BEIJING (Reuters) - China's manufacturing activity unexpectedly fell in May, keeping alive calls for fresh stimulus as a protracted property crisis in the world's second-largest economy continues to weigh on business, consumer and investor confidence.

The official manufacturing purchasing managers' index (PMI) dropped to 49.5 in May from 50.4 in April, the National Bureau of Statistics (NBS) said on Friday, below the 50-mark separating growth from contraction and missing analysts' forecast of 50.4.

The disappointing number adds to a series of recent indicators showing the $18.6 trillion economy is struggling to get back on its feet, eroding earlier optimism seen after better-than-expected output and trade data.

"I think the data particularly reflects soft domestic demand, the housing sector continued to worsen and retail sales were not strong," said Xu Tianchen, senior economist at the Economist Intelligence Unit.

"The May reading may indicate a temporary blip. We'll probably see an improvement in June as new government policies start to impact, such as the property rescue plan and the issuance of special sovereign bonds," he added.

The PMI's sub-indices for new orders and new export orders both tipped back into contraction after two months of growth, while employment continued to shrink.

The services sub-index under the NBS non-manufacturing survey improved to 50.5 in May from 50.3 in April. But growth as represented by the broader services index, which also includes construction, slowed in May to 51.1 from 51.2 a month prior.

Problems in the property sector have had a negative impact across broad areas of China's economy and slowed Beijing's efforts to shift its growth model more towards domestic consumption from debt-fuelled investment.

Retail sales last month grew at their slowest since December 2022 while new home prices fell at their fastest rate in nine years, suggesting it is too early to say if the battered economy has finally turned a corner.

The International Monetary Fund on Wednesday revised up its China growth forecast by 0.4 percentage points to 5% for 2024 and 4.5% in 2025, but warned the property sector remained a key growth risk.

China this month unveiled "historic" steps to stabilise the property market, but analysts say the measures fall short of what is required for a sustainable recovery.

The IMF said it saw "scope for a more comprehensive policy package to address property sector issues."

Nie Wen, an economist at Shanghai Hwabao Trust, said the decline reinforced the case for more support.

"There is still a need to strengthen stimulus on the demand side, while at the same time sorting the credit channels as soon as possible to avoid financial institutions' balance sheets shrinking, which would have a negative effect on the economy," Nie said.

By Luc Cohen

NEW YORK (Reuters) - In their opening statement at Donald Trump’s criminal trial, the prosecutors seeking to win the first-ever criminal conviction of a sitting or former U.S. president made a bold prediction: they would have hard evidence to back up testimony from Michael Cohen, the star witness branded a liar by the defense. 

Over the next several weeks, jurors heard testimony from insiders at Trump’s real estate company, his 2016 presidential campaign, and his White House that methodically backed up the two core elements of Manhattan District Alvin Bragg’s case: that Trump was aware of a “catch-and-kill” conspiracy to buy the silence of people with negative information before the election, and that he was involved in a cover-up of Cohen’s hush money payment to a porn star. 

That testimony - coupled with evidence such as bank records, emails and a surreptitious recording of Trump speaking about a hush money payment - culminated in the 12-member jury finding Trump guilty of criminal charges.

Its verdict: He illegally falsified business records to hide his reimbursement to Cohen for the $130,000 Cohen paid to buy the silence of porn star Stormy Daniels before the 2016 election about an alleged sexual encounter she had with Trump in 2006.

To be sure, jury deliberations are secret and the reasoning behind the decision to convict will not be clear unless any jurors decide to speak publicly. Trump is almost certain to appeal his conviction.

Cohen testified at the trial in New York state criminal court in Manhattan that the reimbursement payments were falsely labeled as legal retainer fees in Trump’s family real estate company’s books. Cohen said Trump directed him to pay off Daniels, and that he would not have done so without getting paid back. 

“He stated to me that he had spoken to some friends, some individuals, very smart people, and that: 'It's $130,000. You're like a billionaire. Just pay it,'” Cohen said on May 13. “And he expressed to me: 'Just do it.'”

The verdict vindicated Bragg, the Manhattan district attorney who was criticized by both Trump's fellow Republicans and some of Bragg's fellow Democrats for bringing a case involving well-known allegations of sexual impropriety, even if the transaction that mattered was financial.

Bragg argued the case was truly about an effort to corrupt the 2016 election - not sex.

