By Matt Tracy and Davide Barbuscia

(Reuters) - A post Labor-day rush of bond issuance by U.S. investment-grade-rated companies added renewed pressure on long-end U.S. Treasuries, as some investors switch to buying top-rated corporate debt offering higher yields than those on government bonds.

At least 21 investment-grade rated bond offerings are expected to price on Tuesday, according to International Financing Review (IFR) data.

Investors told Reuters they expect anywhere between $100 billion and $150 billion in new bond issuance this month.

The average yield on U.S. investment-grade bonds was 5.73% as of Monday, compared to 5.47% at the start of the year and 2.44% in January 2022 when the Fed began hiking rates to combat inflation, according to ICE BAML data.

"September tends to be a very heavy supply month, so people will sell Treasuries and existing credit to make room for new issuance," said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities USA.

Ten-year Treasury bond yields were last about nine basis points above Friday's market closing, at 4.27% from 4.180%, and 30-year yields similarly climbed about 9 bps to 4.38% from 4.285% on Friday.

Long-term Treasury yields, which move inversely to prices, have surged for much of the past couple of months as investors priced in the possibility of interest rates remaining higher for longer than anticipated, as the U.S. economy has proved surprisingly resilient to higher rates.

Other factors have also contributed to the selloff, from higher government bond supply to rising concerns around U.S. debt sustainability, as highlighted by Fitch’s downgrade of U.S. debt last month.

Yields retrenched last week but started climbing again on Friday.

With the Federal Reserve largely expected to keep interest rates on hold at its next rate-setting meeting this month, the corporate bond supply was seen as a factor contributing to higher yields in the coming weeks.

"I don’t necessarily think (the Fed) has got any more rate moves or rate tightenings left," said Tom di Galoma, managing director and co-head of global rates trading at BTIG.

"For right now, it’s just all about supply, and I think that’s what’s pushing yields higher," he said.

September is typically the second-busiest month for U.S. debt issuance, according to credit research analysts at JPMorgan Chase (NYSE:JPM), with an average issuance volume of $129 billion over the past four years outside 2020.

Among Tuesday's announced deals were a two-part senior unsecured note offering from Unilever (LON:ULVR) Capital Corp, three-part senior notes from tobacco company Philip Morris International (NYSE:PM) and a five-part note offering from automaker Volkswagen (ETR:VOWG_p).

NEW DELHI (Reuters) -Leaders of the world's richest and most powerful countries will attend the two-day G20 Summit in India's capital New Delhi starting September 9.

This is the first time India will host such a powerful group of world leaders. The capital has been adorned with ornamental flowers and fountains at traffic roundabouts while public buildings and sidewalks have been given a fresh coat of paint.

Security is being provided by anti-drone systems, cutouts of langurs to scare away monkeys and 130,000 police and para-military personnel.

WHAT IS THE G20?

The world's 20 major countries formed an economic grouping after the Asian financial crisis in 1999 with the understanding that such crises could no longer be contained within a nation's borders and required better international economic cooperation.

The bloc currently accounts for 80% of global gross domestic production (GDP) and 75% of international trade.

Its members include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, the United States and the European Union.

Although only treasury chiefs met in the initial years, heads of all member nations decided to meet once a year for a leaders' summit post the 2008 financial crisis.

WHAT ARE THE KEY ISSUES THIS YEAR?

Under India's year-long presidency, the bloc has centred discussions around more loans to developing nations from multilateral institutions, reforming international debt architecture, regulations on cryptocurrency and the impact of geopolitical uncertainties on food and energy security.

So far this year, the bloc has failed to issue any joint statements as it is deeply divided over language referring to the war in Ukraine.

While Russia and China are against blaming Moscow for the war in Ukraine, Western countries including the United States, France and Canada have sought a strong condemnation as a necessary condition for a joint statement.

SUMMIT THEME

India's G20 theme is derived from the Sanskrit phrase "Vasudhaiva Kutumbakam" which translates to “The World is One Family".

