By Anant Chandak

BENGALURU (Reuters) - The Bank of Korea will keep its key policy rate unchanged for an 11th straight meeting on Thursday and through next quarter, followed by a half point cut in Q4 after the likely start of policy easing from many global peers, a Reuters poll found.

South Korea's economy grew at the fastest pace in over two years last quarter thanks to strong exports, suggesting the economy may not need an immediate rate cut from the central bank.

Bolstering the higher-for-longer rate view was elevated inflation and a weak currency.

Already down nearly 5% for the year, any further weakening of the won, would likely drive up import costs and exacerbate inflationary pressures.

All 43 economists in the May 14-20 Reuters poll expected the central bank to leave the base rate on hold at 3.50% on May 23.

Median forecasts showed interest rates remaining unchanged through the third quarter before a 50 basis-point cut by end-2024. In an April survey, the consensus view predicted 25 basis-point cuts in Q3 and Q4.

"Considering the uncertainty of the timing of the Federal Reserve's interest rate cut and the higher dollar exchange rate level, the monetary policy committee will also maintain its cautious stance in lowering interest rates," said Jihee Min, fixed income analyst at Mirae Asset Securities.

The BOK, among the first to kick-off its policy tightening cycle in August 2021, was expected to lag its global peers on the timing of the first cut.

The European Central Bank and the Fed were expected to ease in June and September, respectively.

Although median forecasts showed interest rates on hold until end-Q3, a strong minority of 17 of 39 economists forecast a cut to 3.25% by the end of next quarter.

Among those who provided forecasts until end-2024, a slim majority, or 19 of 37, expected interest rates at 3.00%, while the rest said 3.25%.

"The BOK is likely to signal that a rate cut is unlikely in the next three months but still possible by the end of 2024," noted Bum Ki Son, analyst at Barclays.

"Growth momentum remains two-tiered with strong net exports, versus a still-soft domestic outlook. The soft domestic demand growth outlook and relatively muted perceived growth still suggest that the next move will be a cut."

Last month the BOK said the economy could grow at a faster pace this year than its earlier projection of 2.1%. A separate Reuters poll in April showed the economy expanding 2.2% in 2024.

(For other stories from the Reuters global economic poll:)

By Jamie McGeever

(Reuters) - A look at the day ahead in Asian markets.

Investors' appetite for stocks and risk assets shows no sign of waning which, in the absence of any major market-moving economic data or events in Asia on Tuesday, should pave the way for further gains across the continent when trading gets underway.

Monday's global market moves encapsulated the 'FOMO' that seems to be fueling the ongoing risk rally - volatility, the dollar, bond yields and geopolitical uncertainty all rose to varying degrees, yet equities marched higher regardless.

'Fear of missing out' - which some might say isn't all that far removed 'irrational exuberance' - is a powerful force. But it can also be a red flag, especially when long-time market bears join the frenzy.

Morgan Stanley's U.S. equity strategist Mike Wilson has not been the only Wall Street bear over the last couple of years, but he has certainly been one of the most prominent.

On Monday, he and his team raised their base-case, 12-month forecast for the S&P 500 to 5400 points. That's only up around 2% from Friday's close, but 20% higher than their previous forecast of 4500.

Only time will tell if Wilson's about-turn will be an indication that investors' exuberance has become irrational. Right now, however, at least until chipmaker Nvidia (NASDAQ:NVDA)'s earnings on Wednesday, market bulls are firmly in control.

And Asia is enjoying the ride too.

The MSCI Asia ex-Japan equity index on Monday rose to a two-year high with its seventh consecutive rise, its best run since January last year. Another increase on Tuesday will seal its best run since August-September 2021.

Japan's Nikkei is back above 39,000 points for the first time in over a month, and the dollar is back above 156.00 yen. The dollar is now within one yen, more or less, of where Japanese authorities are widely thought to have conducted yen-buying intervention on May 1.

Intervention seems unlikely right now, but currency traders will not be complacent. The latest Commodity Futures Trading Commission data show that speculators reduced their net short yen positions for a third week, but not by much.

The main event on the Asian and Pacific calendar on Tuesday is the release of the minutes from the Reserve Bank of Australia's May 7 policy meeting.

The RBA quashed market talk at the time of a near-term interest rate hike but also didn't hold out much chance of a cut for months to come. The Aussie dollar has regained its poise since then to climb to a four-month high just above $0.67.

Australian rates markets are not fully pricing in a 25-basis point rate cut until April next year.

