Asian markets mixed as US debt ceiling talks ended without a deal

New Zealand’s central bank is expected to raise its key policy rates to 5.5% when it meets on Tuesday, according to a Reuters poll of 25 economists.

Twenty-one of the economists surveyed expected a rise, while the rest expected a pause. In the same Reuters poll, the average expected rate hike was 25 basis points.

Tuesday marks the 12th rate hike by the Reserve Bank of New Zealand since October 2021.

The RBNZ earlier surprised investors with a 50 basis point hike to 5.25% in March, with most economists expecting a 25 basis point hike.

— Lim Hui Gee

Japan’s manufacturing sector posted expansion for the first time in seven months, according to flash estimates from au Jibun Bank.

The Manufacturing Purchasing Managers’ Index came in at 50.8 in May, a reversal from 49.5 recorded in April, which “marked the first improvement in operating conditions since October 2022,” the report showed. A PMI reading above 50 indicates expansion, while a reading below that level indicates contraction.

The bank noted renewed increases in both output and new orders, with both variables rising at the strongest rate for 13 months. Manufacturers indicated that supply chain issues are showing signs of improvement.

Japan’s services PMI came in at 56.3 in May, higher than the 55.4 seen in April and expanding at the strongest rate since the series began. The composite PMI rose to 54.9 from 52.9 in April.

– Lim Hui Jee

Hong Kong’s inflation rose 2.1% in April, slightly above the 2% expected by economists polled by Reuters. April inflation was higher than the 1.7% recorded in March.

A spokesman for the city government The prices of energy-related goods, like the prices of clothes and shoes, continue to rise sharply year-on-year.

Electricity, gas and water prices rose by 17.8%, while clothing and footwear prices rose by 6.4%.

Takeaway and dine-out prices also rose by 4.2%, while price pressures in other key components were broadly contained,” the spokesperson said.

Moving forward, Hong Kong expects domestic price pressures to increase with economic recovery. Overall inflation will pick up in late 2023, but will remain “mostly moderate”.

– Lim Hui Jee

House Speaker Kevin McCarthy, R-Calif., says “decisions must be made” in his meeting with President Joe Biden on the debt ceiling, which begins at 5:30 p.m.

“We need movement on pieces of a deal to raise the debt ceiling,” McCarthy told reporters at the Capitol, adding, “I know where I think people can go.”

With just 10 days to go before Treasury Secretary Janet Yellen says a US default could be at risk, Biden and McCarthy are under intense pressure to reach a compromise deal. If they do, their handshake agreement will need at least a week to pass through the House and Senate, turning it into law.

The House is currently scheduled to go into recess this weekend for Memorial Day, but McCarthy said he would adjourn if necessary to hold a vote on raising the debt ceiling. “We’ll stay and do our job,” he said.

– Christina Wilkie

According to chief investment officer Patrick Armstrong, shares of several global commercial property companies will fall further.

Armstrong, who manages equity strategy at wealth manager PluriMi, disclosed that it is shorting four global commercial property firms.

“It’s an expensive company, and in my opinion, it’s facing a pretty toxic environment,” he said of one of his shorts.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Philip Ribman manages the $1 billion store brand Global Solutions fund, with a focus on sustainability. But he also invests in green energy stocks, chipmakers, cybersecurity stocks, pharmaceuticals and more.

His strategy seems to have paid off over the long term: his fund tops Morningstar’s list of global mega-cap equity funds in 10-year annualized returns (15%).

Here are three tips for sustainable investing, including how to drive the renewables theme, according to Ribman.

CNBC Pro subscribers can read more here.

– Weissen Don

Minneapolis Federal Reserve President Neil Kashkari on Monday called a June rate hike and pause a “close call.” However, he added that even if the central bank decides against another hike, it should not be taken as a sign of the future.

“It’s a close call right now … If we have to skip in June, that doesn’t mean we’re done with our tightening cycle, and that to me is getting more information,” he told CNBC’s ” Squawk Box .”

He called the economy “strong” and noted that “we may have to go north of 6%” to feed the funds rate from the current target range of 5%-5.25% if inflation shows no signs of easing.

– Jeff Cox

Cryptocurrencies were flat to start the week as movements in stocks and bond yields continued to push and pull crypto prices.

Bitcoin fell 8.7% for May and had its worst month since November, according to Coin Metrics. Ether is down nearly 5% for the month and heading for its worst month since December.

“Crypto continues to be the best-performing asset this year compared to gold, stocks, bonds and DXY,” Bernstein analyst Gautam Sukhani said in a note on Monday. “We continue to believe in our structural thesis of a ‘new crypto cycle’, but it’s never a straight path… We believe these sluggish markets offer better long-term risk rewards.”

– Tanaya Machel, Gina Brancola

Shares of Micron Technology fell more than 3% amid news that China will restrict some sales of the memory chipmaker’s products.

The country’s Cyberspace Administration banned “critical information infrastructure” operators from buying products from the company after Micron’s products failed its network security review.

The company poses a “major security risk” to and affects China’s critical information infrastructure supply chain [its] national security,” it said in a statement.

The news lifted Chinese chipmakers including Hong Kong-listed Hua Hong Semiconductor and SMIC. Some chipmakers, including Qualcomm, Lam Research, Broadcom and Applied Materials, were down 1% each.

– Samantha Subin