原油反発にもかかわらず先物上昇、NvidiaがAI高揚感を維持

Futures Rise Despite Oil Bounce, As Nvidia Keeps AI Euphoria Going

Futures are positive and at session highs even as the a lack of a US / Iran deal pushes oil prices, bond yields, and volatility higher. As of 8:00am ET, S&P futures are up 0.3% to a new all time high of 7620; Nasdaq futures rise 0.2%: the Computex AI Conference kicked off; biggest news is NVDA to enter PC space with a new chip challenging AMD / INTC, helping send its stock up 2.3%. Microsoft shares gain 3.1% after Jensen Huang dismissed concerns over disruption from artificial intelligence. Geopolitics was in focus: in addition to a lack of a deal, there were renewed "kinetic skirmishes" that made headlines. Aside from Tech, Energy is the only sector seeing a uniform bid with elements of both Cyclicals and Defensives weaker highlighting concentration risk. WTI is above $91 as the Energy complex is rallying with Ags catching a bid and Metals mixed as Copper / Silver lead. USD is higher after 2 weeks of losses with bond yields 2 - 3bps. In equities, tech is leading with strength in Mag7 and Semis. Today’s macro data focus is on ISM-Mfg with ISM-Srvcs on Weds and NFP on Friday.

In premarket trading, Nvidia (NVDA) is up 2.3% after the leader in AI chips said it was entering the PC market with a new chip. The news is supporting chip-design company Arm, whose ADRs (ARM) are up 13%, while weighing on chipmakers in the CPU space, with Intel (INTC) down 6%, Qualcomm (QCOM) sinking 9.7%, and AMD (AMD) down 4.3%. Other Mag 7 names are mixed (Meta Platforms +0.3%, Amazon -0.5%, Apple -0.7%, Alphabet -0.8%, Tesla -1.5%). 

Software stocks rally, with Microsoft (MSFT) up 4.1%, after Nvidia CEO Jensen Huang rebuffed concerns that the industry is at risk of being disrupted by more advanced AI tools.
IBM jumps 14% after a video of President Donald Trump praising the company’s CEO and discussing the stock at a December event recirculated on social media over the weekend.
Oculis sinks 32% after the biopharmaceutical firm said studies of its OCS-01 eye drops in patients with diabetic macular edema missed primary endpoint.
Redwire is down 7.1% after Jefferies downgraded the defense company to hold from buy.
Strategy is down 2.7% as Mizuho Securities cut its the price target on the Bitcoin treasury company to $265 from $320 on lower crypto prices.
Taylor Morrison Home Corporation is up 23% after Berkshire Hathaway agreed to acquire the company for a total enterprise value of approximately $8.5b.
In other corporate news, Revolution Medicines’s experimental pancreatic cancer drug daraxonrasib delayed painful symptoms for months, in addition to nearly doubling survival. 

Traders are waiting for signs that a deal that would reopen the Strait of Hormuz remains on track after Israel stepped up its offensive against Iran-backed Hezbollah in Lebanon over the weekend. Tehran struck a Kuwaiti air base, while the US conducted “self-defense strikes” on Iranian radar and command-and-control sites. Lack of resolution pushed Brent 2.8% higher to nearly $94 a barrel, snapping a three-day run of losses. 

The two sides also exchanged messages seeking amendments to a draft agreement. President Donald Trump urged calm, saying the situation will work out well. Iran said Israel’s attacks on Lebanon were preventing a deal.

“Markets need an agreement to open the Strait of Hormuz, to provide the next leg higher in equities and lower in rates,” Jefferies strategist Mohit Kumar told clients. “We still believe that we should get a leg higher when a deal is finally agreed upon.”

Overnight, Nvidia kept the AI trade alive as a stream of headlines emerge from Taiwan’s Computex event. Nvidia has entered the PC market with a new chip, RTX Spark Superchip, aimed at loosening the stranglehold of Intel technology in that arena. Nvidia also said Anthropic, OpenAI and SpaceX are among the first big users of its upcoming microprocessor Vera.  The news is supporting chip-design company Arm, whose ADRs (ARM) are up 13%, while weighing on chipmakers in the CPU space, with Intel (INTC) down 6%, Qualcomm (QCOM) sinking 9.7%, and AMD (AMD) down 4.3%. Other Mag 7 names are mixed (Meta Platforms +0.3%, Amazon -0.5%, Apple -0.7%, Alphabet -0.8%, Tesla -1.5%). 