WHEN AND WHERE IS THE NEXT MEETING

India will hand over the presidency to Brazil on December 1.

(Reuters) - Goldman Sachs on Tuesday lowered its probability that a U.S recession would start in the next 12 months to 15% from an earlier 20% forecast.

The continued positive inflation and labor market data led to the cut, Goldman Sachs Chief Economist Jan Hatzius wrote in a note.

The investment bank said it expected reacceleration in real disposable income next year on the back of continued solid job growth and rising real wages.

It also noted the drag from monetary policy tightening will continue to diminish before "vanishing entirely" by early 2024.

U.S. consumer spending accelerated in July, but slowing inflation strengthened expectations that the Federal Reserve would keep interest rates unchanged in its policy meeting this month.

GS said it believed that Fed Chair Jerome Powell's "proceed carefully" approach signals that a September hike is "off the table" and the hurdle for a November hike is "significant".

Goldman added that it expected "very gradual" cuts of 25 basis points per quarter starting in second quarter of 2024.

BANGKOK (Reuters) -Thailand's central bank chief said on Tuesday that this year's economic growth and inflation were expected to be lower than previously forecast.

Last month, Bank of Thailand Governor Sethaput Suthiwartnarueput had said 2023 growth could come below the central bank's 3.6% forecast and a revised figure would be published in September. Last year's growth was 2.6%.

Inflation would gradually return to within target range, he said. A Reuters poll expects a rise of 0.61% for August. Data is due out later on Tuesday.

The current policy interest rate was close to a neutral level, Sethaput said. On Aug. 2, the central bank raised its key interest rate for a seventh straight meeting to 2.25%. It will next review monetary policy on Sept. 27.

"A neutral rate means it helps inflation stay in a sustainable range, and GDP grow at its potential of 3-4% without creating financial imbalances," he said.

The BOT has hiked the key rate by 175 basis points since August last year to curb price pressures.

Overall, the Southeast Asian country's economic recovery remains intact, Sethaput said, adding that 29 million foreign arrivals are still expected throughout the year.

Tourism remains a key driver, accounting for about 12% of GDP before the pandemic.

Speaking virtually at a Fitch economic seminar, he said second-quarter GDP was disappointing.

Thailand's economy grew 1.8% in the April-June period on the year and 0.2% on the quarter, sharply slowing from the previous quarter's 2.6% and 1.7%, respectively, as exports slumped.

TOKYO (Reuters) - Japanese household spending suffered its biggest drop in nearly 2-1/2 years squeezed by rising prices, although volatility in some items meant the outlook might not be as gloomy as the headline figures suggested.

Japan's economy grew much faster than expected in the second quarter, helped by the end of COVID-19 curbs and a resurgence in inbound tourism, and analysts expect private consumption to support overall growth amid weakness in global demand.

The household spending fell 5.0% in July from a year earlier, official data showed on Tuesday, sliding for five consecutive months and more than the median market forecast for a 2.5% decline.

On a seasonally adjusted month-on-month basis, household spending was down 2.7%, versus an estimated 0.5% gain.

Spending on dining out, transportation, culture and entertainment services increased with an uptick of the number of people who went out, but there were declines in a wide range of areas such as food and housing, an official at the Ministry of Internal Affairs and Communications said.

"The impact of price hikes has been felt to some extent," the official said, though he noted that the 5.0% drop included items that fluctuate widely such as housing and automobile purchase.

Japan's core consumer price index, which includes oil products but excludes volatile fresh food prices, rose 3.1% in August followed by a 3.3% increase the previous month. It held above the Bank Of Japan's 2% inflation target for the 16th straight month.

On the whole, private consumption will continue to recover as economic activity normalises and the decline in real wages is expected to narrow, said Masato Koike, economist at Sompo Institute Plus.

"Rising wages and the normalization of economic activity will lead to a recovery in consumption," Koike said.

