China's consumer inflation was reported to remain steady at 0.3% in May, matching the previous month's rate. However, the underlying trend suggests the necessity for Beijing to take extra measures to improve domestic demand and support the uneven economic recovery across sectors. The producer price index declined to 1.4% in May, down from 2.5% in April. Economists warn that deflationary pressure remains an issue, with the slight improvement in producer prices driven by commodity prices rather than domestic demand. China also stopped buying gold in May after an 18-month shopping spree that saw prices climb to record highs.
EQUITY

Wall Street has seen indexes reach new record highs, although the Dow fell slightly. Apple's stock price climbed 7% after unveiling its AI strategy, although industry players warned of privacy and security concerns. Oracle's has also benefited from its new partnerships with OpenAI and Google Cloud for AI infrastructure, albeit missing quarterly earnings. Asian markets were mixed, with Chinese stocks slipping on potential U.S. trade sanctions targeting Chinese chip resellers supplying Russia.

GOLD

Gold remained flat on Wednesday, awaiting the FOMC and the May inflation report. The market is divided on whether the Fed will cut rates once or twice this year, with attention focused on the central bank's updated economic projections and Chair Jerome Powell's press conference. Buying pressure has also subsided with the Chinese central bank pausing its gold purchase.

OIL
Oil prices stable on Tuesday after brent rebounding from 4-month lows to above $80 a barrel. The U.S. Energy Information Administration (EIA) raised its global oil demand growth forecast for 2024 to 1.1 million barrels per day, up from its previous estimate of 900,000 bpd. Similarly, OPEC maintained its outlook for solid global oil demand growth this year, driven by increased travel and tourism in the summer.

CURRENCY

The greenback steadied above 105.2 ahead of the US inflation report and FOMC. The index had gained over 1% since Friday, supported by job data, changing expectations to only one rate cut from the Fed this year, with a September move becoming less likely. The Japanese yen’s further weakened against the dollar, with the Bank of Japan expected to keep interest rates untouched. As the 2024 US election season approaches, rising tensions between China and the US could be a negative factor leading to a creep-up in the dollar against the offshore yuan.