of a "wait and see" mode with respect to both domestic activity developments and the Middle East conflict, ANZ said.In its discussions on activity, the board largely waved off declines in business and consumer sentiment, suggesting that a bias toward another rate increase could still prevail, especially when combined with comments from Assistant Governor (Economic) Sarah Hunter who said the risk of inflation pass through is faster and wider now than in the past.However, ANZ is more pessimistic on activity than the board."We expect that the decrease in disposable incomes from higher inflation will likely be sufficiently large that activity disappoints relative to the RBA's estimates," ANZ said.

Market Chatter: Chinese Investment in Europe Surges to Highest Since 2018, Study Finds

Chinese investment in Europe surged 67% to 16.8 billion euros, the highest level since 2018, German newspaper Handelsblatt reported, citing information obtained from Merics and the Rhodium Group.Greenfield investments, where investors build new factories rather than buy companies, jumped 51% to nearly 9 billion euros, 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.)

Shanghai Composite^SZSE

Australia's Consumer Sentiment Rises in May but Remains Subdued Amid Cost Pressures: Westpac-Melbourne Institute

Australia's consumer confidence edged higher in May, but sentiment remained deeply pessimistic as interest rate hikes and cost-of-living pressures continued to outweigh modest budget-driven improvements, according to a survey by Westpac and the Melbourne Institute published Tuesday.The Westpac-Melbourne Institute Consumer Sentiment Index rose 3.5% to 83 in May from 80.1 in April.Consumer sentiment remains deeply pessimistic despite a slight improvement, as lower fuel prices from a temporary tax cut have been offset by the Reserve Bank of Australia's (RBA) third consecutive interest rate hike, said Matthew Hassan, head of Australian macro-forecasting at Westpac.Sentiment improved slightly after the Federal Budget but remained negative overall, with 34% expecting to be worse off compared with 15% better off, a 21% gap that is worse than last year's 10%, despite limited expected personal benefit.The budget shows clear intergenerational differences, with baby boomers and Generation X significantly more pessimistic and expecting to be worse off, while Millennials are only mildly negative, and Generation Z is slightly positive.The biggest rises in May were in assessments of family finances, with both the "finances vs a year ago" and "next 12 months" sub-indexes increasing to 72.8 and 93, respectively, although both remained below March levels.Meanwhile, the "economy over the next 12 months" and "next 5 years" sub-indexes fell to 74.2 and 89.3, respectively, marking the weakest combined reading since November 2022.Consumers' job-loss fears eased in May as the Westpac-Melbourne Institute Unemployment Expectations Index fell 5.2% to 140, still above its long-run average of 129, indicating lingering caution about job prospects.Housing sentiment has fallen sharply amid price declines, rising rate expectations, and new budget tax changes, with buyer confidence hitting multi-year lows despite a slight post-budget improvement and weak sentiment among older buyers.The RBA, after raising rates in its previous three meetings, is likely to pause at its next meeting to assess the impact of the energy price shock and tighter monetary policy, though elevated inflation risks mean further rate hikes are still expected in subsequent meetings.

RBA Monetary Policy Committee Discussed Under-Pricing of Downside Risks of Middle East Conflict by Financial Markets, Minutes Show

The members of the Reserve Bank of Australia's monetary policy committee discussed the possibility that financial markets were under-pricing downside risks associated with the Middle East conflict, noting that global equity prices had rebounded from an initial decline, according to the minutes of the committee's May meeting released on Tuesday.The members concluded that financial conditions in Australia had tightened over the course of the year, and that it remained unclear how restrictive financial conditions were at the time of the meeting. The case to raise the cash rate target by 25 basis points at the meeting centered on the outlook for inflation.They observed that domestic economic conditions evolved broadly in line with the February forecasts and that recent data confirmed that capacity and inflationary pressures were elevated early in the year. Underlying inflation had remained high in the March quarter, but marginally lower than forecast in February.The central bank's staff's baseline forecast was for underlying inflation over the subsequent two years to be higher than previously expected, remaining above 3% until late 2027, and projected to return to 2.5% only in mid-2028, based on various assumptions.While riskier asset prices had moved in response to the conflict and the resultant increases in oil prices, the net change since the onset of the conflict had been modest. The conflict and associated rise in fuel prices had contributed to a sharp decline in consumer confidence, consistent with a higher cost of living.Corporate bond spreads in advanced economies retraced the rise observed immediately after the onset of the conflict and remained low relative to history. Measures of expected equity price volatility increased somewhat but remained well below the levels recorded during earlier episodes of heightened uncertainty.The impact of the conflict shifted market-implied paths for policy rates in advanced economies materially higher. Government bond yields also increased, particularly at longer maturities, largely driven by higher real yields. The rise in bond yields over the preceding six months was more pronounced in Australia than elsewhere, consistent with the progressive increase in expectations for the future policy rate over that period.

