May 29 (Reuters) - The heads of the International Energy Agency, International Monetary Fund, ​World Bank and World Trade Organization warned ‌on Friday that the war in the Middle East was straining global energy supplies and hitting vulnerable economies hardest.The U.S.-Israel ​war on Iran has disrupted trade, rattled ​financial markets and raised concerns over global energy ⁠supplies, particularly through the Strait of Hormuz, a ​key route for oil and gas shipments.

May 29 (Reuters) - Federal Reserve officials continued on Friday ​to signal the U.S. central bank may need to raise interest rates in the future if the war in the Middle East leads to a persistent increase in already-high inflation.The potential shift ‌in the monetary policy outlook has even been embraced by Fed Vice Chair for Supervision Michelle Bowman, one of the central bank's most dovish policymakers. Bowman told a conference in Iceland on Friday that the war and its resulting energy shock could change her view on the outlook for rates.

May 29 (Reuters) - Federal Reserve officials continued on Friday to signal the U.S. central bank may need ​to raise interest rates in the future if the war in the Middle East leads to a persistent increase in already-high inflation.The potential shift in the ‌monetary policy outlook has even been embraced by Fed Vice Chair for Supervision Michelle Bowman, one of the central bank's most dovish policymakers. Bowman told a conference in Iceland on Friday that the war and its resulting energy shock could change her view on the outlook for rates.

TORONTO, May 29 (Reuters) - The Canadian ​dollar edged lower against its U.S. counterpart on Friday as domestic data ‌that showed the economy slipping into a surprise technical recession offset the prospect of an imminent deal to extend the ceasefire in the Middle East.The loonie was trading 0.1% lower at 1.3790 per ​U.S. dollar, or 72.52 U.S. cents, after moving in a range of 1.3771 ​to 1.3829.On Thursday, the currency hit a six-week intraday low of ⁠1.3869. For the week, it was up 0.2%.

WASHINGTON/CAIRO, May 29 (Reuters) - U.S. President Donald Trump said he would make a final decision on Friday over a deal with Iran to extend their ‌ceasefire that would need to include opening the Strait of Hormuz and dismantling Tehran's capacity to make a nuclear weapon.

WASHINGTON, May 28 (Reuters) - U.S. ‌Treasury Secretary Scott Bessent said he had breakfast with new ​Federal Reserve ​chair Kevin Warsh on Thursday.Asked ⁠by a reporter ​at a White ​House briefing if he pressed Warsh to lower interest ​rates, Bessent instead ​responded about his frequent meetings ‌with ⁠the previous Fed chair, Jay Powell."I had breakfast with Chair ​Powell ​41 ⁠times, and I never did ​that," Bessent said, ​without ⁠elaborating.President Donald Trump repeatedly urged Powell to ⁠lower ​interest rates.

CHICAGO, May 28 (Reuters) - The U.S. Federal Trade Commission said on Thursday it has been investigating fertilizer prices, which spiked after the start of ​the U.S.-Israeli war on Iran.Soaring prices for fertilizer and fuel due to the conflict have pinched ‌farmers as they have planted corn and other crops, and grappled with a resurgent drought in the U.S. Plains. Some growers are facing a fourth straight year of shrinking margins.

WASHINGTON, May 29 (Reuters) - The U.S. trade deficit in goods contracted more than expected in April as a surge in exports blunted rising imports, but economists cautioned the trend was ​unlikely to be sustainable, with businesses ramping up investment in artificial intelligence.

May 29 (Reuters) - Unrealised losses at U.S. private credit lenders deepened in the first quarter to their worst level since 2022, while the amount of interest income they received in ​kind, rather than cash, stayed high, filings and data reviewed by Reuters showed.Private ‌credit has faced growing scrutiny as higher borrowing costs strain some middle-market companies and investors focus more closely on valuations, non-accruals and redemption requests at non-traded vehicles.

OTTAWA, May 29 (Reuters) - Canada's economy posted a surprise contraction in the first quarter versus the year before, making it two straight ‌quarters of annualized decline - which some economists call a technical recession - as the country struggles with U.S. tariff uncertainty.Gross domestic product declined at an annualized rate of 0.1% in the first quarter, Statistics Canada said on Friday, compared with a downwardly revised contraction of 1% in the fourth quarter of last year.

