Supply Focus Turns To US Refundings As Europe Sees Heavy Cash Reinvestment.

Global sovereign supply picks up this week, led by the US Treasury’s quarterly-style refunding cycle, while Europe faces a moderate issuance slate offset by sizeable coupon and redemption flows.

Across the major jurisdictions, scheduled nominal issuance totals approximately USD 211bln in the US, EUR 16-18.5bln across Europe, and GBP 4-6bln in the UK, with Japan, Australia and New Zealand also active. (LS – Continue Reading)

Australia’s core inflation remained above the top of the Reserve Bank’s target in April, complicating policymakers’ task as signs emerge that rapid fire interest-rate hikes have begun to weigh on economic activity.

The closely-watched trimmed mean gauge of annual consumer-price growth, which shaves off volatile items, rose 3.4%, matching economists’ estimate, data from the Australian Bureau of Statistics showed Wednesday. The RBA aims for inflation at the midpoint of its 2-3% target band. (BBG – Continue Reading)

New Zealand’s central bank kept its benchmark interest rate unchanged on Wednesday, narrowly deciding to wait to see how the Middle East conflict affects inflation and an economy that has only recently shown signs of emerging from a prolonged downturn.

The Reserve Bank of New Zealand maintained the official cash rate at 2.25% for the third meeting in a row, as it weighs the threat to the South Pacific economy from higher prices of everything from motor fuels to freight against the damping effect rising inflation can have on demand. (WSJ – Continue Reading)

Bank of Japan Governor Kazuo Ueda said on Wednesday central banks should not look at oil prices in isolation because a temporary energy shock can become persistent if it feeds into wages, expectations, and price-setting behavior.

Comparing various energy shocks Japan experienced in past decades, Ueda said the same oil price increase can have very different effects on wages, expectations, demand and currency rates depending on the initial conditions at which they hit.

"If inflation expectations are already high and wages are accelerating, the risk of second-round effects is large," while a large cost shock may not raise inflation expectations if expectations are very low and wages are ⁠stagnant, he said. (RTRS – Continue Reading)