“The rally in tech stocks is coherent when one looks at the earnings and profits of both the supplier of AI infrastructure and the hyperscalers,” said Mabrouk Chetouane, head of global market strategy at Natixis Global Asset Management. “There are those who claim there’s a bubble, but I simply see rising profits and a super cycle.”

Meanwhile, the benchmark SOX Index is set for its best quarter ever, soaring 69% in the past two months.  Hedge funds have been leaning into market momentum — the cohort was a net buyer of US stocks for a second consecutive week, with purchases reaching their fastest pace in six months, according to Goldman Sachs’ Prime desk.

It is a quiet week on the earnings front, and traders’ focus will shift to a busy macro slate. Today’s manufacturing PMI from S&P Global and ISM might reflect a rush to stockpile goods ahead of potential price increases sparked by the Iran war, while April figures for construction spending could offer a read on the pace of AI data center buildout. Jobs week is coming up, with a slate of indicators on the labor market culminating on Friday with the government’s official report on employment for May, for which Bloomberg survey estimates payrolls to rise by 89,000.

“We believe net hiring troughed early last fall and has been improving gradually ever since. May’s job report should provide more evidence that hiring has picked up, while the unemployment rate is steady. Job openings also likely accelerated, despite persistent fears that AI is reducing demand for workers.”

“The US macro backdrop of a stabilizing labor market, sticky underlying inflation, and resilient economic activity back a more restrictive Fed,” wrote Elias Haddad at Brown Brothers Harriman & Co. Money markets continue to price around a 70% chance of a Federal Reserve interest rate hike by December.

Discretionary goods, transportation and financial stocks are cyclical pockets that stand to benefit from accelerating earnings momentum as well as the recent drop in oil prices, according to Morgan Stanley strategist Mike Wilson. Meanwhile, cross-asset strategists at Goldman Sachs flag global technology stocks as the focus of an unusually fast and narrow re-risking in financial markets.

Elsewhere, former Fed Chair Powell said the US central bank would lose credibility if any president were free to dismiss Fed officials over policy disagreements. At a security forum in Singapore, Defense Secretary Pete Hegseth sought to convince US allies that staying quiet on Taiwan is the best way to project American strength.

European stocks started June lower as investors favored AI-linked shares, leaving the region’s less tech-heavy benchmark at a disadvantage. Oil and gas stocks outperformed as commodity prices edged higher amid continued uncertainty over a peace deal between the US and Iran. Here are the biggest movers Monday:

EasyJet shares jumped as much as 13% to the highest in three months after Castlelake said late Friday that it is considering an offer for the UK budget carrier
Applied Nutrition gains as much as 15%, climbing to a record high, after the nutritional product company lifted its revenue expectations for the full year, and announced a strategic US addition, alongside a new North American flavor collaboration agreement with Mondelez
Vusion shares rose as much as 10%, to the highest since Feb. 18, as BNP Paribas hikes its recommendation to outperform from neutral on order intake
Polar Capital rose as much as 6.6% to its highest level since September 2021 after Deutsche Bank set a new Street-high price target for the UK asset manager
Momentum Group is the best-performing stock on the Johannesburg bourse, gaining as much as 4.9%, the most in almost three months, after the insurer projected normalized headline earnings per share to have increased by 20% over the nine-month period ending March 2026
Earlier, Asian stocks climbed, extending a record-beating rally for a second session, as enthusiasm for the artificial intelligence trade outweighed caution over mixed signals surrounding the US-Iran peace deal. The MSCI Asia Pacific Index rose as much as 1.4% before paring some of the advance but still headed for a fresh record, with South Korea and Taiwan’s tech-heavy markets leading gains in the region. Benchmarks in Japan, Hong Kong and mainland China also advanced, while Australia declined. Markets are shut in Singapore, Indonesia, Malaysia and Thailand for public holidays.

Investors are buying into AI-related names after positive developments that are expected to support the region’s technology industry. Expectations of closer collaboration with Nvidia ahead of CEO Jensen Huang’s visit to South Korea spurred a jump in several chip-makers and physical AI firms. Software stocks, a sector that has suffered from AI disruption fears, also got a boost after Workday unveiled a partnership to integrate AI agents into HR and finance operations.

“The stock market has largely ignored lack of clarity on truce extension and kept its focus on the AI rally,” said Fabien Yip, market analyst at IG International. “We expect sentiments to be mildly positive this week ahead of Broadcom’s earnings and the US job report later this week.”