"It was the subversion of democracy," prosecutor Joshua Steinglass said in his May 28 closing statement. The "catch-and-kill" conspiracy, he said, was meant "to manipulate and defraud the voters, to pull the wool over their eyes in a coordinated fashion."

The case is widely viewed as less consequential than the other three criminal cases Trump faces on charges over efforts to overturn his 2020 election loss to Democratic President Joe Biden and his retention of sensitive government documents after leaving the White House in 2021. 

Trump has pleaded not guilty in the other three cases, which are unlikely to reach juries before his Nov. 5 election rematch with Biden.

'OUT OF CHARACTER’

One challenge for Bragg's case was Cohen's credibility. Cohen went to prison after pleading guilty in 2018 to violating campaign finance law with the payment to Daniels and lying to Congress in 2017 about a Trump Organization real estate project in Russia. Trump's lawyer Todd Blanche hounded Cohen on cross-examination about his lies to journalists and an instance in which he stole from Trump's company.

So prosecutors needed plenty of evidence backing up Cohen’s testimony that Trump was aware of Cohen’s payment to Daniels, which they argued was part of a broader conspiracy to buy the silence of people with potentially negative information about Trump in violation of campaign finance laws.

Jurors did not have to rely solely on Cohen’s testimony to accept that Trump intended to conceal that alleged conspiracy by labeling his 2017 payments to Cohen as legal retainer fees.

David Pecker, the then-publisher of the National Enquirer tabloid, testified that he agreed at an August 2015 meeting with Trump and Cohen to be the campaign’s “eyes and ears” for women coming forward with unflattering stories about Trump.

Jurors heard a tape Cohen surreptitiously recorded of Trump on Sept. 6, 2016, discussing a hush money payment Pecker’s company made to Karen McDougal, a Playboy model who says she had a year-long affair with Trump in 2006 and 2007. Trump denied having ever had a sexual relationship with her or with Daniels. 

Jurors saw phone records showing Cohen had several calls with Trump and his bodyguard Keith Schiller - whom Cohen said would hand his phone to Trump - around the time of frantic negotiations with Daniels’ lawyer over the payment in October 2016. 

In some of his most damning testimony, Cohen said he, Trump and then-Trump Organization Chief Financial Officer Allen Weisselberg discussed the repayment plan in a January 2017 meeting shortly before Trump’s inauguration as president. 

Weisselberg, who is serving a five-month jail sentence after pleading guilty to perjury in a separate case, did not testify for either side at the trial. But jurors saw Weisselberg’s handwritten notes - jotted down on a copy of the wire transfer receipt for Cohen’s payment to Daniels’ lawyer - with instructions as to how Trump Organization controller Jeff McConney should pay Cohen. McConney testified that he understood the payments to be a reimbursement for Cohen, not legal fees. 

Hope Hicks, a former communications aide of Trump’s, recalled Trump telling her that Cohen paid Daniels “out of the kindness of his own heart” - consistent with the defense’s efforts to distance Trump himself from the hush money deals.

But Hicks expressed skepticism of that claim.

“That,” Hicks testified on May 3, “would be out of character for Michael.”

(Reuters) - Contract signings for U.S. home purchases fell by the most in three years in April and the overall level of activity was the lowest since the onset of the COVID-19 pandemic in the spring of 2020, as high interest rates keep a lid on the housing market, the National Association of Realtors said on Thursday.

The NAR said its pending home sales index fell 7.7% in April to 72.3 from an upwardly revised 78.3 reading in March. The drop was the largest since February 2021 and the index level was the lowest since the record-low reading of 71.8 in April of 2020.

The index is meant to be predictive of completed home sales transactions one to two months later.

"The impact of escalating interest rates throughout April dampened home buying, even with more inventory in the market," said Lawrence Yun, the NAR's chief economist. "But the Federal Reserve's anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply."

The Fed has raised interest rates by 5.25 percentage points since March 2020 to combat inflation. Rates have been on hold since last July and the year began with expectations for as many as three quarter-percentage-point rate cuts this year, but stiffer-than-expected inflation to start the year has changed the Fed's tone. Bond market pricing now reflects the likelihood of no more than two rate cuts this year.

