Market News

Building Permits m/m (Apr) -3.4%

• prior -10.5%

Building Permits y/y (Apr) +10.2%

• prior +9.0%

Private House Approvals m/m (Apr) -1.0%

• prior +0.9%

Business Inventories q/q (Q1) +0.5%

• prior -0.1%

Company Gross Profits q/q (Q1) -1.3%

• prior +5.8%

Net Exports Contribution to GDP (Q1) -0.8%

• prior -0.1%

Current Account (Q1) -A$27.1B

• prior -A$21.1B

Earlier:

• RBA's hawkish Harper hints herald hike
• Australia minimum wage rises 4.75%

New Zealand data

Terms of Trade Index Q1 -2.0% q/q

• expected -1.2%, prior 3.7%

Export Prices Q1 -2.7% q/q

• expected -1.1%, prior 5.3%

Import Prices Q1 -0.7% q/q

• expected +0.3%, prior 1.5%

Building Permits April +10.9% m/m

• prior -1.3%

Australia's services PMI fell to 48.7 in May from 50.7, with new orders contracting at the fastest pace in two and a half years and employment falling for the first time since late 2024.

Summary: Source: S&P Global Australia Services PMI, May 2026

• The services Business Activity Index fell to 48.7 in May from 50.7 in April, the second contraction in three months, with respondents citing reduced demand, market uncertainty and higher prices linked to the Middle East conflict
• New business declined at the sharpest pace in just under two and a half years, falling for a third consecutive month; new export orders also dropped for the second time in three months
• Employment fell for the first time since December 2024, ending a 17-month streak of job…

China's SAIC Motor plans its first EU factory in Spain's Galicia, with a 200 million euro initial investment, 120,000-vehicle annual capacity and an operational target of end-2028.

Summary: Sources: Reuters; Xinhua

• SAIC Motor will build its first European Union manufacturing facility in Galicia, northwestern Spain, located between the port of Ferrol and the town of As Pontes
• Initial investment is set at 200 million euros ($232 million), with construction due to begin in 2027 and the plant targeting operational status by end-2028
• Full capacity at the site is expected to reach 120,000 vehicles per year once a second phase is complete, with the project also including a logistics and vehicle assembly hub near Ferrol port
• The project is expected…

Canada's trade minister says US talks are unfrozen and a meeting with USTR Greer was positive, but warned the road to conclusions is not always a straight line.

Summary:

• LeBlanc described a meeting with US Trade Representative Jamieson Greer as positive, with a follow-up planned for next week
• Canada raised concerns over US tariffs on autos, steel, aluminum and softwood lumber
• LeBlanc said Canada has made what it considers significant submissions addressing US trade concerns, and has been preparing for potential US Section 301 tariff investigations
• He characterised US-Canada trade talks as having been unfrozen for a number of months
• Bilateral USMCA discussions with Mexico are ongoing, with LeBlanc expressing confidence that three-way talks on…

• Bitcoin has lost its cool
• Copper prices are nearing records as analysts get increasingly bullish
• Trump to Iran: It is time to make a deal
• Crude oil prices move above the 200 hour MA at $92.48
• Hezbollah will not accept partial ceasefire with Israel - report
• Bank of England's Greene: Risk of acting is less severe than the risk of failing to act
• Rubio: We are in talks with Iran
• BOE's Bailey: The inflation overshoot is entirely due to events in the Persian Gulf
• US April JOLTS job openings 7.618m vs 6.88m expected
• First they came for the free cash flow, then the came for the equity
• Fed's Hammack: We may need to act soon if inflation trends don't cool
• USD is mixed to kickstart NA trading on June 2. What are the technicals telling traders?
• investingLive…

Data yesterday suggested Australia's GDP is going to come in under the expectations showing in the screenshot below at 0.5% and 2.7%. A new survey has not been done, but I'd be around 0.3% and 2.4% now.

Also on the agenda, China private services PMI. Official PMIs for May were mixed, while the private manufacturing PMI fell to 51.8.

Trump on TruthSocial is saying

• Trump says reports that the U.S. and Iran stopped communicating are false.
• He claims discussions between U.S. and Iranian officials have continued without interruption, including over the past several days.
• He emphasizes that talks were active four days ago, three days ago, two days ago, one day ago, and today.
• Trump acknowledges uncertainty about the outcome, stating, "Where they lead, one never knows."
• He reiterates his message to Iran that it is time to reach a deal.
• Trump argues that the current situation has persisted for 47 years and can no longer continue.
• The post suggests diplomatic channels remain open despite media reports to the contrary.

Market view

The comments are likely to be viewed as…

Goldman Sachs is speaking at the Economic club of New York and to CNBC.

• I believe AI is going to unleash a growth moment, productivity boom
• Demand for community is not going to go in straight line everybody is currently projecting
• I do not believe we are going to have massive structural unemployment due to AI, but AI is going to interrupt jobs, dislocate
• Alphabet shares are trading quite well despite the $80 billion equity raise.
• This is the first concrete data point for bringing something like this to the market.
• We are at a moment where there is more greed than fear. The capital is available.
• When capital is available, take the capital if you know you are going to need it.
• These are unprecedented in the terms of size but there is also…

Hezbollah rejects a partial ceasefire with Israel, AFP reports.

Yesterday, a report citing Lebanon's parliamentary speaker said Hezbollah was ready for a ceasefire. What Israel appeared to offer -- via Bibi -- was that they wouldn't strike Beirut in exchange for Hezbollah standing down. I ridiculed the suggestion at the time because it included Israel continuing to expand its gains in Southern Lebanon.

Given that, I don't see how this can be a surprise.

Trump just now:

This is a good sign and it's led to a further bounce in risk assets.

Trump added to that by denying earlier reports that talks were halted:

Throughout the day, there are all kinds of talks…