In FX, the greenback is mixed versus peers. Most Group-of-10 currencies traded in tight ranges with markets in Singapore and New Zealand shut for a local holiday

In rates, treasury futures hold small losses in early US session amid more pronounced bear-flattening in bunds. Brent crude higher by 3.4% and back towards $95/bbl. Higher energy prices have boosted yields, with the US 10yr borrowing cost up 3bps to 4.47%. US front-end and belly yields are about 3bp cheaper on the day, leading losses and flattening 5s30s spread by around 1.5bp. German front-end yields are up about 6bp, flattening German 2s10s spread by 2bp. German front-end bonds are lagging US and UK counterparts with ECB’s Schnabel cautioning over the risk of unanchored inflation expectations. IG dollar issuance slate includes several offerings already. Dealers expect a weekly total of around $35 billion and a monthly haul in the $130 billion-$135 billion range, versus $109 billion in June 2025. No Treasury coupon supply expected this week, with 3-year new issue and 10- and 30-year reopenings due next week

In commodities, Oil prices are higher in absence of a peace agreement between US and Iran. WTI crude oil futures are up 3.6% near session highs as Washington and Tehran trade messages seeking changes to a draft agreement to extend a ceasefire and reopen the Strait of Hormuz. Spot gold and silver are diverging, with the latter shedding 0.9% and former gaining 0.7%.

US Economic data slate includes May final S&P Global US manufacturing PMI (9:45am), May ISM manufacturing and April construction spending (10am). Fed speaker slate is blank for Monday.

Market Snapshot

Top Overnight News

Donald Trump said talks with Iran over an interim peace deal will “work out well.” But oil bounced from a six-week low as clashes continued near the Strait of Hormuz. The US said it struck Iranian air defense facilities in response to the shooting down of an American drone. BBG
Nvidia will debut a new chip for laptop and desktop computers to challenge Intel and AMD, whose shares were down premarket. BBG
Anthropic cut its list of unauthorized secondary-market platforms to four from eight following pushback from investors. BBG
Jay Powell has said the US Federal Reserve is in the throes of a “stress test” that threatens the strength and stability of the world’s largest economy, claiming Donald Trump’s attempts to fire central bankers undermine the rule of law. FT
Tech giant SoftBank has become Japan’s biggest company by market value, as AI demand powers the country’s stocks to an all-time high and helps Masayoshi Son’s group overtake Toyota. The car manufacturer and industrial giant has been Japan’s biggest company by market capitalization for more than 20 years, and its ousting from the top slot reflects rising global investor interest in AI and semiconductor companies. FT
China’s factory activity slowed in May, with the official manufacturing PMI edging down to 50, as expected, from 50.3 in April. BBG
China issued sweeping new rules on Monday tightening control of overseas deals that involve Chinese investors, technology, data and national security, a month after Beijing ordered Meta to unwind its acquisition of AI startup Manus. RTRS
Chinese mainland investors turned net sellers of Hong Kong stocks for the first time in nearly three years in May. BBG
Eurozone inflation expectations weren’t as bad as feared, with 1-year unchanged at 4% while 3-year ticked down from 3% to 2.9% and 5-year held steady at 2.4%. ECB
US IPO activity has recently accelerated following four consecutive years of muted issuance. 24 US companies have come to market so far in Q2 2026, bringing the YTD total to 40. This represents more than double the number of IPOs at this point in 2025 and the largest total through May since the 95 IPOs launched in the first five months of 2021. Nonetheless, despite the recent pickup in activity, the number of deals so far this year has lagged the average total of 50 IPOs through May since 1995: Goldman
Iran War 

