MNI US OPEN - KRW Rallies After FX Policy Discusions With US
EXECUTIVE SUMMARY
- US, KOREA SAID TO HAVE DISCUSSED FX POLICY
- TRUMP PARTICIPATES IN GCC SUMMIT AFTER MEETING SYRIAN PRESIDENT
- INDIA SIGNALS TOUGHER US TRADE STANCE AS CHINA’S TACTIC PAYS OFF
- GERMAN CPI DETAILS SUGGEST INTACT UNDERLYING DISINFLATION
Figure 1: CNY fix on strong side of estimates by greatest margin in over two years
Source: MNI/Bloomberg
NEWS
US/S.KOREA (BBG): US, Korea Said to Have Discussed FX Policy on May 5 in Milan
US and South Korea agreed to share a mutual understanding of the principles they hold for operating foreign exchange markets and to continue discussions on FX policy, according to a person familiar with the matter. South Korean deputy finance minister Choi Ji-young met Robert Kaproth, Assistant Secretary for International Finance in the US Treasury department, on May 5th in Milan, the person said, declining to be named as they weren’t authorized to speak publicly about it.
US/MIDEAST (MNI): Trump Participates in GCC Summit After Meeting Syrian President
US President Donald Trump is participating in the Gulf Cooperation Council summit in Riyadh, Saudi Arabia. This follows a brief one-on-one between Trump and the new Syrian President, Ahmed al-Sharaa. Reuters reports MbS saying that the Gulf Cooperation Council (GCC) "seeks to work with the US to de-escalate tensions in the region". Says that "We commend President Trump's decision to lift sanctions on Syria". Says he will work with the US to "end" the war in Gaza, and on "finding a comprehensive lasting solution" for the Palestinian people. Trump says he wants to see a "peaceful, prosperous Middle East".
US/IRAN (NYT): Iran Proposes Novel Path to Nuclear Deal With U.S.
Iran has proposed the creation of a joint nuclear enrichment venture involving regional Arab countries and American investments as an alternative to Washington’s demand that it dismantle its nuclear program, according to four Iranian officials familiar with the plan. Iran’s foreign minister, Abbas Araghchi, proposed the idea to an American special envoy, Steve Witkoff, when the two men held direct and indirect talks in Oman on Sunday, according to the four Iranian officials. They asked not to be named because they were discussing sensitive issues.
US/INDIA (BBG): India Signals Tougher US Trade Stance as China’s Tactic Pays Off
Indian officials said trade talks with the US remain on track, although there are signs that New Delhi is adopting a tougher approach in negotiations, following China’s defiance of US President Donald Trump. Trade talks between India and the US are progressing smoothly, with the first tranche of a deal expected by fall, according to people familiar with the discussions. However, it’s unclear if India can secure an interim deal by early July, when Trump’s reciprocal tariffs are expected to kick in, the people said, asking not to be identified because the matter isn’t public.
ECB (MNI): Uncertainty to Persist Despite US-China Talks - Nagel
Uncertainty is the new normal for the world economy and will not dissipate any time soon despite the progress in U.S.-China trade talks, Bundesbank president Joachim Nagel said on Wednesday. “We are not in a path that will end up in a fixed point,” Nagel said in an event in Spain alongside Bank of Spain Governor Jose Luis Escriva. The European Central Bank will decide on lowering or holding interest rates in June depending on data, he said, adding that future path of rates is open.
EUROPE (MNI): German/EU Target Russian Energy, Shipping, Banking via Sanctions
The German government and European Union target the Russian energy, shipping, and banking sectors with further sanctions given Russia does not accept their demand of a ceasefire in the Ukraine conflict, according to a Bild report. "In the shipping sector, ship insurance for shipping companies and ships in the so-called shadow fleet, through which Russia illegally ships oil in violation of the sanctions, are to be targeted in particular."
