Market News

Al Jazeera reporter, Ali Hashem, posted on X:

"A highly informed source tells me that Trump's post on the "Truth Social" platform regarding lifting the siege was actually the first condition before moving on to the rest of the agreement steps. And according to the source, Tehran insisted on an official and public announcement first. It seems that Trump tried to present the matter as a secondary detail among larger files, while Iran considers it an essential step to build trust before entering the more sensitive files. So far, direct discussions on the nuclear file itself have not been opened. The path is expected to proceed gradually through a memorandum of understanding (MOU), with each step met by a reciprocal step. The source adds…

• Fars News Telegram link here

From Fars News Telegram channel:

Informed sources have rejected recent claims by US President Donald Trump regarding a possible agreement with Iran, describing his statements as a “mixture of truth and falsehood” and an attempt to portray a fabricated victory. According to these sources, it has become clear to almost everyone that these claims lack credibility.

According to the report, the agreement text, drafted under the framework of “commitment in exchange for commitment”, is in the final stages of approval in Iran, and no final decision has yet been made. Meanwhile, Trump, who reportedly sees himself as unable to walk away from the deal, has made statements that contradict the contents of the agreement text,…

Full report here

The Trump administration is preparing a proposal that would significantly tighten automotive sourcing requirements under the US-Mexico-Canada Agreement (USMCA), potentially requiring that half of all components and materials used in a vehicle originate from the United States in order to qualify for the trade pact's preferential tariff treatment, according to a report by The Wall Street Journal.

The proposal, which is being developed ahead of formal negotiations over the future of the North American trade agreement, would mark one of the most substantial revisions to the automotive rules of origin since the USMCA replaced NAFTA in 2020.

Under the current agreement, vehicles must contain at least 75% North American content by…

• Iran must agree they'll never have a nuclear weapon or bomb
• The Hormuz Strait must be immediately open, no tolls
• The naval blockade will now be lifted
• Uranium will be unearthed by the US in coordination Iran, plus the International Atomic Energy Agency, and destroyed
• All water mines, if any, will be terminated
• No money will be exchanged until further notice
• Other items, of far less importance, have been agreed to. I will be meeting now, in the Situation Room, to make a final determination

• S&P 500 +0.44%
• Nasdaq Composite +0.58%

The latest catalyst for the push into new all-time highs was yesterday's Axios report saying that US and Iranian negotiators have reached an agreement on a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran's nuclear program, but President Trump has yet to give his final approval.

The most important thing in terms of economic outlook is the Strait of Hormuz. There's still lots of confusion on how and when it's going to reopen. Just now, Iran's Foreign Minister Aragchi said in a post on X that he discussed the Hormuz and its future administration in line with their sovereign responsibilities and international law.

Iran has been pushing for a toll system with Oman,…

• We gain concessions not with talks, but with missiles
• We have no trust in guarantees or words
• Only actions are the measure
• No action will be taken before the other side acts
• The winner of any agreement is the one who is better prepared for war from the day after

Iran’s chief negotiator and parliament speaker, Mohammad Bagher Ghalibaf, explicitly stated that Iran gains concessions not with talks, but with missiles, while emphasizing that Iran places little faith in diplomatic guarantees or verbal commitments.

The remarks come amid ongoing diplomatic efforts between Iran and the United States, where negotiations have been complicated by deep mistrust, escalations in the Strait of Hormuz, and disagreements over sanctions, security arrangements,…

• Prior +2.9%
• HICP +2.7% vs +2.8% y/y expected
• Prior +2.9%
• Core CPI Y/Y +2.5% vs +2.3% prior

The German states inflation readings released earlier in the day were much lower than the prior month, so a notable miss on the national measure was expected. The German Core CPI Y/Y rose to 2.5% from 2.3% prior.

That's due to a pullback in energy prices but the ECB is more focused on underlying inflation pressures and the risk of second-round effects if the situation in the Strait of Hormuz persists longer than expected.

As a reminder, the ECB is widely expected to deliver an "insurance" 25 bps rate hike in June and pause at least until September to see how the data and the US-Iran situation evolves over the summer.

• Prior was -0.6%
• GDP +0.0% q/q vs -0.2% prior
• March GDP -0.1% vs +0.0% expected
• Prior +0.2%

Real gross domestic product was unchanged in the first quarter of 2026, after declining 0.2% in the fourth quarter of 2025. Higher imports of goods, particularly gold, were offset by accumulations of business inventories. Decreased business and government capital investment was counterbalanced by higher household spending, as final domestic demand edged 0.1% lower.

On a per capita basis, real GDP increased 0.2% in the first quarter of 2026, as the population declined for a second consecutive quarter and GDP remained unchanged.

• Prior was -$87.45 billion

The international trade deficit was $82.4 billion in April, down $2.9 billion from $85.3 billion in March. Exports of goods for April were $219.7 billion, $8.5 billion more than March exports. Imports of goods for April were $302.1 billion, $5.6 billion more than March imports.

• Prior was +1.3%

For background, the Monthly Wholesale Trade Survey , conducted by the U.S. Census Bureau, is one of the government's key economic indicators, tracking sales, end-of-month inventories, and inventories-to-sales ratios for merchant wholesalers across the country. The survey excludes manufacturers' sales branches and offices, as well as wholesale electronic markets, agents, and brokers. Each month, the Census Bureau surveys a probability sample of approximately 4,200 employer firms, stratified by industry and sales size, with estimates adjusted for seasonal variation and trading day differences but not for price changes.

The wholesale sector serves as a critical intermediary in the U.S. supply chain, connecting manufacturers and…

Headlines:

• Deal or no deal? Markets continue to eye US-Iran headlines ahead of the weekend
• Japan spent ¥11.7 trillion on foreign exchange interventions in the past month
• Japan chief cabinet secretary says extremely concerned about speculative FX moves
• Fed policymaker Schmid: My primary concern is inflation, which is too hot
• BOE governor Bailey: We have already tightened policy by taking rate cuts off the table
• German states see slight drop in inflation pressures in May
• French inflation continues to pick up in May, highest reading since February 2024
• Inflation pressures continue to hold up in Spain, core prices nudge a little higher
• Italy inflation continues to push up in May, core prices nudge higher as well
• German unemployment falls unexpectedly…