China trade data; Japan real wages drop again

Mainland China’s CSI 300 index rose nearly 1%, extending gains after opening 0.2% higher, as the country’s customs agency released upbeat trade data.

While April imports topped estimates, exports rose in line with expectations.

China’s imports climbed 8.4% in April, compared with Reuters poll estimate of a 4.8% year-on-year rise. Exports rose 1.5% year on year in April in US dollar terms, meeting expectations.

Exports and imports had both declined year on year in March.

— Shreyashi Sanyal, Evelyn Cheng

The Philippine economy grew at a slightly slower-than-expected pace in the first quarter of 2024, according to official data.

the economy expanded 5.7% year on year in the first quarter, slightly below a Reuters poll expectation of 5.9%.

The GDP reading for the first quarter was still higher than the prior quarter’s 5.5%.

The government also released consumer prices data which showed the Philippines’ headline inflation rose to 3.8% year on year in April from 3.7% in March 2024.

— Shreyashi Sanyal

Haruhiko Kuroda, governor of the Bank of Japan (BOJ), gestures while speaking during a news conference at the central bank’s headquarters in Tokyo, Japan, on Friday, March 18, 2022.

Kiyoshi Ota | Bloomberg | Getty Images

Bank of Japan could raise interest rates faster than what the market expectations, according to the summary of opinions from the central bank’s monetary policy meeting in April.

The bank said that there was “high uncertainty” about economic activity and prices that were forecast in April.

The bank in April raised its inflation for fiscal 2024, forecasting inflation between 2.5% and 3%, up from 2.2% to 2.5% forecast in January.

The BOJ said “if this outlook will be realized, then in about two years, the price stability target of 2% will be achieved in a sustainable and stable manner,” resulting in a future policy rate higher than what is being factored in by the market.

— Lim Hui Jie

Copper has been on fire, touching $10,000 per tonne this week.

Will McDonough CEO of merchant bank Corestone Capital says he has “not seen this level of interest and conversation on copper.”

“Copper is going through some serious spikes and prices are likely to be much higher in the future. I think it is the biggest investment opportunity right now,” he told CNBC Pro, naming stocks he is betting on right now.

CNBC Pro subscribers can read more here.

—Amala Balakrishner

Real wages in Japan fell 2.5% year on year in March, marking its 24th straight month of decline.

The 2.5% drop in March was faster than the 1.8% recorded in February, as rising costs outpaced nominal wages.

Nominal wages rose 0.6% compared to the same period last year, coming in at 301,193 yen ($1,938.66) and slowing from the 1.4% rise seen in February.

— Lim Hui Jie

Mitsubishi Motors Corp shares fell 5% in early trading after the Japanese automaker forecast lower earnings for the current fiscal year.

Mitsubishi on Wednesday said it expected a net profit of 144 billion yen ($926,784.06) in the fiscal year ending March 2025, which is about 7% lower than its 154.71 billion yen net profit last year.

Toyota Motor Corp on Wednesday forecast lower operating profit for its current financial year as well.

The broader Topix index was 0.4% higher on the day.

— Shreyashi Sanyal

Several risks could still affect the market’s momentum, according to UBS.

“While we continue to see a constructive macro backdrop for risk assets, investors should remain vigilant on a range of economic and geopolitical risks that could send market volatility back up again,” said Mark Haefele, chief investment officer for the firm’s global wealth management.

Haefele pointed out that despite the recent gains in US equities, including the S&P 500 having recorded its best four-day rally since November on the back of positive Fed speak, several concerns remain that could risk oil prices and increase investor concerns. Those include the ongoing uncertainty of a cease-fire deal in Gaza, a potentially “vulnerable” disinflation trend and the upcoming US presidential election.

“With markets oscillating between pricing different scenarios, asset class volatility could remain elevated. Investors can mitigate such volatility and keep their portfolios on track by diversifying and balancing across asset classes,” the investment head said in the Wednesday note, adding that quality bonds in a portfolio, and oil and gold for portfolio hedges, are attractive plays for investors in this environment.

— Pia Singh

A general view of the Phillips 66’s Los Angeles Refinery, which processes domestic and imported crude oil into gasoline, diesel fuel and other petroleum products, in Carson, California.

Bing Guan | Reuters

Crude oil futures rose Wednesday, recovering losses from earlier in the session as US crude inventories fell.

The West Texas Intermediate contract for June rose 61 cents, or 0.78%, to settle at $78.99 a barrel. The Brent contract for July was last trading at $83.75 a barrel, up 59 cents, or 0.72%.

Oil was down more than 1% earlier in the session, after US commercial crude stockpiles declined by 1.4 million barrels in the first week of May, according to official data from the Energy Information Administration. The decline was a surprise compared to industry data that indicated a 509,000 barrel buildup.

Oil prices have fallen nearly 7% since reaching their April highs when traders bid up prices on fears that Iran and Israel would go to war. Investors have largely sold off the war premium since then, with Morgan Stanley removing $4 per barrel of risk from its oil price forecast for the year.

—Spencer Kimball

Susan Collins, president of the Federal Reserve Bank of Boston, speaks during the National Association of Business Economics Economic Policy Conference in Washington, DC, on March 30, 2023.

Ting Shen | Bloomberg | Getty Images

Boston Fed President Susan Collins said Wednesday that it is likely to take longer than expected to get inflation back down to the central bank’s goal, but noted that policymakers should be wary not to wait too long to start normalizing interest rates.

“The recent upward surprises to activity and inflation suggest the likely need to keep policy at its current level until we have greater confidence that inflation is moving sustainably toward 2 percent,” Collins said in remarks at the Massachusetts Institute of Technology.

As she examines the conditions that will need to fall into place before cutting, Collins said she is focused on inflation expectations, more signs of disinflation, signals from wages and moderation in the labor market.

“The current situation requires methodical perseverance, recognizing that progress will take time and continue to be uneven. Expecting all indicators to be well-aligned is too high a bar to start normalizing policy,” Collins added.

Current Fed policy is “well-positioned” as the various pieces of information develop, she said.

—Jeff Cox