EU COMMISSION (MNI): Blow for VdL as Court Rules Pfizer Texts Must Be Released
The European Court of Justice's lower General Court has found in favour of the New York Times in its battle with the European Commission as it attempts to force Commission President Ursula von der Leyen to publish text messages between her and Pfizer CEO Albert Bourla during the period in which she and others in the Commission were negotiating a multi-billion euro contract for COVID-19 vaccines with the pharmaceuticals giant. The Court rules that the Commission "has not given a plausible explanation to justify the non-possession of the requested documents [the texts]".
RIKSBANK (MNI): Dovish Feel to Riksbank Minutes Even if Rate Guidance Lacking
Although the Riksbank Executive Board were non-committal with respect to the timing of any future rate cuts, the lean of the May meeting minutes was dovish, perhaps more so than the policy statement portrayed. Although some members highlighted that the overall risks to inflation may be two-sided, the recent union wage bargaining round (Breman, Bunge, Thedeen) and stronger krona (Breman, Bunge, Jansson, Thedeen) were cited several times as inflation dampeners.
GERMANY/CHINA (MNI EXCLUSIVE): German FDI in China to Remain Strong - Chamber
A leading German industry leader in China provides insight into German FDI. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.
GERMANY (MNI): Merz to Hold First Government Declaration at 12:00 BST
German Chancellor Merz is scheduled hold his first government declaration today at 12:00 BST. The declaration will be resembling an 'Agenda 2030' according to prior comments of CDU General Secretary Linnemann, focussing on energy cost and tax cuts as well as skilled worker shortage and bureaucracy reduction. We assume the announcement will bolster plans lined out in the coalition agreement and earlier media reports. The measures do appear reasonable in principle but the success of especially the bureaucracy reduction plans will also depend on their implementation.
UK/CHINA (FT): China Attacks UK Trade Deal With US
China has criticised a trade deal between the UK and US that could be used to squeeze Chinese products out of British supply chains, complicating London’s efforts to rebuild relations with Beijing. Asked about the deal, Beijing said it was a “basic principle” that agreements between countries should not target other nations. “Co-operation between states should not be conducted against or to the detriment of the interests of third parties,” China’s foreign ministry told the Financial Times.
UK/EU (FT): Starmer Set for Final Round of Talks in Albania on EU-UK Reset
Sir Keir Starmer will hold eleventh-hour talks with EU leaders in Albania this week to finalise a reset of post-Brexit relations, as haggling over the details comes to a head. With less than a week to go until the EU-UK summit on May 19 in London, both sides remain locked in discussions over fisheries, youth mobility, student access and a new agrifood trade deal, according to people with knowledge of the talks.
CHINA (BBG): China Leads One of Busiest Days This Year for Asia Bond Sales
Chinese borrowers led a flurry of dollar bond deals in one of the busiest days in Asia this year, as a de-escalation in trade tensions boosted sentiment in credit markets. At least six borrowers are looking to price their US-currency offerings Wednesday in Asia ex-Japan, with three from China and one from Hong Kong. The last time six borrowers marketed dollar offerings in 2025 was on March 25, according to Bloomberg-compiled data of deals with a minimum size of $100 million.
RBA (MNI EXCLUSIVE): RBA to Chart Neutral Path as Global Concerns Mount
MNI discusses the RBA's future easing path. On MNI Policy MainWire now, for more details please contact sales@marketnews.com.
DATA
GERMANY DATA (MNI): German CPI Details Suggest Intact Underlying Disinflation
- GERMANY APRIL HICP 2.2% Y/Y (2.2% FLASH; 2.3% MARCH)
German final April HICP was unrevised from the flash readings at 2.2% Y/Y (2.3% prior) and 0.5% M/M (0.4% prior). The final reading to CPI was also unrevised at 2.1% Y/Y (2.2% prior) and 0.4% M/M (0.3% prior). Core CPI accelerated 0.3pp to 2.9% Y/Y, a rate not seen since January. Overall, the data confirms the main conclusions from the flash / state-level reading - services accelerated materially (contribution +0.20pp vs prior) on the back of the Easter effect while goods inflation slowed (contribution -0.25pp vs prior) following lower energy prices.