Iran Commentary

Iran may propose changes to the US peace draft memorandum of understanding, according to Tasnim. This follows a report that President Trump proposed further changes to the existing text, while a source stated that text exchanges continue and that Iran may submit its own edits.
Iranian Foreign Minister Araghchi told state media that talks and message exchanges with the US are ongoing, and that the talks cannot be judged until a clear result is reached.
Iranian Foreign Ministry Spokesperson said the negotiation team's visit to Qatar was positive.
Iranian Foreign Ministry spokesperson said that they have a legal obligation to prevent aggressors from using their territory and facilities to attack another country.
Iran’s Presidential Office denied reports that Iranian President Pezeshkian submitted his resignation to the Supreme Leader, and stated that the stories were spread by some foreign media.
Iranian Supreme Leader’s military adviser Mohsen Rezaei said Iran has no intention of yielding or compromising with the US and will not place itself in a weak position, while he also stated that US President Trump is betraying diplomacy for the third time by continuing a naval blockade on Iran and making excessive demands.
IRGC said following aggression of US Army on a communication tower on Sirik Island, located in the Homozgan province an hour ago, fighters of the IRGC Aerospace Force targeted airbase where aggression originated and predicted targets were destroyed.
Iran's top negotiator said "The naval blockade and escalation of war crimes in Lebanon by the genocidal Zionist regime are clear evidence of US noncompliance with the ceasefire".
Iranian Foreign Ministry Spokesperson said at this moment they do not believe that the US has good intentions towards Iran.
Iran's FM Baghaei said "No negotiations have taken place on the details of the nuclear issue at this stage". One point being discussed is the allocation of funds for reconstruction. We are considering options for responding to the escalation of Israeli attacks in Lebanon.
Iran's Baghaei said a ceasefire in Lebanon is an integral part of any agreement and end to the war; lack of trust and constant change in US and Israeli positions in Lebanon are causing a delay on the diplomatic process. The continuation of maritime piracy and attacks on Iranian shipping is an example of a violation of the ceasefire. The diplomatic apparatus is closely following developments and we will take every measure to defend Iran's sovereignty. The exchange of messages is still ongoing.
Iran's Deputy Foreign Minister Gharibabadi said Iran's goal is not to hold ships in the Strait, but to declare a procedure that is not contrary to international law; these arrangements are not temporary and Iran will not back down. Stopping ships behind the Strait of Hormuz incurs storage and delay costs, and war insurance has increased by up to 500%. Accompanying Iranian forces costs less than war insurance and eliminates the risk of stoppage, inspection, and seizure. Iran's goal is not to hold the ships, but to declare a procedure that is not contrary to international law; these arrangements are not temporary and Iran will not back down.
"Three consecutive explosions were heard in Bandar Abbas", Iran International reported.
US President Trump reportedly sent tougher terms to Iran regarding the peace framework, according to officials cited by The New York Times.
US Commentary

US President Trump posted "Iran really wants to make a deal, and it will be a good one for the U.S.A. and those that are with us". Full post "Iran really wants to make a deal, and it will be a good one for the U.S.A. and those that are with us. But don’t the Dumocrats, and various seemingly unpatriotic Republicans, understand that it is MUCH tougher for me to properly do my job and negotiate, when political hacks keep negatively “chirping,” at levels never seen before, over and over again, that I should move faster, or move slower, or go to war, or not go to war, or whatever. Just sit back and relax, it will all work out well in the end - It always does! President DJT".
US President Trump posted "Fake News CNN said today, routinely, that my Iran Nuclear Deal doesn’t talk about Nuclear, when actually it states, very clearly, that Iran will not have a Nuclear Weapon". Full post "ScraperFake News CNN said today, routinely, that my Iran Nuclear Deal doesn’t talk about Nuclear, when actually it states, very clearly, that Iran will not have a Nuclear Weapon. It then goes on, in very strong and lengthy detail, to discuss various other aspects of Nuclear. In fact, that’s what most of the agreement is about. CNN, and so many others in the Fake News Media, is a Low Ratings disaster. Even with new ownership, it is unlikely to ever get better!!! President DJT".
US Secretary of State Rubio spoke in the last 48 hours with Lebanon's President and Israel's PM to try and promote a new ceasefire initiative, according to a senior US official cited by Axios's Ravid. said:. US senior official said that the new initiative was proposed as part of the negotiations taking place between Israel and Lebanon, as another round of talks between diplomats from both sides is scheduled to take place this week in Washington. In order to advance the talks, US proposed that as a first step, Hezbollah stop all attacks on Israel, and in return, Israel will refrain from escalation in Beirut.
US Central Command confirmed military forces conducted strikes against Iranian radar at command and control sites located in Goruk and Qeshm Island over the weekend.
Kuwait Army said air defences are intercepting hostile missile and drone attacks.
Lebanon