Investing.com -- U.S. futures inch lower on Thursday following a drop in equities in the previous session, with concerns rising over weak Treasury sales and the outlook for possible Federal Reserve interest rate reductions. Salesforce (NYSE:CRM) shares drop in extended hours dealmaking after the business software group's second-quarter misses estimates. Elsewhere, activist investor Nelson Peltz reportedly liquidates his stake in Disney after a failed proxy battle earlier this year.

1. Futures lower

U.S. stock futures slipped on Thursday, pointing to an extension in losses logged in the prior session, as investors fretted about a spike in Treasury yields and the timing of potential interest rate cuts by the Federal Reserve.

By 03:41 ET (07:41 GMT), the Dow futures contract had shed 334 points or 0.9%, S&P 500 futures had dipped by 27 points or 0.5%, and Nasdaq 100 futures had fallen by 110 points or 0.6%.

The main averages on Wall Street sank on Wednesday, pulled down by an uptick in Treasury yields sparked by tepid demand for new U.S. government debt auctions. The yield on the benchmark 10-year Treasury yield climbed to a four-week peak of 4.6%, adding to gains clocked on Tuesday.

Signs of sticky inflation and recent commentary from Fed officials have also led some market observers to ratchet down their expectations for rate reductions this year. Instead of two cuts in 2024, the closely-monitored CME FedWatch Tool shows that traders are now betting that the central bank will roll out just one in either November or December.

This sentiment could be further impacted by the release of the monthly personal consumption expenditures price index -- the Fed's preferred measure of inflation -- later this week. Policymakers have suggested that they need to see more evidence that price gains are cooling back to their 2% target level before they can start to lower borrowing costs down from more than two-decade highs.

2. Salesforce slumps after-hours as second-quarter forecast disappoints

Shares in Salesforce tumbled by more than 16% in extended hours trading after the workplace software group unveiled current-quarter guidance that fell short of analysts' estimates.

The outlook was impacted by weak client spending on its business-oriented products and services, denting optimism around the California-based company's plan to use generative artificial intelligence to boost returns. Chief Executive Marc Benioff struck a bullish tone on AI, however, saying that it continues to present a "massive opportunity for our customers to connect with their customers in a whole new way."

For its fiscal second quarter, Salesforce projected that adjusted per-share earnings would be in a range of $1.31 to $1.33 on revenue of between $9.20 billion and $9.25 billion. Wall Street forecasts had seen the figures at $1.47 and $9.34 billion, respectively.

The firm also slashed its expectations for annual subscription and support revenue growth down to "slightly below" 10% versus a year ago. It had previously forecast an increase of 10% in February.

In other corporate news, HP Inc's (NYSE:HPQ) second-quarter sales beat estimates, in a sign of improving strength in the personal computing market. Shares in the group were higher following the closing bell.

3. Peltz liquidates Disney stake - CNBC

Activist investor Nelson Peltz has offloaded his entire stake in Walt Disney Company (NYSE:NYSE:DIS), according to a CNBC report on Wednesday.

Peltz reportedly sold his Disney shares at approximately $120 each, a transaction that raked in roughly $1 billion. The stock closed at $100.88 on Wednesday, and has risen by more than 11% so far this year.

The move comes on the heels of Peltz's investment firm, Trian Partners, losing a proxy battle at a meeting of Disney shareholders in early April. During the gathering, stakeholders backed the re-election of the entertainment giant's full board of directors, rejecting Peltz's attempts to secure seats for himself and Jay Rasulo, Disney's former Chief Financial Officer.

Peltz has been a vocal critic of Disney's governance for some time, specifically hitting out at the company's strategy for its crucial streaming service as well as its succession plans for Chief Executive Bob Iger.

4. UBS reshuffles leadership team, considers CEO succession - FT

Swiss lender UBS has reshuffled its executive board and divided responsibility for its key wealth management segment between two managers who are considered to be the mostly likely successors to current Chief Executive Sergio Ermotti, the Financial Times has reported.

Citing a memo to staff sent from Ermotti, the FT reported that wealth management boss Iqbal Khan and investment bank head Rob Karofsky will become co-presidents of the wealth management unit. Under the plan, Khan will reportedly move to Asia to lead UBS's Asia-Pacific business, while Karofsky will helm its Americas division.

Meanwhile, the bank, which is in the process of assimilating its one-time rival Credit Suisse into its operations following a government-brokered tie-up last year, is seeking internal candidates to replace Ermotti after his expected retirement in 2027, the FT said.