SPAIN DATA (MNI): Spanish Services Stickiness Evident Beyond Easter Effects
- SPAIN APR HICP +0.6% M/M, +2.2% Y/Y
Spanish April HICP inflation confirmed flash estimates at a rounded 2.2% Y/Y, printing at 2.24% Y/Y (vs 2.22% prior). A reminder that this was above the initial 2.0% consensus. Core HICP (excluding energy and unprocessed food) rose to 2.53% Y/Y (vs 2.00% prior), with services at 4.13% Y/Y (vs 3.11% prior) and core goods at 0.30% (vs 0.20% prior). As expected, the timing of Easter pushed travel sensitive services components higher. Airfare inflation was 19.3% Y/Y (vs 1.6% prior), package holidays rose to 13.7% Y/Y (vs -2.8% prior) and accommodation services ticked up to 10.0% Y/Y (vs 5.2% prior).
SWEDEN DATA (MNI): Final April CPIF Confirms Flash; Feels Supportive of Dovish RB Guidance
- SWEDEN FINAL APR CPIF +2.3% Y/Y
Swedish April CPIF ex-energy confirmed flash estimates at 3.10% unrounded, still up from 2.97% in March but slightly below the Riksbank's 3.15% projection from the March MPR. Overall, the details of the report feel supportive of the Riksbank's dovish guidance tilt at the May decision. As expected, the timing of Easter pushed up volatile travel-sensitive services items such as international flights (24.28% Y/Y vs -10.62% prior) and package holidays (11.22% Y/Y vs -1.61% prior).
JAPAN DATA (MNI): Japan April CGPI Rises 4.0% Y/Y; Import Price Drops
- JAPAN APRIL CORP GOODS PRICE INDEX +4.0% Y/Y; MAR +4.3%
- JAPAN APRIL CORP GOODS PRICE INDEX +0.2% M/M; MAR +0.4%
Japan’s Corporate Goods Price Index (CGPI) rose 4.0% year-on-year in April, slowing from a revised 4.3% increase in March, according to data released by the Bank of Japan on Wednesday. Import prices, measured in yen, fell 2.9% year-on-year – marking the third consecutive monthly decline following a 1.5% drop in March. The CGPI rose 0.2% month-on-month in April, down from a 0.4% gain in March. The slower annual increase was largely driven by weaker growth in petroleum and coal product prices (+6.6% vs. +8.8% in March) and a deeper contraction in iron and steel prices (-4.2% vs. -2.5%).
CHINA DATA (MNI): China's U.S. Exporters Increased Domestic Sales
MNI (Beijing) Chinese firms engaged in exports to the U.S. saw domestic sales revenue grow of 4.7% y/y in April, with domestic business as a share of total revenue increasing by 2 percentage points compared to Q1, according to data released by the State Taxation Administration on Wednesday. Among the 31 manufacturing categories, 21 saw U.S.-oriented exporters increase their proportion of domestic sales, the administration said. Nationwide national corporate sales revenue grew by 4.3% y/y in April, continuing the steady growth trend seen since Q4 last year, the administration added, noting the sales revenue in electrical machinery and computer manufacturing grew by 12.8% and 15.7%.