May 29 (Reuters) - Federal Reserve Vice Chair for Supervision Michelle Bowman ‌said on Friday the Middle East war's impact on the economy, while still being measured, could lead to persistent rises in inflation that might require tighter monetary policy."It still seems early to assess the size and persistence of the economic effects ​from the Iran conflict," Bowman said in the text of a speech to be delivered at ​a conference in Iceland.

LONDON/HONG KONG, May 29 (Reuters) - The dollar steadied against other major ​currencies on Friday, but was on track to end the week lower after sources said that the U.S. ‌and Iran had reached an agreement to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz.The deal, still pending U.S. President Trump's approval, would extend the truce for another 60 days and allow traffic to flow through the strategic waterway while negotiators tackle difficult issues such as Iran's nuclear programme, ​four sources told Reuters.

LONDON, May 29 (Reuters) - The Iran war rocked global bond markets again in May, sending yields to multi-decade highs as traders priced in central bank rate hikes - only for signs of ​progress in peace talks and weak economic data to bring them sharply lower again.Although a clear end to the conflict would bring immediate relief and ‌lower government borrowing costs around the world, May's moves underscore how investors are twitchy about inflation and growing public debts.TREASURY TANTRUM

OTTAWA, May 29 (Reuters) - Canada's economy contracted in the first quarter of ‌the year on an annualized basis, data showed on Friday, making it two consecutive quarters of annualized decline which some would call a technical recession.However, on a quarterly basis, the first quarter GDP was unchanged against a decline in ​the fourth quarter of last year, closely escaping the definition of a technical recession on a ​quarter-on-quarter basis.

May 29 (Reuters) - Futures tracking Canada's blue-chip stocks rose on Friday as a deal to extend the U.S.-Iran ceasefire renewed hopes ​for an end to the Middle East conflict, ‌while investors also awaited domestic GDP data due to be released later in the day.June futures on the S&P/TSX 60 index were up 0.22% ​at 6:37 a.m. ET (1037 GMT).The United States and Iran ​on Thursday agreed to extend their ceasefire and lift ⁠restrictions on shipping through the Strait of Hormuz, ​sources told Reuters, though the deal still needs U.S. ​President Donald Trump's signoff.

NEW YORK, May 29 (Reuters) - Investors will turn to an important labor market update next week as they weigh whether simmering inflation and the potential for interest rate hikes could ​derail the rally in U.S. stocks.Broadcom's (AVGO.O),results also pose a test in the coming week for the red-hot AI trade. This week, U.S. equity indexes ‌continued their charge higher, with the benchmark S&P 500 (.SPX),up more than 10% on the year.

May 29 (Reuters) - Gold gained on Friday on hopes of a potential ‌U.S.-Iran ceasefire, but prices were on track for a third straight monthly decline as concerns about energy-driven inflation bolstered expectations of higher interest rates.Spot gold was up 0.9% at $4,532.03 per ounce, as of 1151 ​GMT. Bullion fell to a two-month low of $4,365.76 on Thursday, but closed higher. ​The metal has fallen around 2% so far this month.U.S. gold futures ⁠for August delivery rose 0.7% to $4,562.60.

May 29 (Reuters) - Gold demand in India remained subdued this week, ‌as buyers held back due to a sharp rise in prices and import duties, while premiums in top consumer China narrowed on cautious market sentiment.

FRANKFURT, May 29 (Reuters) - Inflation in the euro zone's four largest economies hovered above the European Central Bank's 2% target for a third ​straight month in May, preliminary data showed on Friday, as a rise in fuel ‌costs triggered by the Iran war began to feed through to other prices.Readings from France, Italy, Spain and some of Germany's largest and most economically important states are likely to cement the case for a rate hike from the European Central Bank next month and ​stoke worries about whether high inflation is beginning to take root in the euro zone.

NEW YORK, May 29 (Reuters) - Federal Reserve Bank of Kansas City President Jeffrey Schmid said on ​Friday that already-hot levels of inflation make it harder to assume the current energy shock will have only ‌a temporary impact on pricing and can be ignored by the central bank.“My primary concern is inflation, which is too hot and has been above target for too long,” Schmid said in a speech delivered before a conference in Iceland.