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World News Roundup

🇳🇿 New Zealand Stocks Kick off Week Lower

Shares in New Zealand fell 8 points or almost 0.1% in early deals on Monday, falling for the second straight session as vigilance grew ahead of an interest rate decision from the RBNZ later this week.

🇦🇺 BHP Group Hits 5-week High

BHP Group increased to a 5-week high of 45.97 AUD. Over the past 4 weeks, BHP Group lost 0.44%, and in the last 12 months, it increased 1.47%.

🇰🇼 Kuwait Inflation Accelerates to 3.17% in April

The annual inflation rate in Kuwait increased to 3.17% in April 2024 from 3.02% in the previous month, which was the lowest reading since August 2021. Prices accelerated for transport (1.06% vs 0.92% in March), food and beverages (5.79% vs 5.17%), and miscellaneous goods and services (4.66% vs 3.96%), while inflation was steady for housing services (at 1.41%). On the other hand, cost moderated for home furnishings.

🇯🇵 Japanese Shares Hit 5-Week Highs

The Nikkei 225 Index jumped 0.9% to above 39,100 while the broader Topix Index gained 0.7% to 2,765 on monday, with Japanese shares hitting five-week highs and tracking a strong rally on Wall Street where the Dow closed above the key 40,000 mark for the first time ever. Investors also look forward to a slew of economic reports in Japan this week including trade, inflation and business activity data. Notable gains were seen from index heavyweights such as Socionext (3%), Mizuho Financial (1.7%), Recruit Holdings (2.1%), Mitsui

🇨🇳 China Holds LPR Rate Steady

The People's Bank of China kept key lending rates unchanged at the May fixing, as widely expected. The 1-year loan prime rate (LPR), the benchmark for most corporate and household loans, was maintained at 3.45%. Meanwhile, the 5-year rate, a reference for property mortgages, was retained at 3.95% following a record reduction of 25bps in February.

Palestine Current Account Gap Largest Since 2005 

Palestine's current account deficit widened to USD 1.105 million in Q4 of 2023 from USD 905 million in the same quarter of the prior year, a preliminary result showed. It was the biggest current account deficit since the fourth quarter of 2005 due to a slump in the income surplus (USD 83 million vs USD 969 million in Q4 of 2022) and the current transfer surplus (USD 316 million vs USD 587 million), amid a decline in the trade goods deficit (USD 1,306 million vs USD 2,116 million in Q4 2022) and the services account gap (USD 198 million vs USD 345 million).

Gold Hits New Record Highs

Gold climbed past $2,430 per ounce on Monday, reaching a new record, supported by growing speculations of Federal Reserve interest rate cuts, strong central bank purchases, and safe-haven demand. Last week, data showed signs of slowing US consumer inflation, coupled with stalling retail sales have given the Fed more leeway to initiate monetary easing. Although policymakers haven’t officially changed their stance, markets are already anticipating the first rate reductions this year. Lower interest rates raise the appeal of non-bearing assets like gold. Investors will take more cues from several Fed officials due to speak later in the day. Meanwhile, rising geopolitical tensions, including conflicts between Israel and Hamas and the war in Ukraine, also boosted gold prices. Also, strong central bank buying, particularly by China, as it seeks to reduce its dependence on the US dollar, further supported the trend.

Oil Rises as Search for Iran President Underway

WTI crude futures rose above $80 per barrel on Monday, extending gains from last week as rescuers searched for Iranian President Ebrahim Raisi who figured in a helicopter crash, raising political uncertainty in a major oil-producing nation. Iranian state media said the location of the crash had been identified but Raisi’s condition was unclear. In the US, the government said late last week that it had purchased 3.3 million barrels of oil at $79.38 per barrel to replenish its Strategic Petroleum Reserve. Elsewhere, the latest OPEC report indicated that member countries exceeded their production cap by 568,000 barrels per day in April, but maintained solid demand projections of 2.25 million barrels per day in 2024 and 1.85 million barrels per day in 2025. Investors now look ahead to OPEC’s meeting on June 1 where the group will decide on output policy beyond the second quarter.

🇰🇷 South Korean Shares Rise on Auto and Finance Boost

The benchmark KOSPI rose 0.8% to around 2,746 points on Monday, reversing losses from last week, boosted by gains from automakers and financials, following the government’s reaffirmation of pushing forward its corporate reform measures. Auto and financial stocks are expected to benefit the most from the government's corporate value-up program, with significant potential to increase dividend payouts. At the same time, China’s plans to address its property crisis and growing expectations for global rate cuts also provided further support for the benchmark index. Gains in auto and finance shares were led by Hyundai Motors (2.9%), Kia Corp (2%), KB Financial (2.4%), Shinhan Financial (3.5%), and Hana Financial (1.9%). Other index heavyweights were also in the green, including Samsung Electronics (1.3%), SK Hynix (0.5%), and Posco Holdings (0.6%).

🇹🇭 Thailand Q1 GDP Annual Growth Beats Forecasts

Thailand’s GDP advanced 1.5% yoy in Q1 of 2024, beating expectations of 0.8%, following a 1.7% growth in Q4 of 2023. Private consumption expanded softer (6.9% vs 7.4% in Q4), while net trade contributed negatively to the GDP, with exports rising by 2.5% (vs 4.9% in Q4), while imports increased faster (5.3% vs 3.9%). Meantime, fixed investments shrank more (-4.2% vs -0.4%), while government spending continued to decline (-2.2% vs -3.0% in Q4).

