Macroeconomic/ geopolitical developments
● US equities continued their rally last week, with the S&P 500 rising 1.8%, the Nasdaq gaining 2.6% and the Dow Jones Industrial Average adding 1.5%, as lower bond yields, easing oil prices and ongoing AI optimism helped drive major indices to fresh record highs. Technology stocks led the advance, while hopes of progress in US-Iran negotiations supported sentiment and contributed to a sharp decline in oil prices.
● Hopes of a US and Iran agreement extending the current ceasefire (for 60 days) and supporting the reopening of the Strait of Hormuz boosted risk appetite last week, helping drive oil prices lower and supporting both equity and bond markets. While negotiations remain unresolved and geopolitical risks persist, improving diplomatic prospects have provided investors with a more constructive backdrop and eased concerns over global energy supplies.
● US PCE inflation rose 0.4% in April and accelerated to 3.8% year-on-year, while core PCE increased 0.2% over the month and 3.3% annually, reinforcing concerns that inflation remains well above the Federal Reserve’s target. In response, several Fed officials maintained a hawkish stance, signaling that interest rates may need to stay higher for longer and leaving the door open to further policy tightening if price pressures persist.
● Investor attention will centre on Friday’s US Nonfarm Payrolls report and a series of labor market indicators that could shape expectations for Federal Reserve policy, with markets looking for signs that employment remains resilient despite slowing growth and elevated inflation. Meanwhile, developments surrounding a potential US Iran peace agreement will remain closely watched, alongside earnings from key technology companies that may offer further insight into AI related spending trends.
Global financial market developments
● US and global equity averages were higher, with US indices at record levels.
● US and European bond yields were lower on the week
● The US Dollar Index was slightly lower on the week. .
● Gold futures were little changed, dipping and bouncing through the week.
● Oil futures prices plunged lower from a multi-month peak.
Key this week
Central Bank Watch: With no major interest rate decisions scheduled this week, attention will shift to commentary from policymakers at the Federal Reserve, European Central Bank, Bank of England and Bank of Japan.
Macro Data Watch: Economic data will take center stage this week, with Global PMI surveys on Monday and Wednesday and the closely watched US Employment report on Friday. Other key releases include Eurozone HICP data on Tuesday, Eurozone Retail Sales on Thursday and Canadian Employment figures on Friday.
Date Major Macro Data
06/01/2026 Global Manufacturing PMI; German Retail Sales; EU Unemployment Rate
06/02/2026 EU HICP; US JOLTS Job Openings
06/03/2026 Global Service and Composite PMI; EU PPI; BoE Monetary Policy Report Hearings; US ADP Employment Change, Factory Orders and Fed’s Beige Book
06/04/2026 EU Retail Sales; US Challenger Job Cuts, Initial Jobless Claims, Nonfarm Productivity and Unit Labor Costs
06/05/2026 Japanese Labor Cash Earnings; EU Employment Change and GDP; Canadian and US Employment reports
