Several top U.S. Senate Republicans on Monday rejected Treasury Secretary Janet Yellen's G7 deal to impose a global minimum corporate tax and allow more countries to tax big multinational firms, raising questions about the U.S. ability to implement a broader global agreement. The opposition from Republicans may push President Joe Biden to attempt to use budget procedures to pass the initiatives with only Democratic votes. It left lawyers and tax experts in Washington wondering whether it could get done without crafting a new international treaty, which requires approval by a two-thirds majority in the evenly split 100-member Senate. In the landmark agreement, G7 finance ministers agreed to pursue a global minimum tax rate of at least 15% and to allow market countries to tax up to 20% of the excess profits.
Japan upgrades Q1 GDP on smaller hit to domestic demand
Japan's economy shrank at a slower-than-initially reported pace in the first quarter, on smaller cuts to plant and equipment spending,
but the coronavirus pandemic still dealt a huge blow to overall demand. Separate data showed growth in bank lending slowed sharply in May, while real wages posted the biggest monthly jump in more than a decade in April. The revised GDP decline was mainly due to a smaller fall in public and capital spending, which both eased less than initially thought, offsetting a slightly larger fall in private consumption. The economy retreated an annualised 3.9% in January-March, not as bad as the preliminary reading of an annualised 5.1% contraction, but still posting the first fall in three quarters.
Russian May inflation accelerates to 6.0%, above forecast
Russia's annual consumer inflation accelerated to 6.0% in May, overshooting expectations and adding arguments for tighter monetary policy days before the central bank's rate-setting meeting. Inflation, the central bank's main area of responsibility, accelerated to its highest since October 2016 when the central bank's key interest rate was at 10%. The data from the statistics
service Rosstat comes ahead of the bank's board meeting due on Friday where it is expected to raise the key rate for the third time in a row, by 25 or even 50 basis points from 5%. Central bank analysts predicted May inflation at 5.7%-5.9%, warning it was on track to speed up further in the coming months. The central bank targets annual consumer inflation of 4%. It overshot the target in late 2020 amid global inflation and as the weaker rouble filtered into prices in Russia.
Dollar subdued as investors look to key U.S. inflation gauge
The 10-year government bond yield (interpolated) on the previous trading day was 1.86, +0.00 bps. The benchmark government bond yield (LB31DA, 10.5 years) was 1.85, -1.00 bps. LB31DA could be between 1.82-1.87. Meantime, the latest closed US 10-year bond yields was 1.57%, +1.00bps. USDTHB on the previous trading day closed around 31.19 Moving in a range from 31.16-31.21 this morning. USDTHB could be closed between 31.15-31.23 today. Meantime, The U.S. dollar was subdued on Tuesday as investors looked to U.S. inflation data due later in the week after softer-than-expected jobs data quelled expectations of an early
tapering in the Federal Reserve's stimulus.
Sources : Bloomberg, CNBC, Investing, CEIC