🇨🇳 China Stocks Gain as PBOC Stands Pat

The Shanghai Composite rose 0.5% to around 3,170 while the Shenzhen Component gained 0.3% to 9,737 on Monday, with mainland stocks hitting multi-month highs as the People’s Bank of China kept its one- and five-year loan prime rates unchanged at 3.45% and 3.95%, respectively, in line with expectations. Late last week, China also announced a broad package to support its struggling property market, including the relaxation of mortgage rules and urging local governments to buy unsold homes. Notable gains were seen from heavyweight firms such as Zijin Mining (3.7%), CMOC Group (2.3%), Zhongji Innolight (2.5%), Contemporary Amperex (1.2%)and Wuliangye Yibin (1.1%). Meanwhile, investors took some profits in property stocks after a strong rally last week, with losses from China Vanke (-0.7%), Poly Developments (-1.8%) and Hangzhou Binjiang (-1.2%).

🇮🇩 Indonesia Posts Largest Current Account Gap in 3 Quarters

Indonesia registered a current account deficit of USD 2.16 billion in the first quarter of 2024 (0.6% of GDP), shifting from a surplus of USD 2.78 billion in the same period of the previous year. It was the fourth straight quarter of gaps in the current account and the most since Q2 of 2023, as the trade surplus narrowed sharply to USD 9.82 billion in Q1 of 2024 from USD 14.72 billion in the same period of 2023, amid moderating commodity prices. Simultaneously, the shortfall of primary income slightly increased to USD 8.94 billion in Q1 of 2024 from USD 8.85 billion, while the secondary income surplus declined to USD 1.38 billion from a prior USD 1.45 billion gain. Meantime, the services account gap decreased to USD 4.42 billion from USD 5.54 billion.

Palm Oil Extends Rise

Malaysian palm oil futures hovered above MYR 3,900 per tonne, rising for the second straight session amid soybean oil's strength on the Chicago Board of Trade. Meanwhile, bets grew that shipments will improve, supported by signs of increased exports to key buyer China and some countries across Africa. At the same time, crude oil prices continued to rise, due to political uncertainty in a major oil-producing nation after a helicopter carrying Iranian President Ebrahim Raisi crashed over the weekend with "no sign of life" detected. The contracts tried to move away from their lowest level in 3-1/2 months, buoyed by robust demand from top buyer India. The country's palm oil imports grew to their highest level in three months during April, as lower prices attracted buyers. Capping the upside momentum was expectations of higher output, at least in the near term. The Southern Peninsula Palm Oil Millers Association reported a 56% on-month jump in CPO production for May 1-15.

European Markets Head for Higher Open

European equity markets were headed for a higher open on Monday, tracking global peers higher as signs of cooling inflation in the US cemented expectations that the Federal Reserve will start cutting interest rates this year. Meanwhile, investors monitored developments in the Middle East after Iranian state media reported that President Ebrahim Raisi was killed in a helicopter crash. In Europe, investors will assess Italian construction output and Spanish trade data for March, while Ryanair will report quarterly earnings. Euro Stoxx 50 futures rose 0.2% in premarket trade.

Silver Rises to 2012-Highs

Silver prices rose to $31.6 per ounce, the highest level since December 2012, pushing year-to-date gains to nearly 33%. The rise in silver prices is closely tied to the upward trend in the gold market, amid optimism the Fed will soon start cutting interest rates, with the first reduction seen starting as early as September. Geopolitical tensions in the Middle East have also boosted the appeal of silver as a safe-haven asset, after Iranian President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian died in a helicopter crash. Meanwhile, robust investment and industrial demand have also been weighing on the silver market, as the white metal continues to benefit from its use in solar panels, which is expected to reach a record this year and push the silver market into its fourth consecutive deficit.

🇨🇿 Czechia Producer Inflation Accelerates in April

The annual producer inflation in the Czech Republic accelerated to 1.4% in April 2024, after showing no growth in the previous month. This marked the first price increase since December 2023, as prices rebounded for manufacturing (0.3% vs -0.9% in March). Simultaneously, prices advanced further for electricity, gas, steam and air conditioning (5.1% vs 2.6%), while remained unchanged for water supply (at 9.2%). Meanwhile, producer deflation continued for mining and quarrying (-1.3% vs -2%). On a monthly basis, producer prices rose by 0.2%, rebounding from a 0.1% fall in the previous period.

🇬🇧 FTSE 100 Approaches New Record

The FTSE 100 edged higher to the 8,440 mark on Monday, approaching the record high touched last week with support from the heavyweight mining sector as markets continued to assess the extent of rate cuts to be delivered by the Fed and the BoE. Fresnillo led the gains with a 3.5% surge, further benefitting from the rally in silver prices amid hopes of dovish pivots from central banks and the metal’s utility in electrification. Industrial miners also traded sharply higher, with Antofagasta, Glencore, and Anglo American adding between 1.5% and 1% on continued hopes that a series of economic support measures in China will translate to higher base and ferrous metal demand. In the meantime, banks were mostly in the green with Barclays, Standard Chartered, and Lloyds adding more than 0.5%. On the other hand, developers were mixed after a survey from Rightmove showed that asking prices for homes hit a new record high. British Land and Barratt traded in the red, while Persimmon edged higher.

🇿🇦 South African Stocks Rally Continues

The JSE index was slightly up around 79,880 on Monday, hovering near 1-1/2-year highs and extending gains for the fourth consecutive session. Resource-linked stocks provided the main support, rising nearly 2%, amid expectations that US rates will start to fall soon.

🇮🇹 Italy Construction Growth at 10-Month Low

The construction output in Italy increased by 3.8% yoy in March 2024, slowing from an upwardly revised 7.4% surge and marking the slowest expansion since May 2023. On a monthly basis, construction activity declined by 1.9%, from a 3% drop in the prior period. On average for the January-March 2024 quarter, it grew by 1.5% compared to the previous quarter.