Watch For:

UK public sector finances, PPI, CPI; trading updates from Marks & Spencer, British Land, Severn Trent, SSE, RS Group

Opening Call:

Shares seem set to rise in Europe on Wednesday. In Asia, stock benchmarks were mixed; Treasury yields were barely changed; the dollar was flat; while oil and gold fell.


European shares could head higher on Wednesday ahead of the release of U.K. inflation data, along with U.S. housing numbers and the Fed minutes, due later in the day.

U.K. inflation is expected to decelerate, coming close to 2% in April, and could be a key indicator of whether the Bank of England will cut interest rates in June or in August.

Meanwhile, BOE Gov. Andrew Bailey said Tuesday that the next move in the BOE's key interest rate will be a cut, but it remains unclear when the decision to lower borrowing costs will be taken.

The BOE's policy makers next meet in late June, and then in early August.

Investors are also waiting for closely watched chip maker Nvidia to release its quarterly earnings results Wednesday.


The dollar was flat in Asia amid a lack of top-tier data and continued lack of conviction on possible divergence in central bank policy outlook, MUFG Bank said.

While there are differences in key central bank expectations, those differences aren't enough to fuel big forex moves, MUFG said.

Major central banks are expected to cut by two to three times, it said.


Treasury yields were barely changed ahead of U.S. housing data and the Fed minutes.

April existing home sales are expected to have expanded 1.4% after contracting 4.3% in March, in a Wall Street Journal poll.

The minutes are due at 2 pm ET and investors will be looking for hints about upcoming rate moves.


Oil prices fell, with traders concerned about the outlook for crude demand as the Fed maintains higher interest rates.

The main driver for oil prices right now is "worry about the economy, and the potential that [interest] rates will remain elevated," said Strategic Energy & Economic Research.

The market had no lasting reaction Monday to the death of Iranian President Ebrahim Raisi, who was killed in a helicopter crash along with the nation's foreign minister and others.


Gold prices weakened amid cautious sentiment after easing from recent highs.

Investors are reassessing the Fed's rate cut timeline after hawkish commentary from Fed officials, ANZ Research said.

Fed Gov. Christopher Waller says he needs to see several more months of progress on inflation to support rate cuts.

Meanwhile, Atlanta Fed President Raphael Bostic noted the Fed is rethinking its view on the neutral policy rate.


Copper prices were lower.

The recent rally has cooled down as the fundamentals of copper remain weak.

Traders are warning that demand remains tepid due to high housing inventories in China, ANZ Research said.

It added that China's property crisis continues with its land sales falling to an eight-year low.


Fed Is In 'Risk Management' Mode with Rate Policy, Regional Presidents Say.

Federal Reserve officials continued to preach patience on Tuesday night, saying they are still looking to gather more information to gain greater clarity around the future path of inflation.

Until they do, the risk of keeping the benchmark federal funds rate steady is fairly minimal, said a trio of Federal Reserve Bank presidents, given that the current rate is positioned to provide flexibility.

Chinese Business Group Warns of Tariff Increases on Car Imports in Response to U.S., EU Moves

A Chinese business group warned of possible tariff increases on car imports in retaliation for moves taken by the U.S. and European Union on Chinese electric vehicles, as trade tensions escalate between China and the West.

The Brussels-based China Chamber of Commerce to the EU said in a statement Tuesday that it had been informed by insiders that Beijing is considering temporary extra tariffs on imported cars equipped with large-displacement engines.

Secretive Son of Iran's Supreme Leader Quietly Wields Power After President's Death

As the death of Iranian President Ebrahim Raisi brings forward urgent questions surrounding the country's leadership, Mojtaba Khamenei, the powerful and secretive son of Supreme Leader Ali Khamenei, is poised to play a central role.

To most Iranians, the son is an enigma. He holds no public position, rarely appears in public and doesn't give speeches. With decadeslong ties to key figures in Iran's intelligence and security establishment, the younger Khamenei has grown powerful in the shadows, particularly under Raisi, who was seen as a pliant president without a personal power base.

U.S. Says Historic Israel-Saudi Normalization Deal Within Reach but Israel Might Balk

WASHINGTON-Biden administration officials said Tuesday that a U.S.-brokered deal to normalize relations between Israel and Saudi Arabia was within reach, but that Prime Minister Benjamin Netanyahu's government might balk at the historic agreement rather than accept Riyadh's demands for a new commitment to a Palestinian state and a halt to the Gaza war.

"The Saudis have been clear that [normalization] would require calm in Gaza and it would require a credible pathway to a Palestinian state," Secretary of State Antony Blinken told the Senate Foreign Relations Committee Tuesday. "It may well be that in this moment Israel isn't able or willing to proceed down that pathway."

The U.S. Raised Tariffs on China. Now It Wants Europe's Support.

STRESA, Italy-The U.S. is leaning on Europe to help defend against a surge of Chinese exports on global markets, trying to achieve unity among allies that hold distinct views of how to respond to Beijing's economic might.

The U.S. last week raised tariffs on roughly $18 billion of Chinese goods to protect American industries from inexpensive Chinese competition. In a speech in Frankfurt on Tuesday, Treasury Secretary Janet Yellen suggested that Europe should complement the American tariffs.

Western Officials Brace for Volatile Iran After Raisi Death

Western officials say they are braced for a period of increased volatility with Iran as the country prepares to choose a successor to President Ebrahim Raisi, who died in a helicopter crash over the weekend. But they said they don't expect Tehran to make major foreign-policy shifts.

Iran, where ultimate authority lies with Supreme Leader Ayatollah Ali Khamenei, is likely to stay on its current trajectory, deepening ties with China and Russia, supporting Hamas and other regional militias and pursuing its nuclear program, officials in Washington and European capitals said.

Microsoft's stock rides AI elation toward first record close in two months

Microsoft Corp.'s stock headed for its first record close in two months Tuesday, a momentum related to the company's latest artificial-intelligence announcements pushed the share price higher.

The technology powerhouse is in the midst of its Build developer conference, featuring announcements around products and software. Microsoft MSFT on Monday debuted new personal computers that integrate the company's Copilot artificial-intelligence assistant. Tuesday's announcements highlighted ways AI software can augment the working experience.

Write to

Expected Major Events for Wednesday

05:00/FIN: Apr Labour force survey, incl unemployment

06:00/EU: Apr New Passenger Car Registrations in Europe statistics (EU27 + EFTA3)

06:00/UK: Apr Public sector finances

06:00/UK: Apr UK producer prices

06:00/UK: Apr CPI

06:00/SWE: Apr Labour Force Survey

08:00/ICE: Apr Harmonized CPI

08:00/POL: Apr Average gross wages

08:00/POL: Apr PPI

08:00/POL: Apr Industrial Production Index

08:00/ICE: Apr Labour Force Survey

08:30/UK: Mar UK House Price Index

10:00/IRL: Apr WPI

All times in GMT. Powered by Onclusive and Dow Jones.

Write to us at

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

05-22-24 0021ET