CHINA DATA (MNI): China April M2 Hits Over One-Year High
- CHINA JAN-APR TSF CNY16.34 TRLN VS MEDIAN CNY16.54 TRLN
- CHINA JAN-APR NEW LOANS CNY10.06 TRLN VS MEDIAN CNY10.47 TRLN
- CHINA END-APR M2 +8.0% Y/Y VS MEDIAN +7.2%; END-MAR +7.0% Y/Y
- CHINA END-APR M1 +1.5% Y/Y VS +1.6% Y/Y END-MAR
- CHINA END-APR M0 +12.0% Y/Y VS +11.5% Y/Y END-MAR
China's M2 money supply grew by 8.0% y/y in April, outpacing market forecasts of a 7.2% and rising from March's 7.0% to hit the highest level since March 2024, mainly due to lower comparison base same period last year, data released on Wednesday by the People's Bank of China showed. M1 money supply grew by 1.5% y/y, slowing from March's 1.6% growth. Banks extended CNY280 billion in new loans in April, seasonally declining from March's CNY3.64 trillion. Total social financing rose by CNY1.16 trillion, lower than growth of CNY5.89 trillion in March.
AUSTRALIA DATA (MNI): Aussie Wages Rise 0.9% Q/Q in Q1
The Wage Price Index (WPI) rose 0.9% in the March quarter, and 3.4% annually, data released by the Australian Bureau of Statistics showed Wednesday. “Annual wage growth ticked up for the first time since the June quarter 2024,” said Michelle Marquardt, head of prices statistics at the ABS. Seasonally adjusted private sector annual wage growth was unchanged from the December quarter at 3.3%, however annual public sector wage growth was higher than the private sector at 3.6% in the March quarter 2025, up from 2.9% in Q4.
FOREX: USD Slips, FX Strategy in Focus in Light Data Day
- An early phase of USD weakness came alongside reports that the US and South Korea had discussed FX policy as part of trade talks - a standout report considering negotiations with both Japan and China has explicitly not covered currency issues. The move in the greenback was isolated to currency markets given the relative stability in equities and the front-end of the US curve. EUR/USD showed to a new weekly high in response, but USD/JPY is more notable - the price is close to fully erasing the entirety of the China-triggered rally from early Monday morning on healthy volumes.
- USD/JPY slippage Wednesday confirms the bearish technical bias for the pair. A further reversal lower would refocus attention on 142.36, the May 6 low, below which April's pullback low comes into contention.
- EUR/AUD is firmer off lows into the NY crossover, however price printed a fresh monthly low at 1.7248 overnight, keeping focus on 1.7198, the 61.8% retracement of the upleg posted off the February low. A further stabilisation for equities here could see this level come under pressure.
- The data slate is clear Wednesday, leaving more focus on Trump's extended visit to the Middle-East and the central bank speaker schedule - Fed's Waller, Jefferson, Daly and Goolsbee are all set to make appearances, as well as ECB's Villeroy and Holzmann.
- Trump is continuing to talk up relations with Gulf allies, while adding further pressure to Tehran to conclude their commitment to nuclear weapons development in return for closer and freer ties with Western markets. Further negotiations between Tehran and Washington are set for the coming days - progress within which would represent any de-escalation of geopolitical tensions.
EGBS: 10-Year BTP/Bund Spread Tests 100bps Even as Equities Soften
The 10-year BTP/Bund spread briefly printed below the 100bp handle for the first time since September 2021, with recent tightening momentum persisting even as European equities soften on the session.
- Bund futures have traded in a tight 27 tick range today, currently -2 ticks at 129.54. The 50.0% retracement of the Mar 11 - Apr 7 rally at 129.28 contained downside earlier, but a short-term bearish theme remains intact.
- Bund yields are ~1bp lower across the curve. Today’s 30-year Bund auction was digested smoothly.
- Portugal also sold bonds today, while Belgium and Latvia are holding 5-year syndications. The EFSF has sent an RFP for an upcoming transaction, likely early next week.
- German and Spanish April HICP confirmed flash estimates on an annual basis.
- ECB’s Nagel didn’t add too much to the near-term policy debate. Cipollone, Villeroy and Holzmann are scheduled to speak later today.
GILTS: Support in Futures Pierced Before Recovery
Gilts have recovered from session lows, after being pressured by concession ahead of this morning’s 10-Year auction.
- Gilts based just ahead of the bidding deadline, with the auction generating solid demand metrics, despite the LAP printing comfortably below the pre-auction mids.