Israeli PM Netanyahu said they will attack targets in the southern suburbs of Beirut, in response to Hezbollah violating the ceasefire agreement.
"Walla News, citing a source: Washington is open to Israel's request to expand its military operation in Lebanon", Al Araby reported.
Israeli jets hit Al-Qatrani, Al-Mawahani and Bin Jabal in Lebanon, according to IRIB.
Sirens sounded in Tiberias and surrounding areas after rockets were launched from Lebanon.
Lebanon is intensifying its efforts to solidify the ceasefire and is conducting international contacts, particularly with the Americans, in light of Israeli threats, Al-Araby reported citing sources. Talks with the US are still scheduled for tomorrow.
A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the new month predominantly in the green with the Nikkei 225 and KOSPI extending on fresh record highs amid tech-related strength and following a lack of any major geopolitical developments over the weekend, with a US-Iran peace agreement remaining elusive, while participants also got to digest mixed Chinese PMI data. ASX 200 traded rangebound with demand constrained as the strength in tech and miners is offset by underperformance in defensives, telecoms and real estate. Nikkei 225 rose to a fresh record high and briefly surpassed the 67,000 level for the first time amid tech strength, which saw SoftBank overtake Toyota as the largest Japanese company by market cap. KOSPI outperformed with index heavyweight Samsung Electronics rallying around 10% amid the tech momentum, while an industry report noted that the Co. surpassed Micron to become the world’s leading supplier of automotive memory chips last year. Hang Seng and Shanghai Comp were varied, with the mainland indecisive following mixed Chinese PMI data in which official Manufacturing PMI missed forecasts, but Non-Manufacturing PMI showed a surprise return to expansion territory, while RatingDog Manufacturing PMI topped forecasts. In addition, trade frictions linger as China vowed to resolutely retaliate if the EU proceeds with new restrictive trade measures, while the State Council announced that new rules tightening the oversight of outbound investments in selected technologies will take effect on July 1st.

Top Asian News

Japanese S&P Global Manufacturing PMI Final (May) 54.5 vs. Exp. 54.5 (Prev. 55.1).
Australian S&P Global Manufacturing PMI Final (May) 50.7 vs. Exp. 50.2 (Prev. 51.3).
European bourses are broadly lower this morning, as markets digest another flare-up between the US and Iran, with Israel also seemingly upping its presence in southern Lebanon once again. From an index perspective, the AEX (-0.4%) mildly underperforms whilst the DAX 40 (+0.2%) holds afloat. European sectors are mixed. Energy unsurprisingly tops the pile, given the gains in underlying oil prices; Tech and Basic Resources complete the top three. To the downside reside Media and then Healthcare; the former has been weighed by losses in UMG (-2%), after it rejected Pershing Square’s unsolicited offer.

Top European News

Hungarian PM Magyar said will amend constitution to oust Hungarian President.
Morningstar DBRS confirms Spain at A (high), Stable Trend.
S&P affirms Hungary at BBB-; Outlook negative.
Former UK Health Secretary and potential leadership contender Wes Streeting flagged the idea of lowering employers’ national insurance and favours new North Sea oil drilling.
S&P confirmed France’s sovereign rating at A+; Outlook Stable, according to French Finance Minister Lescure.
SoftBank pledged to spend at least USD 52bln on building a network of data centres in France as it seeks to deliver as much as 3.1 gigawatts of computing capacity in the country by 2031, according to WSJ.
FX

Mixed performance across G10s with most currencies lower against the Greenback (ex. GBP/NOK given oil/yield moves.)
GBP is the mild outperformer after reporting over the weekend suggested unofficial UK PM candidate Burnham was eyeing right-leaning Home Secretary Shabana Mahmood as potential Chancellor. The Sun reported Mahmood “is meant to have done a deal with Burnham”. Mahmood has previously defended efforts to reduce the amount spent on welfare, and is known for a right-leaning stance on immigration. Though these updates are speculative at the moment, Sterling has attracted buyers and is one of the only G10 currencies positive against the Buck. GBP/USD +0.1%, EUR/GBP -0.1%.
USD is unchanged/modestly firmer and either side of the 99.00 mark. No US-specific newsflow over the weekend, just Geopolitics as explained below. Set to be a busy week of Labour market data, today sees the release of S&P/ISM manufacturing PMIs, Tuesday sees JOLTs Job Openings, ADP weekly payrolls on Wednesday, Challenger layoffs on Thursday, and then NFP on Friday. ING writes, “Should the jobs data stay supportive and price pressures through the ISM surveys remain intense, markets can probably shift towards pricing one full 25bp Fed rate hike this year. That compares to +17bp of tightening priced currently.”
NOK is being helped by energy benchmarks with Brent Aug’26 +3% after NYT reported Trump sent tougher terms to Iran regarding the peace framework, Tasnim outlined that Iran could propose changes to the MoU, while both sides exchanged fire over the weekend. USD/NOK -0.2%, NOK/SEK +0.5%.
Aussie lacks direction after mixed Chinese PMI data overnight, while Kiwi lacks demand with domestic participants absent amid a market holiday. AUD/NZD +0.4%, AUD/USD U/C, NZD/USD -0.5%.
Fixed Income