Here are key developments that could provide more direction to markets on Tuesday:

- Reserve Bank of Australia meeting minutes

- Australia consumer sentiment (May)

- Indonesia's government presents 2025 economic forecasts to parliament

(Reuters) -The Federal Reserve and two other U.S. regulators are moving toward a new plan that would significantly reduce a nearly 20% mandated increase in capital for the country's biggest banks following lobbying efforts by industry CEOs like JPMorgan Chase (NYSE:JPM)'s Jamie Dimon, the Wall Street Journal reported on Sunday.

Required increases in capital for banks like JPMorgan and Goldman Sachs meant to ensure they have sufficient buffers to absorb potential losses — would on average be about half as much as originally floated, the Journal added.

Top officials from all three agencies involved in the pending capital rules — the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency — are still discussing substantive and technical revisions and there is no guarantee that an agreement will be reached, the WSJ reported.

The Fed, FDIC and OCC declined to comment on the report.

The three bank regulators, led by the Fed, in July last year unveiled a proposal to overhaul how banks with more than $100 billion in assets calculate the cash they must set aside to absorb potential losses.

The Basel proposal aims to make banks more resilient to potential losses, lowering the risk of failures or bailouts. Banks say that they are already highly capitalized and the changes are unnecessary.

Big U.S. banks have lobbied against the Basel proposal, which they say will force them to overhaul or shut down a range of products and businesses.

Goldman Sachs recruited dozens of small business owners to travel to Washington and urge lawmakers to reconsider the proposal, a Reuters review of private Goldman documents, interviews with program participants and public disclosures show.

Investing.com-- China’s housing market sales will likely take at least six to 12 months before stabilizing, Morgan Stanley analysts wrote in a recent note, with a bulk of this stability tied to just how the government rolls out funding support. 

MS analysts noted that China’s housing market reacted positively to recent measures from the government to support the sector, while also noting that China’s latest move- which heralded potential government buying of inventories- exceeded expectations. 

The People’s Bank of China will also set up a 300 billion yuan housing relending facility.

But the execution funding and timing of the new measures will be crucial in how well the market recovers, particularly the inventory buying and funding plans. MS analysts said that at least 80% of the funding requirements for the government’s inventory digestion plans were not yet fulfilled. 

Beijing also needed to specify how the inventory management will be priced, and what developers will be prioritized- between state-owned and private enterprises. 

MS analysts said a “base-case” scenario entailed at least another six to 12 months before housing sales stabilized. 

“Faster execution of the support measures, early clarification of the questions above, and an incremental step-up in efforts when needed, could imply potential upside to earlier earnings growth reacceleration, as well as a better outlook for China coming out of deflationary pressure,” MS analysts wrote in a note.

China’s property market- which accounts for at least a quarter of the world’s second-largest economy- has been a key point of pressure on growth, as it saw a prolonged downturn over nearly four years.

The downturn was also marked by several high-profile defaults, such as China Evergrande Group (HK:3333) and Country Garden Holdings Company Ltd (HK:2007), which were among China’s biggest developers.

While Beijing had rolled out a string of monetary stimulus measures over the past two years to support the sector, they had offered little relief. The government was seen only recently implementing its most targeted measures yet for the property market.

BEIJING (Reuters) - China's Commerce Ministry said on Monday that it will prohibit some U.S. firms from importing and exporting activities related to China, including one selling arms to Taiwan, and forbid them from making new investments in China.

The ministry put General Atomics Aeronautical Systems on its unreliable entities list, saying it sold arms to Taiwan, according to a statement. It also included General Dynamics (NYSE:GD) Land Systems.

According to state media, Boeing (NYSE:BA) Defense, Space & Security was also placed on the list.

Senior executives of all three companies are prohibited from entering China, while their work permits will be revoked, along with their visitor and residential status, and the related applications they submit will not be approved, said the ministry's announcement, according to Xinhua news.

Investing.com -- The Federal Reserve is to publish the minutes of its latest meeting and several Fed officials are to deliver remarks as renewed expectations for rate cuts power markets higher. AI darling Nvidia (NASDAQ:NVDA) is to report earnings, PMI releases will give insights into the health of the global economy, while the U.K. is to release what will be closely watched inflation data and the Reserve Bank of New Zealand meets. Here’s what you need to know to start your week.

Fed minutes, speakers

On Wednesday the Fed is due to publish the minutes of its April 30-May 1 meeting, when Fed Chair Jerome Powell indicated that rates are likely to remain higher for longer amid lingering inflation pressures.

Since then, a report last week showed that U.S. consumer prices increased less than expected in April, indicating that inflation resumed its downward trend at the start of the second quarter.

Several Fed officials are also due to speak during the week, including Atlanta Fed President Raphael Bostic, Governors Michael Barr, Christopher Waller and Philip Jefferson, Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin.