The top-level shake-up will also see the departure of Credit Suisse CEO Ulrich Körner and the retirement of UBS Americas head Naureen Hassan, the paper reported. Körner will be the last chief executive in the 168-year history of Credit Suisse.

5. Crude declines despite U.S. inventory draw

Crude prices edged lower on Thursday, as worries over high borrowing costs outweighed optimism over a bigger-than-expected draw in U.S. inventories.

By 03:42 ET, the U.S. crude futures (WTI) traded 0.5% lower at $78.81 per barrel, while the Brent contract dropped 0.6% to $82.97 a barrel.

Data from the American Petroleum Institute showed on Wednesday that U.S. oil inventories shrank nearly 6.5 million barrels last week, much more than expectations for a draw of 1.9 million barrels.

The data usually heralds a similar reading from official inventory data, which is due later Thursday. The outsized draw suggested that U.S. fuel demand was picking up with the onset of the travel-heavy summer season, widely seen as the Memorial Day weekend.

By Milounee Purohit

BENGALURU (Reuters) - Average home prices in India are expected to rise steadily over the next few years as the country's rich drive up demand for luxury housing, according to property experts polled by Reuters who also said there would be a shortage of affordable homes.

Home purchases are increasingly driven by a select few in a country of more than 1.4 billion people, mostly those unaffected by higher interest rates.

Economic growth in Asia's third-largest economy is expected to continue outpacing its major peers, driving demand for housing, even though economists argue the benefits of that growth are being skewed more towards the upper classes.

Average home prices are forecast to rise around 6% this year and next, slightly below the 7% expected in a March poll, according to the median forecast from a May 10-29 survey of 15 property market experts.

House prices rose 4.3% in 2023, according to Reuters calculations based on the Reserve Bank of India's House Price Index.

"Property prices are expected to maintain an upward trajectory...because of consistent demand and limited ready supply," said Ankita Sood, director and head of research at REA India. "The demand for high-value properties from investors and high-income individuals fuels this upward trend."

The luxury segment accounted for 15-16% of total sales before the pandemic but has risen to around 28%, Sood said.

Further rises in house prices will worsen affordability for first time buyers who are already struggling to save up the initial down payment.

The RBI, which raised interest rates by 250 basis points between May 2022 and February 2023 to cool inflation, is broadly expected to cut them next quarter, although a stable rupee and a strong economy leaves the central bank with little incentive to act.

That suggests relatively high mortgage rates are here to stay, adding to pressure on first-time buyers.

When asked what would happen to affordability for first-time purchasers over the coming year, seven analysts said it would improve and the remaining six said it would worsen.

CBRE's Atif Khan expects affordability to improve as income levels rise in tier I cities such as Mumbai and Delhi, but Colliers International's Ajay Sharma said a "flattening" of the jobs market would cause it to slip.

Finding affordable housing is a major challenge for the millions who flock to cities as India rapidly urbanises.

Despite government initiatives to build affordable homes, a strong majority of respondents, 12 of 15, said demand would not be met over the next two to three years. The other three forecast excess supply.

"Supply of affordable homes is affected by rising land prices (and) developers focusing on bigger ticket-size segments where sales momentum is quite robust," said Rohan Sharma, director at JLL Research.

(For other stories from the Reuters quarterly housing market polls:)

By Rae Wee

SINGAPORE (Reuters) - Asian stocks were a sea of red on Thursday and bonds slid on bets global interest rates would stay higher for longer, as investors looked to key inflation readings at the end of the week for further clues on the future path of monetary policy.

The dollar rode U.S. Treasury yields higher while gold remained under pressure on renewed expectations that the Federal Reserve is unlikely to cut rates any time soon.

The latest halt in the global risk rally has come on the back of data pointing to lingering inflationary pressures across major economies.

"Hotter and stickier than expected global inflation appears to be taking the air out of asset markets," said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank. "Equities slid and bonds swooned, and USD swaggered."

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5%, tracking a negative lead from Wall Street and extending its 1.6% decline from the previous session.

Japan's Nikkei tumbled more than 1.5%, while U.S. and European futures similarly fell. EUROSTOXX 50 futures eased 0.18% while S&P 500 futures dipped 0.35%.

Nasdaq futures slumped 0.45%.