Australian Consumer Confidence Rises as Inflation Expectations Ease

The ANZ-Roy Morgan Australian consumer confidence rose 2.3 points to 66.4 in the week of May 11 to May 17, ANZ reported Tuesday.The four-week moving average inched up 0.5 points to 66.4 points.Australian consumer confidence rose last week, with all subindices improving, but it remains near historically low levels since the series began in 1973, according to ANZ economist Sophia Angala.Weekly inflation expectations eased last week to their lowest level since early March, though they remain elevated, reflecting persistent pressure from higher fuel prices and the risk of second-round effects feeding through the broader economy, Angala added.Weekly inflation expectations fell to 6% from 6.4%, while the current financial condition indicator for 12 months rose 2.1 points to 60.4. The future financial conditions for the next 12 months increased to 75 points from 74.Short-term economic confidence for the next year rose 2.2 points to 58.1, while medium-term economic confidence for the next five years increased to 74.2 points from 71.8.The "time to buy a major household item" subcategory rose 3.8 points to 64.1.

Market Chatter: India Mulls Raising Import Duty on Vegetable Oils

India is said to be looking at raising import duties on vegetable oils at the request of the domestic players, according to a Bloomberg report on Tuesday, citing sources.India is a major importer of vegetable oil, as it imports about 60% of its edible oil needs, the report said.The government is now evaluating whether higher taxes would help local farmers to get higher prices for their crops, said the sources cited in the report, adding that no decision on the matter has been taken yet.The discussion comes amid a series of measures being taken by the Indian government to restrict foreign exchange outflows to protect the weakening rupee and forex reserves.Prime Minister Narendra Modi recently requested citizens to restrict their purchase of imported goods such as vegetable oils, fertilizers, gold, and crude oil, to conserve foreign exchange.(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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China Logs Forex Settlement of $257 Billion in April

Chinese banks settled $257.3 billion and sold $217.2 billion in foreign exchange in April, according to a Monday news release with the State Administration of Foreign Exchange.Banks' forex receipts on behalf of clients totaled $832 billion, while forex payments reached $770 billion.From January to April, banks cumulatively settled $1.024 trillion and sold $844.9 billion in forex. Banks' cumulative forex receipts on behalf of clients reached $3.038 trillion, and cumulative foreign exchange payments totaled $2.890 trillion.

Shanghai Composite^SZSE

Australia's Near-Term Underlying Inflation Revised Higher Due to Oil Price Shock, RBA Assistant Governor Says

Australia's near-term underlying inflation has been revised higher due to the oil price shock, adding roughly 0.4 percentage points to underlying inflation by the March quarter 2027, Sarah Hunter, assistant governor at the Reserve Bank of Australia, said on Tuesday during a speech at the Bloomberg Forum for Investment Managers in Sydney, New South Wales.Inflation was already high before the conflict due to domestic capacity pressures and labor constraints, and the conflict has further disrupted global oil and gas markets, adding a major external shock to the economy.Domestic petrol prices peaked at a 36% increase, while diesel prices rose even higher and remain elevated.Driven by direct fuel costs, headline inflation is now forecast to peak at 4.8% in the June quarter, a significant upward revision from previous February forecasts.With a global oil shock on top of pre-existing domestic capacity constraints, the Monetary Policy Board raised the cash rate to 4.35% in its most recent meeting.