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Inflation climbs to 1.5 per cent as economists look for prices to keep rising

OTTAWA - A big jump in energy costs and cigarette prices helped push up Canada's inflation rate to 1.5 per cent last month, matching the highest level in the annualized consumer price index in almost two years. The increase, while significant, was mostly in line with expectations of analysts, who had calculated that the observed strengthening of oil and natural gas prices last month would play a dominant role in the report Thursday.

Portugal says it will return to mainstream bond market

Portugal on Thursday said it plans to make its first pre-announced government bond auction since April 2011, ahead of exiting its bailout programme next month. The national debt management agency IGCP said it would make a regular, long-term bond issue on Wednesday aiming to raise 500-750 million euros ($690-1.0 billion) with a 10-year term. The issue is Lisbon's latest step towards returning to full market financing after it was forced to seek a rescue package from the EU and IMF three years ago.

Strong European currencies eat into company profits

By Tom Bergin and Martinne Geller LONDON (Reuters) - As European policymakers consider action to stop a strong euro holding back jobs growth, companies across the continent say the currency's strength is already eating into their profits. Some of Europe's largest companies including Danone <DANO.PA>, SAP AG <SAPG.DE> and L'Oreal <OREP.PA> have posted buoyant first-quarter sales volumes in the past week thanks largely to strong demand in emerging markets such as Brazil and in North America.

Philly Fed factory activity accelerates in April

NEW YORK (Reuters) - Factory activity in the U.S. mid-Atlantic region expanded in April at a faster clip than expected, a survey showed on Thursday. The Philadelphia Federal Reserve Bank said its business activity index rose to 16.6 from 9.0 in March, topping economists' expectations for 10.0, according to a Reuters poll. Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

ECB hardliner Weidmann comes in from the cold as deflation threatens

By Paul Carrel FRANKFURT (Reuters) - As recently as last November, Jens Weidmann steadfastly opposed any move by the European Central Bank to print money to buy assets and buoy the euro zone economy. No longer. The Bundesbank chief, known for his hardline stances at the ECB and as head of the German central bank, is now ready to support such quantitative easing (QE) if he and his ECB colleagues deem it necessary.

Japan government cuts economy view after sales tax; no need for fresh stimulus

By Tetsushi Kajimoto TOKYO (Reuters) - Japan's government slightly cut its overall view on the economy, its first downgrade in a year and a half, but officials shrugged off the need for more stimulus to support the economy. The government said the economy was on track for a moderate recovery, in keeping with its main overview at its March assessment, but noted there was some weakness in demand after a sales tax increase went into effect on April 1.

A star abroad, India central bank boss riles bond traders at home

By Neha Dasgupta MUMBAI (Reuters) - Since taking the helm of India's central bank, Raghuram Rajan's agenda to reform markets has put the noses of Mumbai bond traders firmly out of joint by upending practices that provided them with a relatively secure rate of return.

Painful 2013 leaves European banks' returns well below target

By Laura Noonan LONDON (Reuters) - Europe's largest banks are generating a poor return on their capital, well below their post-crisis targets, as muted credit growth slows their recovery and progress on costs is swallowed by unexpectedly high loan losses.

BOJ upholds upbeat regional economic views, but wary of tax hike impact

The Bank of Japan kept intact Thursday its upbeat assessment of the country's nine regional economies, noting their economies are on a "recovery" path on the back of improvement in employment and income circumstances. But all nine regions said their economies have started to be affected by the April 1 consumption tax hike -- the first in 17 years -- the central bank said in its quarterly "Sakura Report" on regional economies released after a meeting of the BOJ's branch managers.

Weak U.S. prices, not inflation, the threat now: Fed's Yellen

By Jonathan Spicer NEW YORK (Reuters) - Persistently low inflation poses a more immediate threat to the U.S. economy than rising prices, Federal Reserve Chair Janet Yellen said on Wednesday, stressing that the U.S. central bank would be delivering policy stimulus for some time to come.
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