A softer start for fixed income as the energy space climbed in APAC hours, given a handful of detrimental updates on the US-Iran situation. Since, the press conference from Iran's spokesperson has provided further support to energy, with Araghchi noting that no negotiations have taken place on the details of the nuclear issue.
USTs and Bunds lower overnight, in proximity to the troughs from Friday. Gilts opened lower by around 35 ticks and then slipped a handful more to a 88.31 trough, pressured but comfortably clear of levels below 88.00 at 87.94 and 87.86 from last week.
USTs and Bunds are similarly at lows, down by five and 50 ticks respectively. Specifics for the US and Europe are a little light aside from a few Central Bank speakers, with the focus firmly on any geopolitical update(s) or a significant change to the equity space. On the latter, the focus has been firmly on South Korea given the stellar gains in the market YTD and the ongoing marked strength seen today, i.e. Samsung Electronics +10%.
No move to the final PMIs for the EZ and UK thus far. Ahead, we get the US ISM Manufacturing PMI before the latest Atlanta Fed.
Commodities

The geopolitical environment is clouded by uncertainty, with a recent flare-up between the US and Iran once again leading to firmer trade in crude benchmarks. In brief, the US Central Command said that military forces conducted strikes against Iranian radar at command and control sites located in Goruk and Qeshm Island – this was then met with IRGC retaliation. Outside of Iran, Kuwait said air defences were intercepting hostile missile and drone attacks.
As for the journey to negotiations, the US and Iran are both reportedly altering the draft MoU. President Trump reportedly sent “tougher terms” regarding the framework, NYT reported. In response, Tasnim suggested that Iran may propose its own changes.
As for the European day, there have been a few appearances from Iranian officials; Deputy FM for Legal Affairs Gharibabadi noted that Iran’s goal is to accompany ships through the Strait, and “these arrangements are not temporary and Iran will not back down”. Elsewhere, Iran's FM Baghaei said, "no negotiations have taken place on the details of the nuclear issue at this stage". Comments which helped the upward bias in oil benchmarks.
WTI and Brent are stronger this morning by c. 4.1% and 3.1% respectively. Prices gapped up at the open, and gradually moved higher as the session progressed; as it stands, the complex resides towards highs. WTI trades within a USD 88.45-91.26/bbl range, whilst Brent holds at the upper end of a USD 90.05-92.11/bbl range.
Spot gold is lower by around a per cent and currently resides within a USD 4,490-4,546/oz range, and towards the bottom end of Friday’s range. Ultimately, action is dictated by the inflationary implications of heightened geopolitical risk. Elsewhere, base metals are broadly firmer, following on from a positive APAC session overnight. 3M LME copper posts gains of c. 1.4% and currently trades towards the day’s peaks, within a USD 13,635.4-13,814/t range.
Russia to ban jet fuel exports until the end of November, Ifx reported.
Citigroup raises its near-term copper price forecast to USD 14,500 per metric tonne and set a 6-12 month target of USD 15,000 per metric tonne.
Trade/Tariffs

UK Business Secretary Kyle set to travel to India this week for talks about the recent trade deal as well as steel tariff measures announced by the government in March, SKY news reported.
China's State Council said new rules regarding China tightening oversight of outbound investments in selected technologies take effect July 1st.
China vowed to resolutely retaliate if the EU proceeds with new restrictive trade measures, following a European Commission discussion on China policy last Friday.
Central Banks

Fed's Powell (voter) said Fed will lose credibility if the President removes officials over policy, while he remain on the board according to Barron's.
Fed’s Waller (voter) said the spread of stablecoins globally could broaden the reach of US monetary policy.
BoJ's Koeda said oil is a negative supply shock for Japan.
EU ECB Consumer Inflation Expectations (Apr) 1yr ahead 4% (prev. 4%); 3yr ahead 2.9% (prev. 3%).
ECB's Villeroy said Bank of France estimates for French Economic growth in 2026 will be revised down, in view of bad Q1 surprise. Growth estimates should remain positive in most scenarios.
ECB Schnabel said supply shock is seen as large and highly persistent, adds that oil prices are expected to stay elevated for some time.
BoE’s Mann said the long run of good luck central bankers experienced in containing inflation has run out with a more shock-prone era setting in.
ECB’s Pereira said the central bank shouldn’t hesitate to act and thinks that it is better to act sooner rather than later, so that they don’t have much greater second-order effects later on.
ECB’s Vujcic said Croatia’s inflation is likely to ease in May after accelerating to the fastest annual pace in the euro area of 5.8% in April.
PBoC set USD/CNY mid-point at 6.8167 vs exp. 6.7645 (prev. 6.8176).
Geopolitics

