Market News

• CPI +3.2% vs +3.2% y/y expected
• Prior +2.7%
• HICP +3.3% vs +3.2% y/y expected
• Prior +2.8%

The initial estimates indicate that inflation pressures in Italy continued to push up in May. The jump as it was in April owes much to a further increase in energy prices but there was also an acceleration in both goods and services inflation too.

Looking at the breakdown, prices of non-regulated energy products were up 12.6% compared to May last year (previously 9.6% in April). Meanwhile, prices for regulated energy products were up 5.8% compared to the same month last year (previously 5.3%).

Meanwhile, goods prices also jumped up to 3.5% (previously 3.1%) while services prices moved up to 2.8% (previously 2.4%).

Overall, that sees core annual inflation…

•  Asian Stock Markets : Nikkei up 2.60%, Shanghai Composite down 0.12% Hang Seng up 0.80% ASX up 1.48%
• Commodities : Gold at $4,540.09 (0.18%) Silver at $76.095 (0.24%), Brent Oil at $91.76(-1.01%), WTI Oil at $87.77 (-1.27%)
• Rates : US 10-year yield at 4.439, UK 10-year yield at 4.8210, Germany 10-year yield at 2.9510

• (USD) Core PCE Price Index m/m  0.2%  to 0.3%   expected
• (USD) Prelim GDP q/q  1.6%  to 2.0%   expected

Here’s a rewritten version in approximately 220 words:

Asia-Pacific markets advanced on Friday as investors balanced renewed military tensions involving Iran with growing optimism that Washington and Tehran were nearing a temporary agreement to end…

IC Markets Global – Europe Fundamental Forecast | 29 May 2026

What happened in the Asia session?

President Trump’s sharp warning to Iran, which spiked geopolitical risk and drove oil prices above $110/barrel for Brent, while triggering risk-off sentiment across Asian equities, the Nikkei 225, ASX 200, and Hang Seng all fell nearly 1% or more. The instruments most impacted were crude oil futures (largest gainer), Japanese government bonds (yield surged amid inflation fears), Asian stock indices (broad declines except South Korea’s Kospi), and Bitcoin/tech stocks (both fell as investors rotated away from risk assets).

What does it mean for the Europe & US sessions?

Record-high global stocks (S&P 500 and Nasdaq hitting fresh peaks led by…

Here are all the state readings released around the same time:

• Bavaria CPI +2.6% vs +2.9% y/y prior
• Saxony CPI +2.7% vs +3.0% y/y prior
• North Rhine Westphalia CPI +2.4% vs +2.7% y/y prior
• Baden Wuerttemberg CPI +2.4% vs +2.6% y/y prior

It's a bit of a change up compared to the preliminary readings for France and Spain earlier in the day. Even the monthly estimates here point to a marginal drop across the board. The breakdown shows monthly inflation falling in Bavaria (-0.2%), Saxony (-0.2%), North Rhine Westphalia (-0.2%), and Baden Wuerttemberg (-0.3%).

Overall, that points to slightly softer headline annual inflation estimates when compared to April. That being said, they still represent a modest jump since the Middle East conflict began. And…

Markets Volatile on Potential Ceasefire Extension – Nasdaq up 0.9%

US equity markets moved higher overnight, with technology stocks leading the gains after reports emerged that the United States and Iran had agreed to extend the current ceasefire arrangement, helping improve overall investor sentiment despite ongoing uncertainty surrounding the region. The Nasdaq outperformed, climbing 0.91% to close at 26,917, while the S&P 500 rose 0.58% to finish at 7,563. The Dow Jones was comparatively subdued, edging just 0.05% higher to close at 50,668.

Oil markets experienced another volatile session as traders continued to react to developments in the Middle East. Brent crude eased back 1.13% to settle at USD $93.22 per barrel after earlier…

IC Markets Global – Asia Fundamental Forecast | 29 May 2026

What happened in the U.S. session?

Overnight U.S. session pricing was driven first by geopolitics and then by a dense U.S. data calendar. The strike-related Middle East headlines lifted crude oil and weighed on risk assets, while GDP, PCE, and jobless claims were the main macro releases likely to steer the dollar, yields, and equity futures once U.S. trading got underway.

What does it mean for the Asia Session?

German preliminary CPI and BoE Governor Bailey’s speech both can reshape European-driven FX flows and global risk sentiment, with Canada’s GDP adding a secondary CAD/risk influence. Markets will also digest any late US macro or Fed commentary from the prior session,…

• Prior 20k
• Unemployment rate % vs 6.4% expected
• Prior 6.4%

More to come..

• CPI +3.2% vs +3.4% y/y expected
• Prior +3.2%
• HICP +3.6% vs +3.6% y/y expected
• Prior +3.5%

The preliminary estimate shows that Spanish headline inflation held steady in May, keeping at a similar rate to April. However, core annual inflation continues to tick up and is keeping above the average seen for last year already. And we're only just five months in, still having to factor in further spillovers from higher energy prices in the months ahead.

Core annual inflation is estimated to move up to 2.9%, same as it was in March but well above any levels that were recorded last year. The estimate is the highest since June 2024 otherwise.

Circling back to headline prices, the Spanish stats office points out that higher prices were observed in the…

• Don't want to comment on forex levels, intervention
• But is extremely concerned about speculative moves
• The stance by the government has always been to take appropriate action on forex matters

A bit of a verbal warning shot there as Tokyo officials continue to be alarmed by USD/JPY lingering above 159.00 but still not yet wanting to take a run at the 160.00 level. But even so, we've already seen the rebound in the currency pair over the last few weeks. And that is one that almost negates the entirety of Japan's intervention efforts since late April.

We are expected to see some intervention data come out later in the day. But at this point, it should just confirm what we already know and not offer too much else.

From earlier this week:

• USD/JPY…

• Prior +0.2%

French economic growth was revised down to -0.1% in the first quarter of the year, reflecting a contraction. That's not a good look especially as much of the drag came about from March, with the Middle East conflict weighing. As conditions look set to worsen further in the months ahead, that will make it very difficult to see an improved outlook for Europe's second largest economy ahead of the summer.

As such, a technical recession beckons for France with stagflation worries surely set to rise as the weeks go by.

• CPI +2.4% vs +2.5% y/y expected
• Prior +2.2%
• HICP +2.8% vs +2.9% y/y expected
• Prior +2.5%

On the month itself, French headline inflation was up 0.1% in May compared to April. That reflects some moderation in energy prices over the past month but that is still much higher than what it was a year ago. For some context, the headline annual inflation rate is now the highest since February 2024.

Looking at the breakdown, food prices held steady at 1.2% while services inflation ticked a little higher to 2.0% (previously 1.8%). The latter continues to be a key sticking point and with higher energy prices set to permeate to other categories, the danger is that it will see a stronger uptick in the months to come.

To add a bit of flavour to the report,…