A Fed survey on Wednesday showed U.S. economic activity continued to expand from early April through mid-May but firms grew more pessimistic about the future while inflation increased at a modest pace.

Across the Atlantic, data the same day showed German inflation rose slightly more than forecast to 2.8% in May, ahead of the wider euro zone bloc's reading on Friday.

The main highlight of the week for markets, however, is Friday's U.S. core personal consumption expenditures (PCE) price index report - the Federal Reserve's preferred measure of inflation. Expectations are for it to hold steady on a monthly basis.

"If we look at data that has led us to this point, I have a hard time believing a softer-than-expected PCE report will arrive on Friday," said Matt Simpson, senior market analyst at City Index.

"From this perspective, PCE not ticking higher could be a welcome surprise. But should it heat up further from sticky levels, appetite for risk will be taken out the back for a good kicking."

U.S. Treasury yields meanwhile stayed elevated on Thursday, in part due to a weak debt auction the previous day. The benchmark 10-year yield was last at 4.6197%, while the two-year yield steadied at 4.9830%.

Bond yields move inversely to prices.

Japanese government bond (JGB) yields similarly notched fresh multi-year peaks, on growing expectations that further rate hikes from the Bank of Japan could be imminent.

The 10-year JGB yield peaked at 1.1% in early Asia trade, its highest since July 2011.

Elsewhere in Asia, Chinese blue chips eased 0.25%, tracking its regional peers despite the International Monetary Fund's upgrade to China's 2024 and 2025 GDP growth forecasts.

Hong Kong's Hang Seng Index tacked on 0.17%.

DOLLAR REIGN

In the currency market, the dollar was on the front foot, knocking the euro to an over two-week low of $1.07955.

The yen last stood at 157.43 per dollar, after having slid to a four-week low of 157.715 in the previous session.

The Australian dollar edged 0.1% higher to $0.6617, after a brief lift in the previous session on data which showed domestic inflation unexpectedly picked up to a five-month high in April.

"This was not the inflation report the Reserve Bank of Australia would have wanted to see," said Rob Carnell, ING's regional head of research for Asia Pacific.

Oil prices rose slightly, recovering some lost ground from Wednesday on worries over weak U.S. gasoline demand and higher-for-longer interest rates.

Brent steadied at $83.60 per barrel while U.S. crude ticked 0.03% higher to $79.25 a barrel. [O/R]

Spot gold fell 0.2% to $2,334.15 an ounce. [GOL/]

NEW YORK (Reuters) - The U.S. Treasury Department on Wednesday said regulators should weigh new guidance or rules aimed at curbing financial risks from nonfungible tokens, or NFTs, a type of digital asset it deemed highly prone to fraud.

WHY IT'S IMPORTANT

NFTs, blockchain-based images, videos, music or text, surged in popularity during the coronavirus pandemic. The assets are highly susceptible to scammers and can be used to launder illicit funds, the Treasury Department said in a report published on Wednesday.

Still, other sectors - including other digital assets - pose greater risks for illicit finance, so regulating NFTs should not supersede other priorities, it said.

THE CONTEXT

U.S. regulators have been looking to better police markets for digital assets.

KEY QUOTE

"The NFT market is particularly vulnerable to fraud and scams," the Treasury Department said.

By Lindsay (NYSE:LNN) Dunsmuir

(Reuters) -U.S. economic activity continued to expand from early April through mid-May but firms grew more downbeat about the future amid weakening consumer demand while inflation continued to increase at a modest pace, a U.S. Federal Reserve survey showed on Wednesday, as central bankers mull how long they will need to keep interest rates at current levels.

The U.S. central bank's latest temperature check on the health of the economy also showed that the jobs market continues to gradually cool back down toward more normalized levels.

The survey, released roughly every six weeks, comes as policymakers remain uncertain on when to start a rate-cutting cycle after holding interest rates in the range of 5.25% to 5.50% for the past 10 months. They are keenly watching trends in activity, jobs and pricing pressures in order to make their decision.

"National economic activity continued to expand...however, conditions varied across industries and districts," the Fed said in its survey, known as the "Beige Book," which polled business contacts across the central bank's 12 districts through May 20. "Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risk."

Waning consumer demand was an ongoing concern for many firms, the Dallas Fed noted, while the continued conflict in the Middle East and further geopolitical tensions across the world were also cited as downside risks.