That view was supported by a private survey showing Japan's service sector activity expanded at its quickest pace in three months in August, underpinned by robust consumer spending as inbound tourism regained momentum.

To view the data on the website of the Ministry of Internal Affairs and Communications, click here:

SEOUL (Reuters) - South Korea's annual consumer inflation accelerated to 3.4% in August while the month-on-month rate was the fastest since early 2017, which should keep policymakers on alert for any sustained uptick in prices.

The Bank of Korea (BOK) last month held interest rates steady for a fifth straight meeting, as it continued to prioritise price stabilisation amid heightened growth risks.

On a monthly basis, the consumer price index (CPI) rose 1.0% in August, after gaining 0.1% in the prior month, official data showed on Tuesday, beating economists' median forecast for a 0.3% rise in a Reuters survey.

Annual inflation, which accelerated for the first time in seven months, also topped the 2.7% expected by economists, and marked the quickest since April. It followed a 2.3% rise in July, which was the slowest in 2 years.

The BOK has said consumer inflation is likely to accelerate to around 3% in August and September, before easing again, meaning the latest figures should not come as a surprise to policymakers.

Commenting on the data, the finance ministry said the inflation rate was affected by temporary factors such as adverse weather conditions, along with a rise in global energy prices, but that the overall slowing trend in prices was maintained.

Broken down by sector, prices of petroleum products jumped 8.1% over the month, agricultural prices surged 10.5%, while public service prices climbed 0.5%.

Core CPI, which excludes volatile food and energy prices, rose 3.3% on an annual basis, unchanged from the previous month.

(Reuters) -China is launching a campaign to revive its lagging stock market, and boost investor confidence in an ailing economy. A slew of measures announced include reducing trading costs, slowing the pace of initial public offerings (IPOs), encouraging margin financing and protecting small investors.The securities regulator also introduced fresh measures on Friday to improve the two-year old Beijing Stock Exchange, focusing on boosting the market's liquidity. Here are what the authorities have done, and what more to expect.

IMPROVING BEIJING STOCK EXCHANGE:

China Securities Regulatory Commission (CSRC) aims to boost liquidity in the market by relaxing investor thresholds and improving trading mechanisms. The team of market-makers will be expanded, and all shares listed in the market will be eligible for margin financing, the CSRC said.

The CSRC said it will guide more mutual funds to expand their investments in the market.

It will seek to reform and invigorate the market, focusing on funding innovative small companies that specialise in niche sectors. The securities regulator also issued rules to ease listing rules and improve listed companies' quality.

TRANSACTION COSTS:

The stamp duty on stock trading was halved on Aug 28, the finance ministry announced. Transaction handling fees submitted by brokers to the exchanges had also been reduced, according to the CSRC.

Chinese stock exchanges will also lower margin requirements to encourage financing by investors. The measure will be effective on September 8th.

And, following CSRC guidance, a growing number of mutual fund companies are cutting management fees.

CAPITAL RAISING AND REFINANCING:

The CSRC said China would slow the pace of initial public offerings (IPOs) to promote a dynamic balance between capital raising and investing activities.

The CSRC will also tighten restrictions on refinancing activities by listed firms, targeting loss-making and underperforming companies.

PROTECTING SMALL INVESTORS:

The CSRC tightened rules on large shareholders' selling shares when the traded price is lower than its IPO price or net asset value per share, or when the company has not declared enough cash dividends in the past three years.

The CSRC tightened scrutiny over programme trading after some investors blamed the programmes for increasing market volatility.

Disappointing some market players, the CSRC kept in place a bar on traders buying and selling shares on the same day, arguing that it could drive speculation and harm small investors.

Currently, investors in China can only sell stocks on the second day after their purchase.

MORE TO COME:

China's securities regulator approved the launch of 37 retail funds, signalling faster registration for index funds and boosting the development of equity funds. Market participants expect the emergence of more innovative index products.

