Market News

• Prior month -0.20 revised to -0.15

Details from the Chicago Fed:

• Federal Reserve Bank of Chicago CFNAI rose to +0.14 in April from -0.15 in March, signaling an improvement in overall U.S. economic activity.
• The 3-month moving average (CFNAI-MA3) edged up to +0.03 from +0.02.
• The CFNAI Diffusion Index increased to +0.06 from +0.03, pointing to somewhat broader economic improvement.
• Of the 85 indicators, 47 made positive contributions, while 38 were negative.
• 44 indicators improved from March, 40 deteriorated, and 1 was unchanged.
• Production-related indicators showed the biggest improvement, contributing +0.18 versus -0.13 in March.
• Sales, orders, and inventories improved to +0.02 from -0.03.
• Employment indicators slipped slightly to -0.02…

• Iran's frozen funds emerge as potential final sticking point in US-Iran deal
• UK CBI shows retailers sentiment fell at a slower pace compared to previous two quarters
• Japan government retains its assessment that the economy is recovering moderately in May
• ECB policymaker Lane hints the market is correct in expecting a rate hike in June
• Oil prices nudge up from overnight lows awaiting further US-Iran developments
• Indian Rupee recovers losses on lower oil prices, but risks remain on prolonged stalemate
• Iran's IRGC identifies hostile aircrafts entering its airspace, downs MQ9 drone
• FX option expiries for 26 May 10am New York cut
• USD/JPY remains stuck in a tight range amid US-Iran deal optimism and hawkish Fed risk
• Markets reserve some caution on…

According to Iran's Fars news agency, the unfreezing of billions of dollars in Iranian assets has emerged as the final obstacle to securing a Memorandum of Understanding (MoU) aimed at ending recent hostilities and reopening the Strait of Hormuz. This issue is currently being ironed out through Qatari mediation.

The fact that the debate has shifted from whether Iran will cooperate on its nuclear material to how and when Iran gets its money back could be viewed as a net-positive signal. It could suggest that the structural layout of a deal, including a 60-day extension of the current ceasefire and a mechanism to manage or dispose of Iran's highly enriched uranium stockpile, is largely mapped out.

Iran is reportedly demanding guaranteed…

• UK CBI Distributive Trades -46 vs -50 expected
• Prior -68
• Full report here

The agency noted: "retail selling prices grew in the year to May at the slowest rate in over a year and are set to grow at a similar pace in June. Sales volumes in the retail sector fell short of seasonal norms in May, while annual sales volumes continued to fall but at a slightly slower pace. Next month, sales are expected to remain “poor” for the time of year, with the sales decline in annual volumes set to ease slightly further."

They added that "weak demand continues to weigh on retailers’ sentiment, which has remained negative since mid-2024, as firms anticipate that their business situation will deteriorate over the coming quarter. Against this backdrop, retailers…

There is no change to the assessment from April (which was also the same as in March), as the government notes that "the Japanese economy is recovering moderately, while attention should be given to the effects caused from the situation in the Middle East".

As a reminder, this assessment was changed from February which at the time noted that "the Japanese economy is recovering at a moderate pace, while the effects caused from the US trade policies remain".

For the month of May, there were no changes to the outlook for private consumption (picking up), business investment (picking up), exports (almost flat), industrial production (flat), and employment situation (showing signs of improvement).

And as a whole, there isn't too much of a change…

IC Markets Global – Europe Fundamental Forecast | 26 May 2026

What happened in the Asia session?

Singapore surprised positively on GDP, Japan showed softer momentum in leading/coincident indicators, and China’s FDI data remained weak, which together kept the market tone cautious but not outright risk-off. The most sensitive instruments were USD/JPY, USD/SGD, Nikkei 225, Topix, Japanese government bonds, and China-linked equities and commodities, with Singapore assets best supported and Japan growth-sensitive assets most affected.

What does it mean for the Europe & US sessions?

Traders opening European and U.S. sessions today face a volatile mix of geopolitical risk and stubborn inflation: oil prices rebounded nearly 2% to approach…

•  Asian Stock Markets : Nikkei down 0.16%, Shanghai Composite down 0.84% Hang Seng up 0.45% ASX down 0.40%
• Commodities : Gold at $4,565.75 (-0.87%) Silver at $76.963 (-1.83%), Brent Oil at $95.25 (1.96%), WTI Oil at $91.83 (1.68%)
• Rates : US 10-year yield at 4.506, UK 10-year yield at 4.9060, Germany 10-year yield at 2.9489

• (GBP) BRC Shop Price Index y/y  1.2%  to 1.1%   expected

Asia-Pacific markets traded mixed Tuesday as investors assessed renewed optimism surrounding U.S.-Iran peace talks, while South Korea’s benchmark index surged to a record high after reopening from a public holiday.

South Korea’s Kospi climbed to an all-time high of 8,094.90 in early trading,…

Oil Drops Hard on Peace Hope – Brent down 7%
Markets opened the week with improving risk sentiment despite subdued trading conditions, as several major financial centres remained closed for extended public holidays, including the United States, where equity and bond markets were shut for Memorial Day. As a result, US stock indices and Treasury yields were unchanged, with the Dow Jones holding at 50,579, the S&P 500 at 7,473, and the Nasdaq at 26,343, while the US 2-year Treasury yield remained at 4.121% and the 10-year yield held at 4.558%.

Investor sentiment was driven primarily by increasing optimism surrounding Middle East peace negotiations, with Iranian officials reportedly in Qatar for ongoing discussions. While rhetoric from both…

IC Markets Global – Asia Fundamental Forecast | 26 May 2026

What happened in the U.S. session?

Hopes of a Middle East peace breakthrough lifted equities and pressured crude oil and the dollar, while Treasury markets stayed sensitive to Fed commentary and upcoming data rather than reacting to a major surprise release. In practical trading terms, the instruments most affected were oil, FX, and U.S. equity futures, with bonds reacting more modestly to rate expectations than to a fresh economic print.

What does it mean for the Asia Session?

Escalating Middle‑East‑linked supply‑chain risks, subtle shifts in US dollar and equity sentiment, and domestic‑policy signals from key regional central banks, all of which can tilt the region toward…

Iran’s Islamic Revolutionary Guard Corps (IRGC) announced it had detected and shot down an MQ-9 drone. The IRGC said in a statement that it has the right to respond to any US ceasefire breach.

The drone shootdown followed a maritime clash tonight. US Central Command (CENTCOM) confirmed that American forces sank two IRGC mine-laying speedboats in the Strait of Hormuz and subsequently struck an active missile site at Bandar Abbas.

The localized escalation was triggered after Iran activated its regional air defenses and launched a volley of anti-ship cruise missiles toward US Navy assets operating in the Sea of Oman and the choke point itself. Iranian sources report that four sailors were killed in the American retaliatory strikes.

Despite…