Most Fed districts reported slight or modest growth in economic activity, while two noted no change, the survey said. In particular, retail spending was described as flat to up slightly, echoing recent data that indicated consumers are pulling back on spending.

The Fed's benchmark interest rate is set to remain unchanged at the next policy meeting on June 11-12 and Fed officials, while all but ruling out another rate hike, have indicated they need consistent encouraging inflation data over a number of months before lowering borrowing costs after being stung by bigger-than expected price increases the first three months of the year.

While that worrying trend seems to have reversed in April inflation currently remains, by the Fed's preferred measure, almost a percentage point higher than its 2% target rate. The latest reading of the Fed's key inflation gauge is scheduled for release on Friday.

MORE SENSITIVE CONSUMERS

Contacts in most Fed districts noted consumers were pushing back against additional price increases. One large clothing retailer told the Boston Fed it planned to implement "modest price reductions on selected items in early fall in a bid to boost sales."

However, there are also some signs inflation pressures may be reaccelerating again. "Many districts observed a continued increase in input costs," the report said. A separate survey earlier this month showed manufacturers in May reported a surge in prices for a range of inputs, suggesting that goods inflation could pick up in the months ahead.

"Consumers are becoming more price-conscious, likely putting pressure on profit margins. We should expect more discounts and incentives as some consumers struggle with persistently high prices," said Jeffrey Roach, chief economist at LPL Financial (NASDAQ:LPLA) following the release of the report.

For Fed officials there was welcome news on the labor market, with employment described as rising at a slight pace overall, better labor availability across a majority of Fed districts and less employee turnover.

For example, a winery in central Minnesota said that it received "a lot more applications for part-time (and) seasonal workers this year, which is very encouraging," the Minneapolis Fed reported.

Wage growth continued to grow mostly at a moderate pace but several Fed districts reported firms telling them it was now at pre-pandemic historical averages or was normalizing toward those rates.

U.S. job gains were the fewest in six months in April and the increase in annual wages fell below 4.0% for the first time in nearly three years, although the labor market remains fairly tight.

Investing.com -- U.S. futures point lower following a mixed session on Wall Street on Tuesday, with traders keeping a close eye on upcoming inflation data later this week. Salesforce (NYSE:CRM)'s Data Cloud unit is set to be in the spotlight when the business software company reports its latest quarterly results after the bell, while American Airlines (NASDAQ:AAL) cuts its outlook for the current three-month period. Elsewhere, BHP requests an extension to a looming deadline facing its negotiations over a multi-billion pound takeover of rival Anglo American (JO:AGLJ).

1. Futures lower

U.S. stock futures edged down on Wednesday, as investors looked ahead to key inflation data later this week that could influence how the Federal Reserve approaches potential interest rate cuts in 2024.

By 03:38 ET (07:38 GMT), the S&P 500 futures contract had shed 21 points or 0.4%, Nasdaq 100 futures had dipped by 70 points or 0.4%, and Dow futures had dropped by 168 points or 0.4%.

The tech-heavy Nasdaq Composite closed higher in the prior session thanks in part to a jump in shares in artificial intelligence chipmaker Nvidia (NASDAQ:NVDA). A closely-watched monitor of semiconductors added 1.9%, boosting the benchmark S&P 500. The blue-chip Dow Jones Industrial Average dipped, weighed down by an uptick in U.S. Treasury yields.

Traders are awaiting the release of the monthly personal consumption expenditures price index on Friday. The figure is widely considered to be the Fed's preferred gauge of inflation, meaning it could factor into how policymakers regard the trajectory of price gains. Signs of sticky inflation have led several officials to suggest in recent days that they would like to see more evidence of cooling prices before starting to bring rates down from more than two-decade highs.

Investing.com -- U.S. futures point lower following a mixed session on Wall Street on Tuesday, with traders keeping a close eye on upcoming inflation data later this week. Salesforce (NYSE:CRM)'s Data Cloud unit is set to be in the spotlight when the business software company reports its latest quarterly results after the bell, while American Airlines (NASDAQ:AAL) cuts its outlook for the current three-month period. Elsewhere, BHP requests an extension to a looming deadline facing its negotiations over a multi-billion pound takeover of rival Anglo American (JO:AGLJ).

1. Futures lower

U.S. stock futures edged down on Wednesday, as investors looked ahead to key inflation data later this week that could influence how the Federal Reserve approaches potential interest rate cuts in 2024.