The regulator is working on optimizing rules covering share repurchases, including relaxing requirements when share prices tumble. Company share repurchases are considered a good sign by investors, as it implies the stock is undervalued.

The regulator pledged support to key break-through technology companies and is evaluating more options to meet those companies' financing needs.

The CSRC is planning to involve more long-term investors such as pension funds in investing in China's capital market.

The regulator is also studying the possibility of extending trading hours.

By Arathy Somasekhar

HOUSTON (Reuters) -U.S. crude oil stocks have fallen to their lowest level this year and likely will shrink further, analysts said, as record demand, producer supply cuts, weaker futures and rising storage costs all point to increasing drawdowns.

A tight crude market is poised to extend into 2024 and add upward pressure on global oil prices, they said. In a bullish sign, U.S. inventories last week dropped 10.6 million barrels, hitting the lowest level since December 2022's 420.65 million barrels. [EIA/S]

"We are already around 2022's close and I don't think we are getting a build in the second half of the year," said Al Salazar, a senior vice president at energy technology firm Enverus. "$100 a barrel (for Brent crude) is definitely within striking range."

Brent crude futures were trading at $88.08 a barrel on Friday, while U.S. crude futures were trading at $85.16 per barrel.

World demand is poised to hit a record high this year on strong air travel, power generation needs and surging Chinese petrochemical activity, the International Energy Agency forecast in August. Demand could grow this year by 2.2 million barrels per day (bpd) to 102.2 million bpd.

Oil supply will not match the rise in demand, the IEA said, adding it expects output to rise by 1.5 million bpd. Supply has fallen after Saudi Arabia voluntarily cut output in recent months and is likely to outweigh increases in U.S. shale and by Iran and Venezuela.

INVENTORY WITHDRAWALS

Overall, U.S. oil production could average 12.8 million bpd in 2023, but analysts are skeptical that shale gains can be sustained without a sharp increase in drilling activity. Active U.S. oil rigs this month fell to the lowest since February 2022. [RIG/U]

Near-term U.S. oil prices also are higher than futures, which has further encouraged withdrawals from inventory. U.S. crude for delivery in October recently traded about $6 higher than for delivery 12 months out.

Even when six-month futures in late July briefly rose above those for October delivery, U.S. stocks fell as central bankers raised interest rates, lifting costs to buy and store oil.

"It's going to be pretty difficult to incentivize that storage," said Christopher Haines, an analyst at Energy Aspects.

Prices of crude for future deliveries need to trade at least 50 cents above October prices before it is profitable to store crude, said Ernie Barsamian, chief executive of terminal storage clearinghouse The Tank Tiger.

That compares with estimates of 10-20 cents when interest rates hovered around 1%.

"We are likely moving to a new normal of lower inventory forward cover," analysts at Energy Aspects wrote in a note.

BEIJING (Reuters) - China's central government has approved setting up a special bureau within the National Development and Reform Commission (NDRC) to promote the development and growth of the private economy, the NDRC said on Monday.

The bureau will be responsible for devising policies to promote the development of private companies, both domestically and in terms of their international competitiveness, and provide a trouble-shooting function, said Cong Liang, the state planner's vice chairman.

The private sector is responsible for 80% of new urban jobs, but has struggled to attract investment amid a frail economic recovery over the first half of the year, with business owners also constrained by weak domestic demand.

"This is a powerful initiative ... that fully reflects the great importance the Chinese Communist Party Central Committee attaches to the private economy," said Zhang Shixin, an official within the state planner.

Few analysts expect policymakers to introduce any aggressive stimulus due to concern about debt and financial risk, with the government instead likely continuing to introduce incremental measures in the face of sustained pressure to shore up growth.

(Reuters) - As an awful August gives way to an uncertain September, investors hope this month will confirm that the seemingly relentless rise in interest rates will end soon, meaning respite for both stocks and bonds.

But there are a few snags. This September is chock-full of risk events, including central bank meetings, a G20 summit and make-or-break data, not to mention that it tends to be the worst month of the year for the mighty S&P 500.

