This week, after a sharp rise in global bond yields, we await key inflation data in the US and Euro area, and discuss the fallout in Asia. We preview US core PCE and Euro area inflation, discuss a change in our Fed forecasts, and update on UK politics. In Asia, we preview decisions by the BOK and RBNZ, as well as core inflation in Singapore. And, in a special segment, Albert Leung, our Head of Asia rates strategy, discusses rising global bond yields and opportunities in Asia. Chapters: US: 2:10; London: 11:02, Asia: 16:50; Special Market Segment: 23:51

The Week Ahead - Adding Fuel To The Fire

Nomura – The Week Ahead

# Full Transcript

**Podcast:** Nomura – The Week Ahead

## Transcript

We now have, for the very first time, useful AI, which is the reason why your demand, my demand is going parabolic. Utterly parabolic. Hello and welcome to The Week Ahead on Nomura Podcasts. My name is Yubin Parqueles, Chief Southeast Asia Economist at Nomura here in Singapore. And today's Friday, the 22nd of May.

Global markets were choppy this week, and we're still lacking clarity and prospects of a resolution in the Iran war, with some on-again and off-again headlines about whether a deal is coming or not. Global bond yields have risen sharply this week, partly due to inflation remaining sticky, offsetting some optimism in equity markets surrounding AI-driven tech earnings, as you heard in that clip from Jensen Huang, CEO of NVIDIA, arguing why he sees the usefulness of AI spreading and therefore generating more demand.

US Treasury yields in particular have risen to break some key levels, lifting the US dollar with it. A few countries in Asia have borne the brunt of the impact, with bond yields there rising more significantly, and currencies under significant pressure, including in India and Southeast Asia. Some central banks have therefore taken more policy action.

I'm joined by my colleagues Jeremy Schwartz from our US economics team in New York, Josie Anderson from our European team in London, and Yuchiro Nozaki, our Korea economist here in Singapore. We will preview upcoming data in the US and Euro area, explain why a cyclical acceleration in the US economy is intact, update on the latest on UK politics, and discuss our expectations for the upcoming decisions of the BOK and the RBNZ.

In a special segment, our head of Asia rate strategy, Albert Noong joins me to discuss his views on rising global bond yields and where he sees opportunities in Asia in that backdrop. Don't miss that. Now let's dive in. All right, let's kick off with the US and very glad that Jeremy could join us today.

Hey, Jeremy, great to have you back on the podcast. Thanks for joining. Okay, great to be here, Yubin. So first up, the core PCE data for April is out next week. That would be the highlight for sure. What do you expect there? Yeah, so we're expecting a 30 basis point month to month increase for core PCE, which is kind of similar to the recent run rates that we've seen for the past few months. And there's a couple of different ways of looking at this. So in a vacuum, the April data doesn't look too bad on its own.

A lot of the increase we saw this month was driven by technical factors. So in particular, you had the payback in shelter prices after the government shutdown last year. So if you remember, they didn't actually measure shelter prices in October and just assumed zero shelter inflation. But that means because they measure it as six month changes that you got two months of inflation at once in April. So that puts some upward pressure on the monthly print.

And in addition to tha...

The Week Ahead - Adding Fuel To The Fire

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

The Week Ahead - Adding Fuel To The Fire

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.