The economic calendar also includes reports on new and existing home sales, durable goods orders and consumer sentiment.

Nvidia earnings

Nvidia's quarterly results on Wednesday could set the tone for U.S. stock markets and reverberate through companies exposed to the burgeoning artificial intelligence field.

The semiconductor company at the centre of the excitement over AI's business potential is expected to report a massive jump in revenue and profit for its fiscal first quarter.

Revenue is expected to rise to $24.8 billion, from $7.2 billion a year earlier, with earnings per share soaring to $5.57 from $1.09, according to LSEG data cited by Reuters.

Nvidia may need to meet those lofty expectations and then some to keep its soaring stock price moving higher. Shares have jumped over 90% this year after more than tripling in 2023, making the AI darling the third-largest U.S. company by market value.

PMI data

The U.S., China, the euro zone and the U.K. are all to release May PMI data that should reinforce a brighter global economic outlook.

A slow euro area recovery appears to be underway after six straight quarters of stagnant or negative growth, U.S. inflation just resumed its downward trend and China grew faster than expected in the first quarter.

So, global PMIs should stay on the right side of the line between expansion and contraction.

Yet steep U.S. tariff increases on Chinese imports from electric vehicle batteries to computer chips highlight a fragile outlook for global trade and growth. China has vowed retaliation.

Manufacturers in Germany, Europe's biggest economy, are already experiencing shifts in world trade and geopolitics. Heightened trade tensions - with a U.S. election looming - could hurt them further, upend China's recovery and reignite U.S. inflation.

U.K. inflation data

The U.K. is to publish April CPI data on Wednesday with economists expecting the annual rate of inflation to have slowed dramatically - by more than a percentage point - to near the 2% level targeted by the Bank of England.

There is one more inflation report due out ahead of the next BoE meeting on June 20 and sustained evidence of cooling price pressures could give officials all the encouragement they need to cut interest rates.

Ahead of the inflation numbers BoE Governor Andrew Baily is due to deliver remarks on Tuesday.

The U.K. economic calendar also features April retail sales data on Friday.

RBNZ decision

The Reserve Bank of New Zealand is expected to leave rates unchanged on Wednesday for a seventh straight meeting, against a background of persistent inflation and a stalling economy.

The RBNZ was the first major central bank to ease at the start of the pandemic, and the first to hike in the aftermath.

Market bets for an eventual rate cut in October put it behind the European Central Bank which is expected to move in June, followed by the BoE in August and the Fed in September. Switzerland and Sweden have started easing.

The RBNZ itself is even less optimistic, projecting no rate cuts until next year.

--Reuters contributed to this report

LONDON (Reuters) - Prices of homes being put up for sale in Britain have hit record highs despite still expensive mortgage costs, but the pace of gains has slowed, according to data from property website Rightmove (OTC:RTMVY).

The average asking price for residential properties touched 375,131 pounds ($474,578.23) in the four weeks to mid-May, Rightmove said.

However, the 0.8% increase in month-on-month terms represented the weakest rise so far in 2024.

Prices were only 0.6% higher when compared with the same period last year.

Britain's housing market slowed last year as higher borrowing costs weighed on the market but it has shown signs of picking up in recent months as falling inflation boosts household incomes and raises the prospect of interest rate cuts.

Tim Bannister, Rightmove's director of property science, said the momentum of the spring selling season was not a sign of a return to strong demand.

"The market remains price-sensitive, and with prices reaching new records in the majority of regions and mortgage rates remaining elevated, affordability for many home-buyers is still stretched," Bannister said.

Rightmove said asking prices rose by the most - up 1.3% in annual terms - in the high end of the market.

($1 = 0.7905 pounds)

LONDON (Reuters) - Investors poured money into stocks and bonds in the week to Wednesday, favouring laggards such as utilities, but pulling money from pricier parts of the market such as technology stocks, BofA research showed on Friday.

Equity funds saw $11.9 billion in inflows, while bond funds drew in $11.7 billion, BofA said citing data from EPFR.

Within fixed income, Treasury inflation-protected securities (TIPS) saw outflows of $700 million, the most in nine weeks.

Data on Wednesday showed U.S. consumer inflation moderated in line with expectations in April, offering investors confidence that a recent pickup in fuel prices has not translated into an overall rise in consumer price pressures that could delay much-anticipated rate cuts.

By Saqib Iqbal Ahmed and Lewis Krauskopf

NEW YORK (Reuters) - The Dow Jones Industrial Average, a laggard among the major U.S. stock indexes this year, got its moment in the spotlight on Thursday as it briefly broke above 40,000 points for the first time in its history.