- Futures breached their April 15 low (91.43), basing at 91.39 before a recovery to 91.50.
- Yields effectively flat on the day across the curve.
- 2s continue to trade sub-4.00% after yesterday’s brief and limited break above.
- 10-Year yields have pierced the April 15 high (4.672%) during the past couple of sessions but haven’t meaningfully extended beyond that point.
- BoE-dated OIS little changed on the day, showing 47bp of cuts through year-end, with the next cut fully discounted through the end of the September MPC.
- SONIA futures little changed to 3.0 lower, terminal BoE pricing (proxied by SFIU6) sits at ~3.60%, 30bp above recent dovish extremes.
- Hawkish BoE dissenter Mann didn’t move markets as she outlined the reasoning behind her latest vote, while Deputy Governor Breeden didn’t touch on monetary policy.
- Macro and cross-market cues are eyed from here, with little of note on the UK calendar until tomorrow’s preliminary Q1 GDP data.
EQUITIES: E-Mini S&P Maintains Positive Tone Following Break of Bull Trigger
A bullish theme in the Eurostoxx 50 futures contract remains intact. Gains on Monday reinforce current bullish conditions. The contract is extending the recent breach of 5263.01, 76.4% of the Mar 3 - Apr 7 bear leg. The continuation higher signals scope for a climb towards 5516.00, the Mar 3 high and the key bull trigger. Initial firm support to watch lies at 5152.85, the 50-day EMA. Clearance of this level would signal a possible reversal. A bullish trend condition in S&P E-Minis remains intact and this week’s appreciation reinforces bullish conditions. The contract has cleared an important resistance at 5837.25, the Mar 25 high and a bull trigger. This strengthens the bullish theme, paving the way for a continuation near-term. Sights are on the 6000.00 handle next. Initial firm support to watch lies at 5648.28, the 50-day EMA.
- Japan's NIKKEI closed lower by 55.13 pts or -0.14% at 38128.13 and the TOPIX ended 8.85 pts lower or -0.32% at 2763.29.
- Elsewhere, in China the SHANGHAI closed higher by 29.077 pts or +0.86% at 3403.948 and the HANG SENG ended 532.38 pts higher or +2.3% at 23640.65.
- Across Europe, Germany's DAX trades lower by 66.65 pts or -0.28% at 23571.19, FTSE 100 lower by 1.44 pts or -0.02% at 8601.55, CAC 40 down 46.73 pts or -0.59% at 7827.1 and Euro Stoxx 50 down 27.33 pts or -0.5% at 5388.88.
- Dow Jones mini up 30 pts or +0.07% at 42260, S&P 500 mini up 1.25 pts or +0.02% at 5906, NASDAQ mini up 1.5 pts or +0.01% at 21280.5.
Time: 09:50 BST
COMMODITIES: Recent Pullback in Gold Considered Technically Corrective
A downtrend in WTI futures remains intact and S/T gains are considered corrective. For now, the corrective cycle remains in play and price has traded through the 20-day EMA. Key resistance to watch is $63.55, the 50-day EMA. It has been pierced, a clear break of it would highlight a stronger reversal. This would open $66.41, the Apr 4 high. For bears a reversal lower would refocus attention on $54.67, the Apr 9 low and bear trigger. The latest pullback in Gold still appears corrective. Key short-term support to watch is $3202.0, the May 1 low. A clear break of this level would undermine the short-term bullish theme and signal scope for a deeper retracement. This would open $3164.3, 61.8% of the Apr 7 - Apr 22 upleg. Note that the 50-day EMA is at $3164.5 - a key support too. The M/T trend remains bullish, a reversal would refocus attention on $3500.1, the Apr 22 high and bull trigger.
