In Today's Digital Newspaper U.S. core PCE inflation rises more than expected. Core PCE prices in the U.S., which exclude food and energy, rose by 0.4% month-over-month in April, above market expectations of 0.3%. The annual rate, the Federal Reserve's preferred gauge of inflation, inched up to 4.7%, also above market expectations of 4.6%.
Russia and China are looking to increase their trade in agricultural goods, with Russian Prime Minister Mikhail Mishustin stating that Russian farmers are prepared to significantly increase exports to China.North Africa is currently facing a significant drought that is severely impacting wheat harvests, leading to the region's largest record of imports. See Markets section.
Memorial Day weekend will kick off a busy summer travel season. Around 42 million people are expected to travel more than 50 miles from home, up 7% from last year. It will be another test for airlines and the FAA. Equities today: Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed toward mixed openings. In Asia, Japan +0.4%. Hong Kong -1.9%. China +0.4%. India +1%. In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt +0.1%.
• University of Michigan's consumer sentiment index for May is expected to hold at 57.7, unchanged from a preliminary reading. Inflation in Tokyo slowed more than expected in May, an outcome that offers support for the BOJ's view that price gains will slow toward the autumn. Consumer prices excluding fresh food climbed 3.2%, slowing from the previous month and coming in below consensus.
• The average price of unleaded gasoline in the U.S. was $3.57 a gallon on Thursday, according to energy-data and analytics provider OPIS, down from a record high above $5 a gallon last June. • North Africa is currently facing a significant drought that is severely impacting wheat harvests, leading to the region's largest record of imports. The drought is characterized as the "worst seasonal drought" in recent history by the European Union's Monitoring Agricultural Resources Unit. Wheat yields in Morocco, Algeria, and Tunisia are expected to fall 17% to 24% below the five-year average, with crop failures being a high probability in certain areas.
Footage has emerged of Wagner's leader, Yevgeny Prigozhin, indicating that the Russian Army should not expect further assistance from his group in Bakhmut. In the video, Prigozhin is seen visiting Wagner's positions in the city, instructing his fighters to turn them over to the Russian troops. He advises his men to "Leave them soap, but take away your toothbrushes," suggesting a complete withdrawal from the city.
While the western sanctions do not directly target food and fertilizers, there is considerable potential in these sectors. During the forum, wheat and meat shipments were reportedly on the agenda. This comes at a time when China is aiming to reduce its import reliance on crops like soybeans, primarily sourced from Brazil and the US, and needed to feed its substantial pork herds.
— U.S. Commerce Secretary Gina Raimondo and her Chinese counterpart Wang Wentao agreed to strengthen communications even as they traded complaints about each other's policies. Wang raised concerns about U.S. export controls in areas such as semiconductors, as well as a proposal to review outbound investments for security purposes, according to a statement from Beijing's ministry of commerce. The U.S. Commerce Dept.
The current strain in relations reflects South Korea's foreign policy shift under Yoon, who has aligned the country more closely with the U.S. and Japan, especially amidst tensions over North Korea's weapons testing. This tension was exacerbated by a Group of Seven summit in Hiroshima where leaders expressed serious concerns about the situation in the East and South China seas and called for peace and stability across the Taiwan Strait.