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Argentina said on Tuesday it would meet with a mediator for the second time this week in the country's dispute with "holdout" investors, lifting market hopes for a deal needed to avoid another painful debt default. With the economy already in recession, President Cristina Fernandez's cash-strapped government has until July 30 to reach an agreement with hedge funds who refused to participate in the country's earlier debt restructuring and have been suing for full repayment of sovereign bonds which Argentina defaulted on in 2002. On Argentina's local over-the-counter market, benchmark Discount bonds ARDISCD=RASL rose 1.60 percent to 88.65 while Par bonds ARPARD=RASL were up 1.32 percent to 49.90. Traders cited optimism over the talks as the reason for the climb. Argentina's cabinet chief Jorge Capitanich did not say whether the holdout funds led by Elliott Management Corp and Aurelius Capital Management would participate in Friday's meeting. There

Mexico's annual inflation rate is seen climbing in June, but policymakers expect the rise to be temporary as the pace of consumer price gains is contained by a sluggish economy. _0"> Inflation in the 12 months through June MXCPIA=ECI is likely to have come in at 3.78 percent, up from a 3.51 percent annual rate in May, according to a Reuters poll of 20 analysts. The Mexican central bank unexpectedly slashed its main interest rate by 50 basis points in early June to a record low of 3.00 percent, saying slack in the economy gave it room to lower borrowing costs without fanning inflation. Policymakers have said they expect temporary factors to drive the annual rate above the central bank's 4 percent limit in the second half of the year, but that the rate should fall back toward 3 percent by early next year. The Reuters poll showed analysts expect consumer prices to have risen 0.20 percent MXINFL=ECI in June, mostly on an uptick in gasoline prices. Core inflation, whi

A measure of Australian consumer sentiment improved modestly in July as worries about family finances eased, a survey showed on Wednesday, though the depressing impact of an unpopular federal budget continued to linger. _0"> The survey of 1,200 people by the Melbourne Institute and Westpac Bank ( id="symbol_WBC.AX_0"> WBC.AX ) showed the index of consumer sentiment rose a seasonally adjusted 1.9 percent in July, from June when it had inched up only 0.2 percent. The index still has not fully recovered from May's 6.8 percent dive which followed a budget of welfare reforms, cutbacks and increased charges for services. The index reading of 94.9 for July was down 7.1 percent on the same month last year and means pessimists still exceed optimists. The survey's measure of sentiment among supporters of the Labor opposition is down 25 percent on a year ago at 83.9. In contrast, the index for supporters of the Liberal National government has risen by 25 percent

U.S. Treasury Secretary Jack Lew said on Wednesday that moving to a market-determined exchange rate will be a crucial step for China, as the two countries began annual high-level talks. _0"> "We support China's efforts to allow the market to play a more decisive role in the economy and rely more on household consumption to drive China's economic growth. Moving to a market-determined exchange rate will be a crucial step," he said. "We welcome this commitment and China's economic growth. A prosperous China that grows in a way that is consistent with international rules and norms will contribute to the strong, sustainable and balanced growth of the global economy." (Reporting by Lesley Wroughton ; Writing by Ben Blanchard ; Editing by Dean Yates )

China's consumer inflation cooled slightly more than expected in June, pointing to lingering weakness in the economy which could prompt Beijing to launch further stimulus measures to shore up growth. The consumer price index (CPI) rose 2.3 percent in June from a year earlier, missing the market forecast of 2.4 percent in a Reuters poll and down from 2.5 percent in May, the National Bureau of Statistics said on Wednesday. The producer price index (PPI) dropped 1.1 percent in its 28th straight month of decline, versus a market consensus for a fall of 1 percent, signalling that demand in the domestic economy remained lukewarm, despite some recent signs of stabilisation. "The weak inflation data leaves more scope for Beijing to step up use of targeted measures and even opens the opportunity window for blanket easing policy, such as an interest rate cut, to support economic growth," said Wang Jin, an analyst at Guotai Junan Securities in Shanghai. Most economists believe

The Bank of Japan may slightly cut its economic forecast for the current fiscal year at a quarterly review of its estimates next week, sources familiar with its thinking said, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April. _0"> But the central bank will roughly maintain its upbeat price projections and stick to its view that the world's third-largest economy will continue a moderate recovery as the pain from the tax hike heals, the sources said on condition of anonymity. With no major change in the broad economic outlook, the BOJ is set to keep monetary settings unchanged at its two-day rate review ending on Tuesday. In its latest projections made in January, the BOJ expects the economy to expand 1.1 percent in the current business year that began in April, higher than a 0.9 percent rise forecast by analysts in a Reuters poll last month. The central bank may revise down the forecast slightly after data r

Ukraine expects to receive a second tranche of $1.5 billion from an International Monetary Fund's $17 billion aid package, Prime Minister Arseny Yatseniuk said on Wednesday. _0"> Yatseniuk said he was expecting to meet later on Wednesday a visiting IMF mission that has been examining Ukraine's economic performance since June 24. "We believe Ukraine has fulfilled the criteria which are written into our IMF program and we should complete discussions and successfully receive the second tranche," Yatseniuk told a government meeting. The ex-Soviet republic received a first tranche of slightly more than $3 billion in May. (Reporting by Natalia Zinets; Writing By Richard Balmforth ; Editing by Thomas Grove )