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CANADA

USDCAD Struggles To Break 1.28

BRAZIL

Government Raises 2022 CPI Estimate To 7.9%

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Paring Gains/Session Lows, 30YY Back Over 3.0%

MNI: Spanish Unions, Business See Renewed Talks On Wages Pact

Madrid (MNI)

Spanish unions and business are both keen to avoid a rise in industrial disputes as wages are outpaced by inflation at 8.3% in April.

MARKET NEWS TOP STORIES

MNI: Fed Seen Taking Bumpy Road to Avoid Wage-Price Spiral

Lifting interest rates quickly to relieve wage pressures isn't without risks, but a wage-price spiral would be worse, former Fed economists say.

MNI BRIEF: Rate Rise Pace Split ECB GovCo, April Account Shows

Governing Council members split on how quickly rates needed to rise, but delayed decisions until June.

MNI INTERVIEW: SNB To Keep Rates Negative In 2023 - Ex-Staffer

Negative rates are unpopular but may stay for longer, former SNB economist Daniel Kaufmann tells MNI.

MNI BRIEF: Shanghai Aims To Resume Production From May-End

The Shanghai government updates on its plans for a phased re-opening.

Political Risk

President Joe Biden's Approval Remains Underwater

The approval rating of US President Joe Biden remains at near record lows following a sharp reversal of a recent upward trend, according to three key approval trackers.

    • Five Thirty Eight: 41.1% Approve, 53.4% Disapprove
    • Real Clear Politics: 41.1% Approve, 54.1% Disapprove
    • Morning Consult: 41.0% Approve, 51.0% Disapprove
  • Presented below is the FiveThirtyEight presidential approval comparison tracker. The chart shows that Biden's approval (grey line) has stabilised at similar lows experienced by former President Donald Trump (green line) during the majority of Trump's tenure in the White House.

Figure 1: President Joe Biden and former President Donald Trump approval comparison (FiveThirtyEight)

Senate Passes USD$40 Billion Ukraine Aid Package

The United States Senate has passed the ~USD$40 billion Ukraine aid package with a strong bipartisan vote and synched the bill with the House of Representatives.

  • The bill will now head to President Biden's desk for his signature before the President departs on his Asian tour this evening.
  • The Senate voted 86-11 to break cloture at noon to advance bill to a final passage vote.
  • The 11 Republicans 'noes' were Senators Blackburn (R-TN), Boozman (R-AR), Braun (R-IN), Crapo (R-ID), Hagerty (R-TN), Hawley (R-MO), Lee (R-UT), Lummis (R-WY), Marshall (R-KS), Paul (R-KY), and Tuberville (R-AL).
  • Before the vote Senate Majority Leader Chuck Schumer (D-NY) said: 'It is beyond troubling to see a growing circle of Senate Republicans proudly oppose Ukrainian funding. It appears more and more MAGA republicans are on the same soft-on-Putin playbook that we saw used by former President Trump.'

US House Of Reps Passes Oil 'Price Gouging' Bill

US House of Representatives has passed the 'Consumer Fuel Price Gouging Prevention Act,' in a 217-207 vote with four Democrats voting 'no.'

  • The bill was co-sponsored by Reps Kim Schrier (D-WA) and Katie Porter (D-CA) who are rated among DCCC's 'Frontline Democrats in the most competitive November races.'
  • The bill will now head to the Senate where it is expected to face a stiffer test in the 50-50 chamber.
  • Rep Adam Smith (D-WA): 'Today the House passed H.R. 7688, the Consumer Fuel Price Gouging Prevention Act, which would help hold oil companies accountable and address high gas prices across the country.'
  • The US Chamber of Commerce has lobbied against the bill, issuing this statement: 'The ‘Consumer Fuel Price Gouging Prevention Act’ would be more accurately named the ‘Bring Back 1970s Gas Lines Act.’ Economics 101 teaches us that when demand exceeds supply, prices rise. Rather than unlocking more domestic energy, this bill would effectively impose price controls that would discourage new energy production, resulting in even less supply while demand continues to increase. This will result in rationing and gas lines.'
  • The full text of the bill can be found here: https://www.congress.gov/bill/117th-congress/house...


Support For New Chilean Constitution Increases

A recent Candem poll has shown that support for the new Chilean constitution has increased since the draft constitutional proposal was published this week.

  • There were fears that the new constitution would usher in radical changes in the central bank and strict regulation of the mining sector. These concerns didn't materialise; central bank independence is enshrined in the new constitutional proposal, and mining is still subject to the same concession system.
  • Members of the convention have just over three months to sell the new charter to voters before it is put to a referendum on September 4.
  • Early signs suggest that the negative popular opinion of the Convention may be turning around. The previous batch of polling from Cadem released May 10 showed that only 42% of voters would approve the new constitution. This has risen to 45.5% since publication of the proposal.

Figure 1: With the information you have at this time, would you vote to Approve or Reject the Constitution proposed by the Constitutional Convention? (Cadem )

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