Russia to ban jet fuel exports until the end of November, Ifx reported.
Ukraine's Air Force said Russian guided bombs strike the Donetsk region and drones are heading from Kharkiv to the Poltava region.
Ukraine Air Force said enemy drones were detected over northwestern Kharkiv region.
US Event Calendar

9:45 am: May F S&P Global US Manufacturing PMI, est. 55.3, prior 55.3
10:00 am: May ISM Manufacturing, est. 53, prior 52.7
10:00 am: May ISM Prices Paid, est. 85, prior 84.6
10:00 am: Apr Construction Spending MoM, est. 0.25%, prior 0.6%
DB's Jim Reid concludes the overnight wrap

As it’s unbelievably the start of June already, Henry will shortly release our regular performance review for May. It was another eventful month, as hopes for a US-Iran deal meant Brent crude (-19.3%) saw its biggest decline since March 2020 when the pandemic lockdowns began. So stagflation fears eased dramatically, and the S&P 500 hit fresh records. Otherwise, chip stocks were the big outperformer as excitement around AI returned, with the Philly semiconductor index up another +22.2% in total return terms in May. Moreover, South Korea’s KOSPI was up +28.5%, taking its YTD gains to an astonishing +102.4% in just five months. See the full review in your inboxes shortly.

Whether June continues the positivity of May will surely depend on whether the hopes of a US-Iran deal turn into reality. It's been 93 days now since the strikes began and 54 since the truce that later became a ceasefire started. We've never felt closer to a deal but potentially never felt closer to it all falling apart with isolated strikes becoming more frequent including some again over the weekend. It's hard to imagine remaining in limbo for much longer given that if the Strait of Hormuz remains closed into mid-summer it will at some point likely lead to a non-linear tipping point of economic stress. For now, it seems Mr Trump is still deciding on whether the current negotiations between the two nations satisfy his demands. He has been surprisingly quiet over the weekend which indicates things perhaps coming close to a head. Meanwhile Israel and Hezbollah are trading attacks again which complicates matters even if fresh ceasefire proposals are being worked on. We could have said this a week ago, but it really feels like the next few hours and days will be critical. 

Brent is up +2.4% this morning but it hasn't impacted equities much with S&P (+0.25%) and Nasdaq (+0.52%) futures higher again and Asia again strong, mostly on the AI trade. Indeed the KOSPI (+4.45%) is again the standout performer. Elsewhere the Nikkei (+0.85%) and Hang Seng (+0.88%) are the other main gainers with mainland Chinese markets slightly lower, perhaps on fairly flat PMI data this morning and over the weekend. 10yr UST are back up +3bps at 4.465% given the higher oil this morning. 

Over the weekend China's official manufacturing and non-manufacturing PMI came in at 50.0 (in-line with consensus, 50.3 last month) and 50.1 respectively (consensus 49.5, 49.4 last month). The private sector manufacturing PMI came in at 50.1, four tenths of a percent higher than last month. You can see our economists' review of the PMIs here. He believes you are seeing the impact of higher oil prices in the activity data.

Looking ahead to the coming week, the key event for markets outside of Iran will be Friday’s US May employment report. Our economists forecast a notable moderation in payroll growth compared with the relatively strong pace seen earlier in the spring. Headline nonfarm payrolls are expected to rise by around 50k (consensus 89k), down from 115k in April, while private payrolls are forecast at roughly 60k (consensus 89k) after 123k previously. This slowing partly reflects their expectation that hiring in sectors that have been particularly strong in recent months – notably transportation and warehousing, as well as retail trade – begins to cool. Unemployment is expected to remain steady at 4.3% (consensus also 4.3%). 