- WTI Crude down $0.34 or -0.53% at $63.33
- Natural Gas down $0.06 or -1.65% at $3.587
- Gold spot down $16.52 or -0.51% at $3233.28
- Copper up $0.15 or +0.03% at $472.45
- Silver down $0.08 or -0.24% at $32.835
- Platinum up $8.23 or +0.83% at $1000.16
Time: 09:50 BST
| Date | GMT/Local | Impact | Country | Event |
| 14/05/2025 | 1100/0700 | ** |  US | MBA Weekly Applications Index |
| 14/05/2025 | 1230/0830 | * |  CA | Building Permits |
| 14/05/2025 | 1240/1440 |  EU | ECB's Cipollone On Liquidity Issues Panel | |
| 14/05/2025 | 1310/0910 | US | Fed Vice Chair Philip Jefferson | |
| 14/05/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 14/05/2025 | 2140/1740 | US | San Francisco Fed's Mary Daly | |
| 15/05/2025 | 0130/1130 | *** |  AU | Labor Force Survey |
| 15/05/2025 | 0600/0700 | ** |  GB | UK Monthly GDP |
| 15/05/2025 | 0600/0700 | ** | GB | Index of Services |
| 15/05/2025 | 0600/0700 | *** | GB | Index of Production |
| 15/05/2025 | 0600/0700 | ** | GB | Output in the Construction Industry |
| 15/05/2025 | 0600/0700 | *** | GB | GDP First Estimate |
| 15/05/2025 | 0600/0800 | ** |  NO | Norway GDP |
| 15/05/2025 | 0600/0700 | ** | GB | Trade Balance |
| 15/05/2025 | 0645/0845 | *** |  FR | HICP (f) |
| 15/05/2025 | 0700/0900 |  CH | Flash GDP | |
| 15/05/2025 | 0700/0900 | EU | ECB's Cipollone at Payments Forum | |
| 15/05/2025 | 0750/0950 | EU | ECB's Elderson At Green Finance Conference | |
| 15/05/2025 | 0900/1100 | ** | EU | Industrial Production |
| 15/05/2025 | 0900/1100 | *** | EU | GDP (p) |
| 15/05/2025 | 1015/1215 | EU | ECB's De Guindos At ISDA Meeting | |
| 15/05/2025 | 1130/1330 | EU | ECB's Cipollone In Digital Currency Fireside Chat | |
| 15/05/2025 | 1215/0815 | ** | CA | CMHC Housing Starts |
| 15/05/2025 | 1230/0830 | *** | US | Jobless Claims |
| 15/05/2025 | 1230/0830 | ** | US | WASDE Weekly Import/Export |
| 15/05/2025 | 1230/0830 | ** | CA | Monthly Survey of Manufacturing |
| 15/05/2025 | 1230/0830 | ** | CA | Wholesale Trade |
| 15/05/2025 | 1230/0830 | *** | US | Retail Sales |
| 15/05/2025 | 1230/0830 | *** | US | PPI |
| 15/05/2025 | 1230/0830 | ** | US | Empire State Manufacturing Survey |
| 15/05/2025 | 1230/0830 | ** | US | Philadelphia Fed Manufacturing Index |
| 15/05/2025 | 1240/0840 | US | Fed Chair Jerome Powell | |
| 15/05/2025 | 1300/0900 | * | CA | CREA Existing Home Sales |
| 15/05/2025 | 1315/0915 | *** | US | Industrial Production |
| 15/05/2025 | 1400/1000 | * | US | Business Inventories |
| 15/05/2025 | 1400/1000 | ** | US | NAHB Home Builder Index |
| 15/05/2025 | 1400/1500 | GB | BOE Dhingra At New Economics Foundation conference | |
| 15/05/2025 | 1430/1030 | ** | US | Natural Gas Stocks |
| 15/05/2025 | 1530/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 15/05/2025 | 1530/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 15/05/2025 | 1800/1400 | *** |  MX | Mexico Interest Rate |
| 15/05/2025 | 1805/1405 | US | Fed Governor Michael Barr |
