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Russia needs to adopt both a tougher budget and tighter monetary policy to guard against the risk of overheating and to bear down on inflation, the International Monetary Fund said in a statement on Thursday.

The statement follows a meeting of the IMF’s Executive Board to discuss the results of annual consultations between the Fund and the Russian government.

IMF directors “recommended an ambitious fiscal consolidation path to reduce overheating pressures and vulnerabilities and ensure intergenerational equity,” it said.

They also “generally recommended a gradual further tightening of monetary policy to contain underlying pressures and anchor expectations.”

The IMF has warned repeatedly in recent months that it fears Russia’s economy is in danger of overheating – implying that demand is growing faster than potential output, leading to higher inflation.

via Reuters

Thailand’s growth was slower than economists estimated in the first quarter as exports cooled, boosting the case for the central bank to cut interest rates.
Gross domestic product increased 5.3 percent in the three months through March from a year earlier, after expanding a revised 19.1 percent in the previous quarter, the National Economic and Social Development Board said in Bangkok today. The median of 13 estimates in a Bloomberg News survey was 6 percent.
Finance Minister Kittiratt Na-Ranong, who has led [...]

The currency that the new governor of the Bank of England is leaving behind, managed to quietly slip to a 10-week low on Friday. It was not even in sympathy to its sister currency’s plight ‘down-under.’ Friday’s reasons had more to do with its domestic CPI print proving that inflation can still surprise on the downside. This seems to be the new global reality – domestic inflations are benign.
However, it’s not governor Carney’s concern anymore. When monsieur Poloz takes [...]

Turkey this week caught the markets attention on two occasions, the first, after Moody’s upgraded Turkey’s sovereign bond ratings to investment grade (Baa3), in line with Fitch at BBB- and above S&P at BB+. The second time occurred after Turkey’s Central Bank extended its monetary easing cycle.
The rating upgrade has been a part of “consensus expectations for an extended period and was one of the main drivers of real money demand for Turkish bonds in the past 12-months.” Investors [...]

AUD and JPY bore the brunt of the markets negativity again this week and are forcing the interested parties to reconsider their recent forecasts. The might of Abenomic has been well covered in detail and remains a work in progress for the Bank of Japan. The Aussie thus far reasons are being thrashed out. The currency from ‘down-under’ is finding fault with its own country’s deteriorating economic fundamentals, falling commodity prices and slower Chinese economic activity. In theory the likelihood [...]

The US dollar has edged higher on Friday against its Canadian counterpart, as the pair briefly dipped above the 1.03 level early in the North American session. The pair has not traded at these high levels since early March. USD/CAD moved higher following the release of weaker than expected inflation numbers out of Canada. US numbers have not impressed this week, and the trading week wraps up with the US UoM Consumer Sentiment later today.
Canada released inflation data earlier on [...]

Gold bears are dominant again after prices resumed their slump and billionaire George Soros joined investors selling holdings in exchange-traded products that have retreated to a two-year low.
Seventeen analysts surveyed by Bloomberg expect prices to fall next week, with eight bullish and three neutral, the highest proportion of bears in two weeks. The analysts were divided a week ago after gold rebounded as much as 13 percent from the two-year low of $1,321.95 an ounce on April 16. ETP holdings [...]

The Australian dollar continues to slide against the US currency, as the pair broke through the 0.98 line in Friday’s Asian session. The pair has fallen to the mid-97 range and shows no signs of finding its footing. The Aussie has had a miserable May, shedding a remarkable six cents since the start of the month. On Thursday, US releases were unimpressive, but the US dollar got a boost as a regional Federal Reserve Chairman said that the Fed could [...]

The drumbeat to reduce the rate of bond purchases by the Federal Reserve grew louder Thursday, with a dovish voice joining the group.
John Williams, the San Francisco Fed president, indicated the $85 billion per month of bond purchases can be reduced soon, and that the whole program may be halted this year.
He pointed out the pace of job growth has picked up since the program was launched in September, with an average pace of job growth of 200,000 over the [...]

West Texas Intermediate crude fell for the fifth time in six days amid signs of economic weakness in the U.S. and Europe that threaten fuel demand.
Futures slid as much as 0.4 percent in New York. U.S. industrial production dropped the most in eight months in April, manufacturing in the New York region unexpectedly shrank in May and the euro-area economy contracted more than forecast in the first quarter. A measure of U.S. fuel consumption declined by 584,000 barrels last week [...]

Japanese shares have climbed past the 15,000 mark for the first time since January 2008, as the yen continues to weaken – boosting the earnings potential for exporters.
On Wednesday, the benchmark Nikkei index rose 2.3% to 15,096, with carmaker Toyota and electronics giant Sony leading the gains.
The Nikkei is up 46% since the start of 2013.
Japan’s central bank has embarked on an aggressive plan to weaken the yen.
A weaker Japanese currency translates into higher earnings for companies when the funds [...]