(The opinions expressed here are those of the author, a

columnist for Reuters)

By Mike Dolan

May 13 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

Oil prices remain elevated, inflation is climbing and bond

markets are feeling the heat as the Iran war stalemate

continues. Higher-than-forecast U.S. consumer price inflation of

3.8% in April underlined the simmering problem on Tuesday, with

headline inflation now expected to top 4% this month - double

the Fed's target.

Even the "trimmed mean" cut of inflation, favored by

incoming Fed Chair Kevin Warsh, showed its biggest monthly rise

in more than two years.

I'll get into that and more below.

But first, check out my latest column on the many factors

placing bellwether government borrowing markets under strain.

And listen to the latest episode of the Morning Bid daily

podcast. Subscribe to hear Reuters journalists discuss the

biggest news in markets and finance seven days a week.

FED ALERT

The hot inflation prints have pushed Fed futures markets to

wipe away any chance of a rate cut this year, and there's now an

80% chance that the next move will be a hike as soon as next

April.

That catapulted 30-year U.S. Treasury yields back above 5% in

what was another ugly day for long-dated government bonds - not

least in Britain, where political uncertainty around Prime

Minister Keir Starmer's future continues.

Meantime, President Donald Trump arrives in Beijing today for a

summit with his Chinese counterpart Xi Jinping. Trade,

geopolitics and AI look set to dominate, with top U.S. tech

bosses including Elon Musk and Nvidia's Jensen Huang among the

president's entourage.

Trump's agenda is likely to be wide-ranging but a renewal of

Chinese commitments to free up critical rare earth supplies will

be one big issue. The Iran war is also likely to feature -

though Trump said on Tuesday he does not think he will need

China's help to end the conflict.

Elsewhere, Asian shares rebounded on Wednesday after a weak

start, with South Korea's volatile, chipmaker-heavy KOSPI

bouncing back from an early selloff to close up over 2%.

European shares also rose in early trading, while Wall Street

futures pointed higher before the bell.

Oil prices eased modestly on Wednesday, but both Brent and WTI

crude remained above $100 per barrel and well above last week's

lows.

Earnings are back on the agenda stateside later today, with

Cisco topping the bill. Additionally, April producer price data

will provide another key read on inflation pressures. And a

closely watched 30-year Treasury auction will test investor

appetite after the latest bond market selloff.

Chart of the day

U.S. consumer inflation jumped again in April, with the

annual rate posting its largest gain in three years. Incoming

Fed Chair Kevin Warsh says he favors looking at "trimmed mean"

inflation cuts that strip out the more extreme price moves each

month. But the Cleveland Fed's "trimmed mean" CPI for April also

showed its biggest monthly gain since January 2024, with the

annual rate rising to 2.8%.

Today's events to watch

* U.S. April PPI (8:30 a.m. EDT)

* U.S. 30-year bond auction (1 p.m. EDT)

* President Trump arrives in Beijing

* Boston Fed's Susan Collins and Minneapolis Fed's Neel

Kashkari speak

* U.S. corporate earnings: Cisco

Want to receive the Morning Bid in your inbox every weekday

morning? Sign up for the newsletter here. You can find ROI on

the Reuters website, and you can follow us on LinkedIn and X.

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.