Headlines

The rise in European bond yields is alarming some economists, who warn that Italy and Greece in particular do not have much wiggle room before their debt servicing burden starts rising, rekindling memories of the 2011-2012 euro debt crisis, Reuters reported. Just five months into the year and even before the European Central Bank tightens policy, French and German 10-year debt yields are up over 120 basis points and set for their biggest annual surge since 1999 - the year the euro was born. Spanish, Italian and Portuguese yields are up more than 155 bps.

For years, as Japan tried to boost its chronically weak economic growth, it pursued what its central bank saw as a magic formula: stronger inflation and a weaker yen, the New York Times reported. It didn’t quite work as intended. Inflation never met the government’s modest target, despite rock-bottom interest rates and heaps of fiscal stimulus. Workers’ wages stagnated, and growth remained anemic. Now, Japan is suddenly getting what it wished for — just not in the way it had hoped.

Retail sales in Brazil rose more than expected in March, the third straight monthly gain, despite double-digit inflation in Latin America's largest economy, official figures showed on Tuesday, Reuters reported. According to government statistics agency IBGE, sales grew 1% in March from February, more than the 0.4% increase forecast in a Reuters poll of economists. Six of the eight activities surveyed recorded growth, with computer and communication office equipment and supplies gaining 13.9%.

Romania’s central bank raised interest rates more than expected, stepping up the pace of tightening as it struggles to tame the fastest inflation in almost two decades and catch up with regional peers, Bloomberg News reported. The central bank raised the benchmark rate by 75 basis points to 3.75% at its meeting on Tuesday, matching the estimates of only one of the 11 economists surveyed by Bloomberg. The median estimate was for a 50 basis-point increase to 3.5%.

Italy's government aims to sell state-owned ITA Airways, the successor to Alitalia, by the end of June after setting a deadline for binding offers of May 23, Economy Minister Daniele Franco said on Tuesday, Reuters reported. Under a government decree, Rome plans to privatise ITA through a direct sale while retaining a minority, non-controlling stake in a first stage. Three prospective bidders for ITA Airways have had access to its finance data room, Franco said addressing parliament over the issue. They are shipping group MSC alongside Germany's Lufthansa, the U.S.

President Nayib Bukele’s Bitcoin gambit is becoming onerous for El Salvador, but that isn’t stopping him from adding to his stockpile, Bloomberg News reported. The impoverished Central American country has bought 2,301 Bitcoins since making it legal tender in September, based on Bukele’s announcements on Twitter, including yesterday’s 500-coin purchase as the price fell below $31,000. The tokens are worth $74 million now, well below the $103 million Bukele paid for them, according to calculations by Bloomberg.

China's central bank said on Monday it would step up support for the slowing economy, while closely watching domestic inflation and monitoring policy adjustments by developed economies, Reuters reported. The People's Bank of China (PBOC) will keep liquidity reasonably ample, prioritise stability and take steps to boost confidence, the bank said in its first-quarter monetary policy implementation report.

China's new yuan loans are expected to have dropped in April after a rebound in March as credit demand weakened, a Reuters poll showed, even as the central bank keeps policy accommodative to support the slowing economy, Reuters reported. The Chinese economy has taken a hit as authorities raced to stop the spread of record COVID-19 cases, which have led to a full or partial lockdown in dozens of Chinese cities, including a city-wide shutdown in the commercial hub of Shanghai in April.

Russia is facing the deepest economic contraction in nearly three decades as pressure from sanctions imposed by the U.S. and its allies mounts, according to an internal forecast by the Finance Ministry, Bloomberg News reported. Gross domestic product is likely to shrink as much as 12% this year, deeper than the 8% decline expected by the Economy Ministry, according to people familiar with the estimates who spoke on condition of anonymity to discuss internal deliberations. The government hasn’t released a public forecast since the invasion of Ukraine.