Ahead of Friday’s jobs report, the rest of the US labour market data flow should reinforce the Federal Reserve’s growing confidence that labour market conditions are stabilising. Tomorrow, the April JOLTS report will shed light on the gross hiring and separation flows that underpinned last month’s solid net job gains. On Wednesday, the ADP private payrolls report is forecast by our economists to show a gain of around 130k, up from 109k previously, consistent with the strength seen in ADP’s high-frequency indicators. On Thursday, weekly initial jobless claims are expected to remain relatively low, although our economists see scope for a temporary uptick to around 220k, partly reflecting seasonal distortions associated with the Memorial Day holiday period. 

Beyond the labour market, the focus will also be on whether recent resilience in US economic activity is sustained. Today, the May manufacturing ISM survey is forecast by our economists to rise to around 54.0 from 52.7 in April, supported by encouraging signals from regional Fed surveys. Later in the week, Thursday’s services ISM is expected to edge higher to roughly 53.9 from 53.6. That said, the backdrop for consumer spending remains mixed. Elevated petrol prices and tariff-related increases in core goods inflation are emerging headwinds, and our economists therefore expect tomorrow’s unit motor vehicle sales to remain broadly flat at around 16.0 million annualised.
Alongside the data, Federal Reserve communication will be closely watched. On Wednesday, the Fed will publish its Beige Book, offering anecdotal evidence on economic conditions across districts. Fed speak is scattered through the week but it's mostly from officials who have spoken recently so it shouldn't break new ground. 

Outside the US, Europe will see several important inflation releases. Today, the ECB publishes its consumer expectations survey, providing an update on household inflation views. Tomorrow, the Eurozone releases its flash CPI estimate for May, following national releases over recent days and today. Further inflation data are due on Thursday from Switzerland and Sweden, adding to the regional picture ahead of upcoming central bank meetings.

Central bank speakers are also in focus outside of the Fed. ECB President Lagarde is scheduled to speak on Thursday, while Bank of England Governor Bailey appears multiple times through the week, including tomorrow, Thursday and Friday. In Asia, Bank of Japan Governor Ueda is due to speak on Wednesday.

In China we've already had most of the PMIs over the weekend and this morning (see more above) but the private sector services PMI is out on Wednesday. In Japan, Friday brings labour cash earnings data. Our Chief Japan economist expects wage growth to slow to around 2.5% year on year, from 2.8% previously. Elsewhere in the region, Australia releases its Q1 GDP figures on Wednesday.

Finally, the corporate earnings calendar is also busy, with several high-profile releases. In the technology sector, results are due from Broadcom, Palo Alto Networks and CrowdStrike during the week, while consumer-focused names reporting include Inditex, Dollar General and Lululemon Athletica. See the day-by-day calendar at the end as usual for a fuller week ahead preview. 

Recapping last week now and markets put in a strong performance overall, driven by mounting hopes for some kind of peace deal between the US and Iran. Several headlines pointed in that direction, with multiple outlets reporting that the two sides would agree a 60-day ceasefire extension. So that led to a sharp decline in oil prices, with Brent crude down -11.10% last week (-1.77% Friday) to $92.05/bbl. And investors moved to price out the chance of a protracted conflict as well, with the 6-month Brent future also down -4.64% to $84.18/bbl. 

That decline in oil prices meant fears about inflation continued to ease last week. For instance, the Euro 1yr inflation swap fell -38.1bps to 3.24%, and the US 1yr inflation swap fell -10.2bps to 3.01%. So investors also dialled back their expectations for rate hikes too, with a Fed hike by December down to 57% by the close on Friday, having been at 95% the previous week. Similarly at the ECB, the number of hikes priced by December fell from 65bps to 53bps by Friday’s close. And in turn, sovereign bonds rallied around the world, with the 10yr Treasury yield falling -12.2bps last week (-1.1bps Friday) to 4.44%, whilst the 10yr bund yield fell -10.0bps (-2.4bps Friday) to 2.94%. 

With optimism rising on the geopolitical situation, equities also put in a strong performance around the world. For instance, the S&P 500 rose +1.43% (+0.22% Friday), marking a 9th consecutive weekly gain for the index, which is the first time that’s happened since 2023. Tech stocks did particularly well, with the NASDAQ up +2.39% (+0.20% Friday). And the rally extended globally, with Japan’s Nikkei up +4.72% (+2.53% Friday), whilst Europe’s STOXX 600 saw a modest +0.14% gain last week (+0.14% Friday).  Finally in credit, spreads tightened a bit last week, with Euro IG tightening -1bps, and Euro HY tightening -10bps. In the US, IG spreads were steady, while HY tightened by -3bps.

Tyler Durden
Mon, 06/01/2026 - 08:25