BOE'S PILL: UNCERTAINTY ABOUT ENERGY PRICE OUTCOMES

Australia's S&P/ASX 200 index closed up 0.70 points, or 0.01%, at 8631.10 on Thursday, May 14.

US Dollar: 1. US April PPI annual rate reached 6%, a new high since December 2022, exceeding market expectations of 4.9%. US April PPI surged 1.4% month-on-month, with both goods and services prices rising. 2. Fed's Collins: Patience with rising inflation is waning, and interest rates may need to remain high for a longer period. 3. White House: Kevin Warsh has been confirmed as Fed Chair. 4. US Senate approves Kevin Warsh as Fed Chair. 5. New York Fed: Trading desk plans to conduct approximately $16.3 billion in reinvested bond purchases from May 14 to June 11. 6. Fed's Kashkari: Inflation is currently too high. The Iranian shock has disrupted the inflation environment. The labor market appears to be remaining stable. 7. Fed survey: 63% of respondents said they could handle a $400 emergency expense in cash or equivalent by 2025, unchanged from 2024. Euro: 1. ECB Governing Council member Kochel: A June rate hike is not the ECB's baseline scenario; if the war situation does not improve, it will be difficult to maintain the current interest rate. 2. ECB Chief Economist Lane: The spread of the Iranian shock may be more limited than in 2022, but its intensity and speed will exceed historical averages. 3. ECB Governing Council member Mueller: The Strait of Hormuz issue needs to be resolved as soon as possible if the ECB is to hold rates steady in June. Pound Sterling: 1. British media reports that the Health Secretary is preparing to resign and run for Labour Party leader. 2. Reuters poll: 27 out of 56 economists believe the Bank of England will maintain bank rates at 3.75% this year. 3. According to a Reuters poll: 59 out of 70 economists surveyed expect the ECB to raise deposit rates to 2.25% in June, compared to 44 out of 85 economists surveyed in April. 4. Bank of England Monetary Policy Committee member Mann: Recent government bond volatility is closely related to interest rate decisions. 5. Bank of England Deputy Governor Brident: Interest rate hikes cannot be postponed indefinitely, but immediate action is not needed in June or July. Japanese Yen: 1. Former Bank of Japan Governor Haruhiko Kuroda: The USD/JPY range of 120-130 is considered an equilibrium level based on Japanese economic fundamentals. 2. Japan is considering compiling a supplementary budget to alleviate the burden of household fuel costs. Other: 1. Governor of the Central Bank of Iran: There is no problem with the foreign exchange supply needed for pharmaceuticals. 2. Bank of Canada meeting minutes: Members unanimously agreed that there is currently room for patience. 3. Governor of the Swedish Central Bank, Töden: There are still sufficient reasons not to adjust monetary policy. However, the longer the supply shock lasts, the greater the likelihood of a policy rate hike.