• U.S. consumer spending recorded its biggest increase in four months in April and monthly inflation rebounded, pointing to firming domestic demand that could allow the Federal Reserve to raise interest rates next month.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is likely to remain on solid ground in the wake of other reports on Tuesday that showed confidence among households still at lofty levels despite some slippage this month and strong gains in house prices in March.
• The personal consumption expenditures (PCE) price index excluding food and energy rebounded 0.2percent after dipping 0.1 percent in March. But the so-called core PCE price index increased 1.5 percent in the12 months through April, the smallest gain since December 2015.
The core PCE, which is the Fed's preferred inflation measure, rose 1.6 percent year-on-year in March. That was below the central bank's 2 percent target.
• "We anticipate 1.5 percent will mark the low on core PCE inflation and continue to see a move up to 2percent next year," said Ted Wieseman, an economist at Morgan Stanley in New York.
• The dollar fell to two-week lows against the safe-haven yen as investors turned cautious amid political worries in Europe as well as weaker stock and commodity markets after a long U.S. holiday weekend.
The dollar fell to near two-week low of 110.665 yen JPY= and last traded at 110.85 yen.
• Ahead of an election next week, the Conservatives could lose 20 of the seats it currently holds while the Labour Party could gain 30 additional seats, according to the poll by YouGov. This would result in a loss of the Tories' overall majority at parliament, The Times newspaper reported.
In contrast to signs from a string of opinion polls that have suggested May's Conservatives will increase their majority, the new constituency-by-constituency modelling by YouGov showed it might lose 20 of the 330 seats it holds and the opposition Labour Party could gain nearly 30 seats, The Times said.
That could leave the Conservatives 16 seats short of the overall majority of 326 needed to govern without the support of other parties, the newspaper said.
• In currency markets, the pound fell to $1.2791 GBP=D4, near a one-month low of $1.2775 touched on Friday.
• U.S. President Donald Trump called Germany's trade and spending policies "very bad" on Tuesday, intensifying a row between the longtime allies and immediately earning himself the moniker "destroyer of Western values" from a leading German politician.
• United Nations chief Antonio Guterres said on Tuesday he is trying to convince U.S. President Donald Trump's administration of the value of investing in foreign aid and diplomacy and warned that if Washington pulled back as a global leader, other states would step up.
• Growth in China's manufacturing sector in May kept pace with the previous month, an official survey showed on Wednesday, beating expectations in a reassuring sign the world's second-biggest economy is not losing too much steam after a solid first quarter performance.
The official Purchasing Managers' Index (PMI) stood at 51.2 in May, compared with the previous month's 51.2and above the 50-point mark that separates growth from contraction on a monthly basis.
• Oil prices fell about 1 percent on Tuesday, on signs of resurgent crude output in Libya and concerns that extended production cuts by leading exporting countries may not be enough to drain a global glut that has depressed prices for almost three years.
Brent crude LCOc1 ended the session 45 cents, or 0.9 percent, lower at $51.84 a barrel, while U.S. light crude CLc1 fell 14 cents, or 0.3 percent, to $49.66.
• South Korean President Moon Jae-in has ordered a probe after his Defence Ministry failed to inform him that four more launchers for the controversial U.S. THAAD anti-missile system had been brought into the country, his spokesman said on Tuesday.
Reference: Reuters, CNBC
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