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Asian Shares Advance As Fed Jitters Ease

Asian stocks advanced on Tuesday after New York Fed President John Williams noted the recent inflation surge is likely a temporary phase, helping ease investor concerns about the pace of expected monetary tightening.

Chinese shares ended notably higher, with the benchmark Shanghai Composite index rising 28.23 points, or 0.80 percent, to 3,557.41. Hong Kong’s Hang Seng index dropped 179.24 points, or 0.63 percent, to 28,309.76.

Japanese shares posted strong gains on economic recovery hopes. The Nikkei average jumped 873.20 points, or 3.12 percent, to 28,884.13, marking its biggest percentage gain since June last year. The broader Topix index closed 3.2 percent higher at 1,959.53, reversing Monday’s 2.4 percent slide.

Shipping stocks surged, with Mitsui OSK Lines climbing more than 10 percent after the company more than tripled its half-yearly net profit forecast. Rivals Kawasaki Kisen and Nippon Yusen also gained more than 10 percent each.

Automaker Suzuki Motor surged 7.4 percent, Honda Motor rallied 3.6 percent and Toyota Motor added 3.3 percent as the yen fell against the dollar on improved risk sentiment.

Market heavyweight SoftBank Group advanced 1.9 percent and Uniqlo operator Fast Retailing climbed 3.1 percent.

Australian markets rallied as investors favored value stocks on hopes they will do well in an economic recovery. The benchmark S&P/ASX 200 index climbed 106.90 points, or 1.48 percent, to 7,342.20 while the broader All Ordinaries index ended up 107.50 points, or 1.44 percent, at 7,592.70.

Energy stocks such as Woodside Petroleum and Santos jumped 2-3 percent as Brent oil hit $75 a barrel for the first time in more than two years amid signs of a rapidly tightening market.

The big four banks rose 1-2 percent while mining heavyweights BHP and Rio Tinto rallied 2.4 percent and 1.6 percent, respectively. Gold miner IGO surged 6.2 percent after saying it plans to invest A$1.4 billion into its local unit.

Seoul stocks rebounded on expectations the Fed is going to be relatively slow in tapering its asset purchase program. The Kospi average inched up 23.09 points, or 0.71 percent, to 3,263.88. Automaker Hyundai Motor jumped 3.4 percent and chemical firm LG Chem advanced 2.4 percent.

Producer prices in South Korea were up 6.4 percent year-on-year in May, the Bank of Korea said – accelerating from the upwardly revised 6.0 percent increase in April.

New Zealand shares eked out modest gains, with the benchmark NZX 50 index finishing up 35.44 points, or 0.28 percent, at 12,534.80. Fisher & Paykel Healthcare gained 1.9 percent, while Trustpower slumped 4.3 percent, a day after it agreed to sell its electricity, gas, broadband and mobile retail business.

U.S. stocks advanced overnight as banks and energy companies recovered some of last week’s steep losses following the Federal Reserve policy update.

U.S. Treasury yields dropped and the dollar’s rally paused after New York Federal Reserve Bank President John Williams said that the current economic recovery may be choppy and that he isn’t ready for the U.S. central bank to dial back the support it is giving the economy.

The Dow rallied as much as 1.8 percent to snap its five-day losing streak and post its best performance since early March, while the S&P 500 climbed 1.4 percent and the tech-heavy Nasdaq Composite index rose 0.8 percent.

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Swedish Jobless Rate Rises In May

Sweden’s jobless rate increased in May, figures from Statistics Sweden showed on Tuesday.

The jobless rate rose to 9.8 percent in May from 9.4 percent in April.

The number of unemployed persons decreased to 546,100 in May from 521,000 in the previous month.

The youth unemployment rate, which is applied to the 15-24 age group, fell to 30.5 percent in May from 31.2 percent in the prior month.

The employment rate increased to 67.2 percent in May from 66.8 percent in April. The number of employed persons was 5.051 million. On a seasonally adjusted basis, the unemployment rate was 9.1 percent in May.

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Turkish Consumer Confidence Improves In June

Turkey’s consumer confidence improved in June, survey results from the Turkish Statistical Institute showed on Tuesday.

The consumer confidence index rose to 81.7 in June from 77.3 in May.

The survey was carried out in cooperation with the Turkish Statistical Institute and the Central Bank of the Republic of Turkey.

The assessment of the present financial situation of household fell to 61.0 in June from 61.5 in May.

The financial situation expectation of households increased to 82.9 in June from 76.6 in the previous month.

The general economic situation expectation index grew to 86.0 in June from 78.8 in the prior month.

Assessment on spending money on durable goods index over next 12 months rose to 96.9 from 92.2 in May.

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UK Budget Deficit Narrows In May

The UK budget deficit narrowed in May from the last year, data from the Office for National Statistics showed on Tuesday.

Public sector net borrowing decreased to GBP 24.33 billion in May from GBP 43.76 billion in the previous year. The deficit was also below the economists’ forecast of GBP 26.1 billion.

Nonetheless, this was the second highest May borrowing since records began in 1993.

In the financial year-to-May, PSNB was estimated at GBP 53.4 billion, the second-highest financial year-to-May borrowing since monthly records began in 1993 and was GBP 37.7 billion less than in the same period last year.

