GLOBAL FX-
India’s retail inflation likely accelerated to a seven-month high in May on rising food prices, but it is expected to remain well below the Reserve Bank of India’s target, giving it room to ease policy further, a poll found.The RBI changed its stance to “accommodative” from “neutral” last week and cut interest rates for the third time in a row, bringing the borrowing rate to a nine-year low of 5.75%.According to a June 4-7 poll of over 40 economists, the retail inflation rate rose to 3.01 percent in May from a year earlier, up from 2.92 percent in April. Forecasts ranged between 2.83-3.50%.If the consensus forecast is met, consumer prices will rise at their fastest pace since October, but would still be lower than the central bank’s medium-term target for a 4.0% increase for a tenth consecutive month.
In a tweet on June 7, President Donald Trump informed, the US has reached a signed agreement with Mexico. The tariffs scheduled to be implemented by the US on Monday, against Mexico, are hereby indefinitely suspended.He further added Mexico, in turn, has agreed to take strong measures to work to "stem the tide of migration through Mexico, and to our Southern Border" and said those steps would "greatly reduce, or eliminate, illegal immigration coming from Mexico and into the US." Mexican sources told late Friday that negotiators are battling to reach agreement over a US demand that Mexico accept more asylum seekers. A notice released on Friday, US officials granted Chinese exporters two more weeks to get their products to the United States before raising tariffs on those items. The US and Chinese leaders are expected to meet late in June at the G20 meeting.
The Mexican peso jumped against the dollar on Monday after the United States and Mexico struck a migration deal late last week to avert a tariff war, providing some much-needed relief to fragile market sentiment.The Mexican peso rose 2% to 19.2275 pesos per dollar after trading resumed for the first time after Mexico agreed on Friday to expand along the entire border a program that sends migrants seeking asylum in the United States to Mexico.Mexico avoided the most extreme immigration concession sought by U.S. President Donald Trump in the deal reached to fend off threatened tariffs, but it is left even weaker than before in the face of potential new pressure from Trump as he formally kicks off his re-election campaign this month.
China’s exports unexpectedly returned to growth in May despite higher U.S. tariffs, but imports fell the most in nearly three years in a further sign of weak domestic demand that could prompt Beijing to step up stimulus measures.Some analysts suspected Chinese exporters may have rushed out shipments to the United States to avoid new tariffs on $300 billion of goods that President Donald Trump is threatening to impose in a rapidly escalating trade dispute.But Monday’s better-than-expected export data is unlikely to ease fears that a longer and costlier U.S.-China trade war may no longer be avoidable, pushing the global economy towards recession.China’s May exports rose 1.1% from a year earlier, compared with market expectations for a modest decline, customs data showed. Rare earth exports by China, the world’s dominant producer, fell 16% in May from a month earlier amid an increased focus on the raw materials due to the Sino-U.S. trade war, although the drop was in line with usual trading.Exports by China, the key supplier of a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment, swing sharply from month to month, often by 20 percent or more, customs data shows.
Japanese Finance Minister Taro Aso said on Sunday he did not raise, at a bilateral meeting with U.S. Treasury Secretary Steven Mnuchin, the issue of whether to include a currency provision in a two-way trade deal with the United States.Mnuchin had said in the past that in future trade deals, including one with Japan, Washington would like to include a provision to deter currency manipulation.Tokyo has resisted the idea for fear of having its hands tied on measures to address an unwelcome yen spike that would hurt Japan’s export-reliant economy.“I didn’t raise the topic. The two countries don’t have any issues on this point,” Aso told a news conference after a meeting of G20 finance leaders in Fukuoka, southern Japan.
South Korea and Britain have agreed in principle to sign a separate free trade deal ahead of Britain’s exit from the European Union in late October, South Korea’s trade ministry said on Monday.The deal would help South Korea minimise trade uncertainty and maintain trade with Britain based on Seoul’s existing free trade agreement with the EU, the Ministry of Trade, Industry and Energy said in a statement.The deal includes keeping zero-tariffs on South Korean exports such as auto parts and automobiles, the ministry said.South Korea will also prepare responses to other possible scenarios including a ‘no-deal’ Brexit, the ministry added.Britain’s EU membership is due to end on Oct. 31, with or without a deal. If a deal has not been agreed and ratified by then, the government will face the choice of leaving without a deal, seeking more time or cancelling Brexit altogether.South Korea will seek approval from its parliament and ratify the trade pact with Britain before Oct. 31, the ministry said.
A source close to French President Emmanuel Macron said on Sunday that failing to pay a 39 billion pound ($50 billion) Brexit bill when Britain leaves the European Union would amount to a sovereign debt default. “Not honouring your payment obligations is a failure of international commitments equivalent to a sovereign debt default, whose consequences are well known,” the source told.Boris Johnson, the leading candidate to succeed Theresa May as leader of Britain’s Conservative party and therefore its next prime minister, said in a newspaper interview that he would withhold the previously agreed Brexit payment until the EU gave Britain better exit terms.
Prices of the safe-haven gold fell on Monday in Asia as stocks rose on strong China data and a U.S.-Mexico agreement. for August delivery, traded on the Comex division of the New York Mercantile Exchange, were down 1.0% at $1,332.05 per ounce by 1:15 AM ET (05:15 GMT).
Oil prices rose on Monday after Saudi Arabia said producer club OPEC and Russia should keep supplies restricted at current levels, and in relief that the United States withdrew a tariff threat against Mexico, removing a cloud over the global economy.Despite Monday’s increases, traders said concerns about the health of the global economy and its impact on fuel demand still weighed on oil market sentiment.Front-month Brent crude futures, the international benchmark for oil prices, were at $63.61 at 0411 GMT, 32 cents, or 0.5%, above Friday’s close.U.S. West Texas Intermediate (WTI) crude futures were at $54.32 per barrel, 33 cents, or 0.6%.