Sticky

• The 30-year Treasury bond futures market has declined throughout the year as investors demand higher yields to hold long-duration government debt. • Persistent inflation and elevated oil prices, driven by a six-month conflict between the U.S. and Iran, are putting upward pressure on bond yields. • Federal Reserve Chair Kevin Warsh faces internal division between "hawks" advocating for rate hikes and those urging patience due to a softening labor market.

• The U.S. Personal Consumption Expenditure (PCE) price index for May met expectations, with headline inflation at 4.1% and core inflation at 3.4%. • Consumer spending rose by 0.7%, exceeding the 0.6% forecast, while personal income accelerated sharply by 0.7%, significantly beating the 0.4% consensus estimate. • This resilience in consumer demand and income growth suggests that households can sustain spending despite elevated borrowing costs.

• World stocks and the MSCI Asia ex-Japan index reached record highs as AI-driven investment expanded from tech giants into small-cap sectors. • Alphabet's US$80 billion capital raise underscores the massive spending requirements for AI infrastructure despite a backdrop of sticky global inflation. • Market momentum was bolstered by a significant 4.0% single-session surge in South Korea on Monday, with current rotation shifting toward Hong Kong and China's "A" shares.

Volunteers head to Dorset countryside to restore the figure, but increasing heat means techniques have had to be adaptedFor centuries, the custodians of the Cerne Giant have clambered up the dizzyingly steep hill every decade or so to rechalk the outline, making sure the hulking figure can be seen far and wide across the rolling Dorset countryside.But the painstaking job, which involves hacking out the grubby old chalk by hand and packing in fresh, felt all the more urgent this week because effects put down to the climate emergency are making the giant a little duller and perhaps a touch more fragile. Continue reading...

• Federal Reserve policymakers indicated Wednesday they are unlikely to cut interest rates in the near term, citing persistent inflation pressures that exceed the central bank's 2% target. • Multiple Fed officials, including those from major regional banks, cited "hotter-than-expected" March inflation readings as justification for holding rates steady through at least mid-2026. • Market expectations for rate cuts have shifted significantly, with futures traders now pricing in the first possible cut in September 2026 rather than June, reflecting the hawkish pivot.