China Kicks off Ultralong Bond Sale to Support Economy

China Kicks off Ultralong Bond Sale to Support Economy By Vicky Ge Huang

China is kicking off an effort to bolster its economy this week with a big bond sale. Meanwhile, inflation expectations in New Zealand continued to tumble, easing pressure on its central bank to further raise interest rates. And investors are hoping that the April inflation report will keep alive the possibility of interest-rate cuts by the Federal Reserve.

Read on for this news and more.

Top News China Kicks off Ultralong Bond Sale Friday to Support Economy

China will start selling the first batch of a planned 1 trillion yuan ($138.37 billion) ultralong bond issuance this week, as Beijing looks to provide more support to the economy.

The sale will run from May to November, with an unspecified amount of special 30-year treasurys to be issued Friday, according to a post on the Chinese finance ministry's website. Bonds in 20- and 50-year tenors will be sold starting May 24 and June 14, respectively.

Elsewhere, inflation expectations in New Zealand dropped as the farm-rich economy remains in an extended recession.

U.S. Economy Investors Crowd Into Soft-Landing Trade Ahead of Crucial Inflation Data

Three straight months of hot inflation data dented Wall Street's confidence that a series of interest-rate cuts is set to start at any minute. Investors are hoping the fourth time is the charm , with April consumer-price index data due Wednesday morning.

Financial Regulation Wealth Managers, Charities Defend Fees From Donor-Advised Funds

Investment managers, community foundations and House lawmakers from both parties are teaming up against a Biden administration proposal that would penalize certain payments from charitable funds to wealth advisers who steer the investments.

Forward Guidance Tuesday (all times ET)

8:30 a.m.: U.S. producer-price index for April

Wednesday

8:30 a.m.: U.S. retail sales for April

8:30 a.m.: U.S. CPI for April

Research Gold Declined Ahead of Key Inflation Data

Gold futures fell 1.3% to $2,336 a troy ounce, giving way to a stronger U.S. dollar ahead of this week's key inflation data. Investor nerves are weighing on the precious metal ahead of Tuesday's producer price index data, and the more widely-watched CPI data due on Wednesday, which should provide more clarity on both the timing and the extent of the Federal Reserve's path to monetary easing. If inflation proves sticky, the Fed may keep interest rates higher for longer, a headwind for the noninterest-bearing bullion. - Joseph Hoppe

Basis Points U.S. investment-grade credit continues to attract good demand mainly due to high yields on the bonds, Bank of America credit analysts said in a note. "Unattractive spreads matter less as long as yields remain attractive," the analysts said. In addition, Fed Chair Jerome Powell's comments pushing back against the possibility of an interest-rate rise have reduced risk for yield buyers, BofA says. - Miriam Mukuru TD Securities continues to favor the U.S. dollar over other G-10 currencies due to higher inflation in the U.S. versus other countries, its strategists said in a note. "Whether using inflation data strength or consensus revisions, U.S. inflation has moved in a very different direction than most, especially the G-10," they said. U.S. economic growth remains better relatively too, even if its strength has ebbed a little, underscoring "a growth and inflation edge and source of support that should anchor the dollar," TD said. - Jessica Fleetham The U.K. labor market loosened a little more in a fresh indication that the Bank of England could start cutting rates as early as next month. Unemployment ticked higher in the three months to March, at 4.3%, according to figures set out Tuesday by the U.K.'s Office for National Statistics. - Joshua Kirby Australian Treasurer Jim Chalmers has framed the center-left Labor government's 2024-2025 budget around the themes of cost of living relief, income tax cuts and the tantalizing prospect of a fall in mortgage interest rates by early next year. - James Glynn About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to [e-mail][].

This article is a text version of a Wall Street Journal newsletter published earlier today.

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05-14-24 0715ET