Excluding banks, public sector net debt came in at GBP 2,195.8 billion at the end of May, or around 99.2 percent of GDP, the highest ratio since the 99.5 percent recorded in March 1962.

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Danish Consumer Confidence Weakens In June

Denmark consumer confidence weakened in June, survey data from Statistics Denmark showed on Tuesday.

The consumer confidence index fell to 2.3 in June from 2.8 in May. The average for the past six months was -1.7.

The index measuring consumers’ view regarding the future personal financial situation decreased to 12.4 in June from 14.4 in the preceding month.

The measure reflecting the past personal financial situation fell to 6.3 in June from 7.8 in the prior month.

Households’ assessment regarding the general economic situation of the country over the next year expanded to 10.4 in June from 8.5 in May.

The index reflecting the view on the past general economic situation improved to -10.3 from -16.7 May.

Consumers were more negative toward the big purchases in June as the index decreased to -7.6 from -0.3 in the previous month.

They expect the unemployment to decrease over the next year.

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Finnish Jobless Rate Falls In May

Finland’s jobless rate decreased in May, figures from Statistics Finland showed on Tuesday.

The unemployment rate for the 15 to 74 age group fell to 9.6 percent in May from 10.9 percent in the same month last year. In April, jobless rate was 9.0 percent.

The number of unemployed persons decreased by 25,000 to 275,000 in May from 300,000 in the last year.

The employment rate rose to 73.0 percent in May from 69.1 percent in the same month last year. The number of employed persons grew by 138,000 from a year ago to 2.58 million.

On a seasonally adjusted basis, unemployment rate remained unchanged at 7.6 percent in May.

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The Central Bank of Brazil Raises Key Interest Rate

Brazil’s central bank lifted its key interest rate by 75 basis points and signaled another rate hike of the same magnitude at the next meeting.

The monetary policy committee, known as Copom, unanimously decided to increase the Selic rate to 4.25 percent from 3.50 percent.

The bank has raised the rate by a cumulative 225 basis points so far this year. “The Committee judges that this decision reflects its baseline scenario for prospective inflation, a higher-than-usual variance in the balance of risks, and it is consistent with the convergence of inflation to its target over the relevant horizon for monetary policy, which includes 2022,” the bank said in a statement.

Policymakers viewed that the rate hike is necessary to mitigate the dissemination of the temporary shocks to inflation.

For the next meeting, the committee foresees the continuation of the monetary normalization process with another adjustment of the same magnitude.

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Australian Jobless Rate Drops To 5.1% In May

The jobless rate in Australia came in at a seasonally adjusted 5.1 percent in May, the Australian Bureau of Statistics said on Thursday – well below expectations for 5.5 percent, which would have been unchanged from the April reading.

The Australian economy added 115,200 jobs last month to 13,125,100, blowing away forecasts for an increase of 30,000 following the loss of 30,600 in the previous month.

Full-time employment gained 97,500 jobs in May after adding 33,800 in April. Part-time employment gained 17,700 after shedding 64,400 jobs in the previous month.

The participation rate was 66.2 percent, exceeding expectations for 66.1 percent and up from 66.0 percent a month earlier.

Unemployed people decreased by 53,000 to 701,100, while the youth unemployment rate increased by 0.1 percent to 10.7 percent.

Monthly hours worked in all jobs increased by 25.2 million hours (1.4 percent) to 1,814 million hours, while the underemployment rate decreased by 0.3 percent to 7.4 percent.

The unemployment rate was 1.9 percent lower than May 2020; over the year to May 2021, employment increased by 987,200 people (8.1 percent).

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Singapore’s Non-Oil Domestic Exports Dip 0.1% In May

The value of Singapore’s non-oil domestic exports were down a seasonally adjusted 0.1 percent on month in May, Enterprise Singapore said on Thursday – coming in at SGD15.4 billion.

That was well shy of expectations for an increase of 4.7 percent following the 8.8 percent decline in April.

On a yearly basis, NODX climbed 8.8 percent – missing forecasts for an increase of 16.0 percent following the 6.0 percent increase in the previous month.

NODX to the top 10 markets as a whole rose in May, mainly due to China, Hong Kong and Malaysia – although NODX to the United States, Japan and the EU 27 declined.

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UK Inflation Exceeds 2% In May

UK consumer price inflation exceeded the central bank’s target in May, data released by the Office for National Statistics showed on Wednesday.

Consumer price inflation accelerated to 2.1 percent in May from 1.5 percent in April. This was above economists’ forecast of 1.8 percent and the Bank of England’s target of 2 percent.

Excluding volatile energy, food, alcoholic beverages and tobacco prices, core inflation rose to 2 percent in May from 1.3 percent in April. The rate was forecast to rise to 1.5 percent.

The monthly growth in consumer prices held steady at 0.6 percent, while it was forecast to ease to 0.3 percent.

Another report from the ONS showed that output price inflation came in at 4.6 percent versus 4.0 percent in April and economists’ forecast of 4.5 percent.

At the same time, input price inflation increased to 10.7 percent from 10.0 percent in April. This was the highest rate since September 2011 and above the expected rate of 10.6 percent.

Month-on-month, output prices gained 0.5 percent, slightly faster than the 0.4 percent rise seen in April. At the same time, input price growth slowed marginally to 1.1 percent from 1.2 percent.