Rolling coverage of the latest economic and financial news
Brent crude, the international benchmark for oil, is heading towards one of its biggest monthly drops ever as it nears a fall of 17% since the start of May.
The market is hopeful that a US-Iran deal, which would extend the ceasefire by 60 days and reopen the strait of Hormuz, will materialise.
Whilst the geopolitical headlines provided the main boost to markets yesterday, they got further support after the latest US PCE inflation print was softer than expected, easing concern around the need for rate hikes. The release showed that headline PCE was only up +0.4% in April (vs. +0.5% expected), whilst core PCE was up +0.2% (vs. +0.3% expected). So that led investors to dial back expectations for a Fed rate hike, with the probability of a hike by December down to 59% by the close, having been at 62% the previous day.
Fed officials also didn’t sound in a rush to hike either, with NY Fed President Williams saying that monetary policy “is right where we want it to be”. Admittedly, there was discussion of a hike, with St Louis Fed President Musalem acknowledging there “there is a scenario where the economy might require a rate increase”, but that was still conditional.
7.45am BST: French inflation report
8.am BST: Spanish inflation report
9.20am BST: Andrew Bailey speech at the Reykjavik 2026 economic conference
1pm BST: Germany inflation report
1.30pm BST: Canadian Q1 2026 GDP
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