Asian markets are mixed as talks on the US debt ceiling end without a deal

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

21 of the economists surveyed expected an upswing, while the rest expected a pause. In the same Reuters survey, the median expected interest rate increase is 25 basis points.

A rate hike on Tuesday would be the Reserve Bank of New Zealand̵[ads1]7;s 12th since October 2021.

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

— Lim Hui Jie

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

The manufacturing PMI came in at 50.8 in May, a reversal from 49.5 recorded in April, “signaling 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 that there were renewed increases in both output and new orders, with both variables rising at the strongest pace in 13 months. Manufacturers indicated that supply chain problems were showing signs of improvement.

Japan’s services PMI was 56.3 in May, higher than the 55.4 seen in April and rising at the strongest pace since the series began. Composite PMI rose to 54.9, up from 52.9 in April.

— Lim Hui Jie

Hong Kong inflation rose 2.1% in April from a year earlier, slightly above the 2% expected by economists polled by Reuters. Inflation in April was also higher than the 1.7% recorded in March.

A city government spokesman said prices of energy-related goods continued to rise sharply year-on-year, as well as the cost of clothing and footwear.

The price of electricity, gas and water rose by 17.8%, while the prices of clothes and shoes rose by 6.4%.

The price of takeaway meals and dining out also rose by 4.2%, while “price pressures on other key components remained broadly contained,” the spokesman said.

Going forward, Hong Kong expects that domestic price pressures may increase along with the economic recovery. Overall inflation is likely to pick up in the rest of 2023, but will remain “largely moderate”.

— Lim Hui Jie

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

“We have to have movement” on parts of any deal to raise the debt ceiling, McCarthy told reporters at the Capitol, adding “I know where I think people should be able to get to.”

With just 10 days to go until the earliest date Treasury Secretary Janet Yellen says the US will risk default, Biden and McCarthy are under intense pressure to reach a compromise deal. If and when they do, it will still take at least a week to turn the handshake agreement into legislation and send it through the House and Senate.

The House is currently scheduled to adjourn for the Memorial Day holiday this weekend, but McCarthy said he would delay if necessary to hold a vote to raise the debt ceiling. “We’re going to stay and do our job,” he said.

-Christina Wilkie

Shares of several global commercial real estate companies are set to fall further, according to chief investment officer Patrick Armstrong.

Armstrong, who manages equity strategy at asset manager Plurimi, revealed he is shorting four global commercial real estate companies.

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

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– Ganesh Rao

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

His strategy appears to have paid off in the long term: his fund ranks at the top with a 10-year annualized return (15%) on Morningstar’s list of global mega-cap equity funds.

Here are three tips on sustainable investing, including how to play the renewable energy theme, according to Ripman.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Minneapolis Federal Reserve President Neel Kashkari noted Monday that a rate hike versus a pause in June is a “close call.” However, he added that even if the central bank decides on another hike, it should not be considered a sign of the future.

“Right now it’s a close call anyway … If we were to skip in June, that doesn’t mean we’re done with our tightening cycle, it means to me we’re getting more information,” he said on CNBC’s ” Squawk Box. “

He called the economy “robust” and noted that “we may have to go north of 6%” for the Fed Funds rate from the current target range of 5%-5.25% if inflation shows no more signs of falling.

-Jeff Cox

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

Bitcoin was down 8.7% for May and on pace for its worst month since November, according to Coin Metrics. Ether was lower for the month by nearly 5% and is heading for its worst month since December.

“Crypto continues to remain the best-performing asset this year relative to gold, stocks, bonds and the DXY,” Bernstein analyst Gautam Chhugani said in a note on Monday. “We continue to believe in our structural thesis of the ‘new crypto cycle,’ but there is never a straight path up… These dull markets, we believe, offer the best long-term risk rewards.”

— Tanaya Machel, Gina Francolla

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

The country’s cyberspace administration barred operators of “critical information infrastructure” from buying products from the company after Micron’s products failed network security reviews.

The firm poses a “major security risk” to China’s supply chain for critical information infrastructure and impacts [its] national security, says 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 nearly 1% each.

– Samantha Subin