Here's a look at the week ahead in markets from Ira Iosebashvili in New York, Kevin Buckland in Tokyo, Dhara Ranasinghe, Libby George and Naomi Rovnick in London.

1/ SCARY SEPTEMBER

Now the Federal Reserve's Jackson Hole confab is over, investors are strapping in for a potentially volatile month. 

The S&P 500 tends to post its worst monthly performance in September, with an average decline of 0.7%, according to CFRA data going back to 1945.

There are plenty of catalysts for volatility. The Sept. 13 U.S. inflation reading would likely have to support the narrative of cooling consumer prices and resilient growth that has boosted stocks for most of the year.

Investors will also scrutinise the message from Fed Chairman Jerome Powell after the central bank's Sept. 20 meeting to determine the likelihood of another hike this year.

Meanwhile, there's a risk of a fourth federal government shutdown in a decade if squabbling lawmakers cannot reach a deal by Sept. 30, when funding runs out with the end of the current fiscal year. On the data front, U.S. services sector activity is due Wednesday.

2/ THE SICK MAN OF EUROPE

Germany looks likely to be the only major economy to contract this year. Business activity there shrank at the fastest pace in over three years in August, business sentiment has deteriorated and the economy stagnated in the second quarter.

No wonder the region's economic powerhouse is once again being called the sick man of Europe.

July industrial orders and production data in the coming week may reinforce that perception, supporting the case for the ECB to leave rates unchanged in September.

Germany's coalition just agreed a 7 bln euro ($7.56 bln) corporate tax relief package to give the economy what Chancellor Olaf Scholz called a "big boost".

But economists are sceptical, noting that at just 0.2% of GDP, the package is no game-changer and that the sick man will need more medicine.

3/ A BRIGHTER G20?

Some progress this summer on debt deals for the string of struggling emerging economies in, or facing, default has sharply driven up year-to-date returns for the sovereign bonds for Pakistan, Sri Lanka, Ghana and Zambia.

This bright spot could, during the G20 Summit in Delhi, support ongoing efforts to tackle the persistent, damaging debt crisis among developing nations.

Multilateral institutions and creditor countries have used most international gatherings to refine the Common Framework agreement that was meant to make recovering from debt distress quicker and easier.

But the absence of China’s President Xi Jinping in Delhi could cast a pall. China has become the biggest bilateral lender to some developing nations in recent years, and its reluctance to make bigger concessions during restructuring efforts has been a core sticking point.

4/ SMOOTH TRANSITION

    The Reserve Bank of Australia is set to hold rates steady for a third straight meeting on Tuesday, as Governor Philip Lowe prepares to pass the baton to deputy Michele Bullock.

    A sharp cooling of inflation hints at an easier road for Bullock, after Lowe's (NYSE:LOW) controversy-filled legacy of painful backtracks and abrupt shifts that cost him a second term.

    Rates are at an 11-year high of 4.1% after 400 bps of tightening since May 2022. Traders expect that to be the peak, after inflation unexpectedly eased to a 17-month trough below 5% in July.

    But it won't be all plain sailing. Economic risks in top trade partner China are ramping up right as things at home look rosier.

5/ BoE ON THE CUSP

Is Britain's economy slowing enough for the Bank of England to end its battle against inflation?

UK retail sales for August, as measured by the British Retail Consortium on September 5, may harden the view expressed in other surveys that consumers are deeply cautious.

Sentiment has soured alongside a slowing housing market, following 14 back-to-back rate increases. Monthly house price data from Halifax on September 7 will indicate whether the 9-trillion pound ($11.37 trillion) UK residential property sector has weakened further.

But the economy, which has defied recession forecasts, could still get a boost.

Headline inflation dropped to 6.8% in July, energy costs are set to fall from October and wage growth is now positive in real terms.

If this sends Brits flocking back to the shops, it could strengthen the BoE's resolve to stay tough on inflation.

($1 = 0.7914 pounds)