The record on the Dow - as well as fresh records on the S&P 500 and Nasdaq Composite earlier this week - come as investors grow more confident that the U.S. is heading for an economic soft landing, where the Federal Reserve is able to tame inflation without badly hurting growth.

A stronger-than-expected earnings season has also helped propel stocks higher, with 77% of companies beating estimates, compared to 67% historically, according to LSEG IBES data as of May 10.

While Dow components are weighted in the index by their share prices, S&P 500 stocks are weighted largely by their market value. The relatively infrequent changes to the Dow means it sometimes may be slower to include some of the hottest companies.

Some $89 billion in assets is benchmarked to the Dow, compared to $11.45 trillion pegged to the S&P 500, according to the S&P Dow Jones Indices annual survey of assets as of December 2023.

Still, the price-weighted index retains cultural cache: established in 1896, it is far older than the S&P 500, which was launched in 1957 and the Nasdaq, which was launched in 1971. The Dow outperformed the S&P 500 in eight of the last 20 years. This year, it is up 5.8%, compared to the S&P 500's 11.1% year-to-date gain and the Nasdaq's 11.2% rise.

"The Dow is America's index," said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:LPLA). "It has been slighted by the professionals, but the Dow is enduring and it represents Main Street America,"

The index closed at 39,869.38 on Thursday after reversing in afternoon trading.

Past 10,000-level milestones in the Dow have been followed by accelerated gains in the index, though market participants say it is difficult to pinpoint a reason for the momentum.

The Dow has notched an average gain of 4.3% in the month after crossing a 10,000 point milestone. That's well above the index's average rolling one-month gain of 0.57% since May 1896.

"Breaking the 40,000 barrier is a big psychological boost for the bulls as round numbers hold special significance in people's hearts and minds," Chris Zaccarelli, chief investment officer at Independent Advisor Alliance said in a note.

The most recent milestone comes a little more than three years after the index hit 30,000 points, a period marked by big market swings as investors grappled with the aftermath of the COVID-19 pandemic, surging inflation and the interest rate increases by the Fed to combat rising consumer prices.

The composition of the Dow can contrast markedly from that of the S&P 500 due to the different methods by which the indexes select and weight their constituents.

For example, the top weight in the Dow as of Wednesday's close, UnitedHealth Group (NYSE:UNH), is only the 13th most heavily weighted stock in the S&P 500. The Dow's second-biggest weighting, Goldman Sachs, does not make the S&P 500's top 50.

By contrast, three of the top six weights in the S&P 500 - Nvidia (NASDAQ:NVDA), Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) - are not in the Dow.

The Dow's journey from 30,000 to 40,000 points has been marked by a wide gap between the index's best and worst performing stocks. Top performers include American Express (NYSE:AXP), Caterpillar (NYSE:CAT) and Microsoft (NASDAQ:MSFT), whose shares have all roughly doubled in value since November 2020, when the Dow first touched 30,000.

Bringing up the rear are Verizon (NYSE:VZ), Nike (NYSE:NKE) and Intel (NASDAQ:INTC), which have shed around a third of their value over that period.

BEIJING (Reuters) - China's new home prices fell at the fastest monthly pace in over nine years in April, keeping pressure on authorities as intensified efforts to prop up the ailing property sector show few signs of paying off.

Prices were down 0.6% month-on-month in April, worse than a 0.3% fall in March, the fastest pace since November 2014, according to Reuters calculations based on National Bureau of Statistics (NBS) data released on Friday. Prices have fallen for a tenth consecutive month, the data showed.

In annual terms, new home prices fell at the steepest pace since July 2015, down 3.1% last month versus a 2.2% drop in March.

Chinese authorities have stepped up efforts since 2022 to revive the ailing property sector, which is a major driver of the world's second-biggest economy, but a meaningful recovery has proven elusive.

Authorities last month vowed at a Politburo meeting to improve policies to clear mounting housing inventory. In the latest attempt, policymakers are considering a proposal for local governments nationwide to purchase millions of unsold homes, Bloomberg News reported earlier this week.

Last week, two Chinese provincial capitals - Hangzhou and Xian - lifted all home purchase curbs to attract buyers and shore up their sagging property markets, with investors expecting more megacities to follow suit.

It's anybody's guess if the latest steps would help foster a meaningful recovery in the sector which plunged into crisis in 2021 amid a massive liquidity squeeze following an official crackdown on bad debt.

Many China observers believe a broad sector revival would require policy support measures to go hand in hand with structural reforms

Of the 70 cities in the housing data, 64 reported declines in prices last month, more than the 57 cities that did so in March.

A separate statement from NBS showed property investment and sales both fell at a faster pace from a year earlier in January-April.

(This story has been refiled to correct the day of the week in paragraph 2)