By 03:38 ET (07:38 GMT), the S&P 500 futures contract had shed 21 points or 0.4%, Nasdaq 100 futures had dipped by 70 points or 0.4%, and Dow futures had dropped by 168 points or 0.4%.

The tech-heavy Nasdaq Composite closed higher in the prior session thanks in part to a jump in shares in artificial intelligence chipmaker Nvidia (NASDAQ:NVDA). A closely-watched monitor of semiconductors added 1.9%, boosting the benchmark S&P 500. The blue-chip Dow Jones Industrial Average dipped, weighed down by an uptick in U.S. Treasury yields.

Traders are awaiting the release of the monthly personal consumption expenditures price index on Friday. The figure is widely considered to be the Fed's preferred gauge of inflation, meaning it could factor into how policymakers regard the trajectory of price gains. Signs of sticky inflation have led several officials to suggest in recent days that they would like to see more evidence of cooling prices before starting to bring rates down from more than two-decade highs.

By Ankur Banerjee

SINGAPORE (Reuters) -The dollar was bolstered on Wednesday by rising expectations the Federal Reserve is unlikely to cut rates until later this year ahead of crucial inflation readings this week, while the yen drifted to its weakest in four weeks.

The dollar was also lifted by rising Treasury yields after a lacklustre debt auction for sales of two-year and five-year notes that raised doubts about demand for U.S. government debt.

The euro was 0.09% lower at $1.0848 but on course for a 1.7% gain for the month, its first month of gains in 2024. Sterling was last at $1.27525, on course for a 2% gain in May.

Data on Tuesday showed U.S. consumer confidence unexpectedly improved in May after deteriorating for three straight months, but worries about inflation persisted and many households expected higher interest rates over the next year.

The mixed survey comes as markets contemplate the Fed's next move, with traders pricing in 34 basis points of cuts this year compared with 150 bps of easing priced in at the start of 2024.

A rate cut in September is now priced in at 44%, the CME FedWatch tool showed, as still sticky inflation along with pockets of weakness in the world's largest economy amid a strong labour market keep shifting expectations around U.S. rates.

Market focus this week will be on a slew of inflation reports, with German inflation data due on Wednesday and the wider euro zone's reading on Friday.

The main event though will be when the U.S. core personal consumption expenditures (PCE) price index report - the Federal Reserve's preferred measure of inflation - is released on Friday. Expectations are for it to hold steady on a monthly basis.

Against a basket of currencies, the dollar index was little changed at 104.7, inching away from the near two-week low of 104.33 it touched on Tuesday. The index is down 1.5% in May.

"FX markets continue to mark time in anticipation of core PCE data later this week," said Christopher Wong, currency strategist at OCBC. "We should continue to see 104-105 holding up until the next catalyst comes along."

The Australian dollar was little changed at $0.66485 after Australian consumer price inflation unexpectedly rose to a five-month high in April, adding to risks the next move in interest rates might be upward.

"Australia's faster-than-expected April inflation again raises concerns about the final stretch of global inflation path after several months of disinflation," said Charu Chanana, head of currency strategy at Saxo in Singapore.

Meanwhile, the yen touched a four-week low of 157.41 per dollar early on Wednesday as the currency inches back to levels that led to bouts of suspected interventions from Tokyo at the end of April and early May. It was last at 157.255.

The yen hit a 34-year low of 160.245 per dollar on April 29, resulting in at least two suspected interventions that week, with Japanese authorities estimated to have spent more than 9 trillion yen ($57.21 billion) to prop up the frail currency.

"Perhaps Japanese officials sound out verbal warnings again but without tangible action it's likely dollar/yen marches towards the levels seen in late April," Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities.

The yen was also broadly weaker against other currencies. The pound rose 0.13% to 200.68 yen, the strongest since August 2008, earlier in the session while the euro touched a one-month high of 170.795 yen.

The Bank of Japan may raise interest rates if sharp falls in the yen boost inflation or the public's perception of future prices move more than expected, board member Seiji Adachi said on Wednesday.

The yen, which is sensitive to Treasury yields, is down 10% for the year against the dollar but may yet scrape a monthly gain in May.

In Asian hours, the benchmark U.S. 10-year yield rose to 4.568%, the highest since May 3. [US/]

($1 = 157.3100 yen)