Market News

• Prior +0.1%
• GDP +1.1% vs +0.8% y/y expected
• Prior +1.0%

That's a solid showing by the UK economy in the first quarter of the year, helped by a strong performance in March despite the challenges from rising energy prices. Services output was the biggest contributor, increasing by 0.8% in Q1 2026. That compares with the 0.2% growth in the same sector in Q4 2025. And even compared to the same quarter a year ago, services output was higher by 1.4%.

Of note, non-consumer-facing services (business-facing services) grew by 0.7%, while consumer-facing services grew by 0.8%.

Besides that, household consumption also showed a notable increase in the first quarter (+0.35%) which is a marked improvement from the final quarter of last year (+0.07%).

All in…

This will be in observance of Ascension Day and with it being on a Thursday, we could see many people take a "bridge" holiday on Friday into the weekend as well. The holiday here is not one that is observed in Spain or Italy though, with Assumption Day (in August) being the more important celebration.

The post here is just a heads up that even with it being a holiday in some parts of the region, markets will remain opened and trading hours will continue as per usual. The Euronext (except Oslo), Xetra, and Frankfurt stock exchanges will continue to operate accordingly, albeit with likely lesser liquidity conditions.

To those celebrating, I wish you all a good break today and a wonderful weekend too if you're taking some extra time off. Have…

There's not much in it so far. US president Trump and China president Xi shook hands at the Great Hall of the People in Beijing before taking turns to meet with the respective delegations from each country. And all they did was exchange some light comments before making their opening remarks so far.

As you would expect, Xi framed things in a way that stressed on the importance of US-China relations and stabilising ties between the two countries. In particular, he made reference to the Thucydides Trap moment. For the uninitiated, that's about the conflicting nature of a rising power that threatens to displace the supposed more established ruler in charge - making it a sort of destiny to be headed for war.

Xi remarks that: “Can China and the…

• Japan weighs supplementary budget to shield households from fuel price surge
• Xi is meeting with Trump, we should get some news in a few hours
• China's offshore yuan, CNH, trades to its strongest against the USD since February 2023
• Chinese supertanker exits Strait of Hormuz after two months stranded in Gulf
• PBOC sets USD/ CNY reference rate for today at 6.8401 (vs. estimate at 6.7888)
• South Korean Fin Min says KRW volatility is excessive compared with economic fundamentals
• Japan FX intervention flips yen from undervalued to overvalued, StanChart says
• UBS and Morgan Stanley bullish on Chinese stocks amid AI and resilience story
• UK house prices fall at fastest pace since 2023 as Iran war hits sentiment
• Cisco after hours stock 20% price surge - …

Pres. Trump speaking to reporters before heading off to China, is saying:

• Will have long talk with he about the Iran war.
• Don't think you need Xi's help on Iran
• The blockade has been 100% successful
• You are going to have s gusher of oil
• If you look back 3-4 months ago, you would think oil would be much higher
• Iran will not have a nuclear weapon.
• Any one who wants Iran to have a nuclear weapon is a stupid person.
• The navy is gone, the army is gone, the leaders are gone
• Inflation is short term.
• Will do a lot of business in China
• Will also discuss the end of the war in Ukraine
• The end of the war in Ukraine is very close
• OPEC is having trouble.
• Xi will be in the US before the end of the year.
• Iran will you do the right thing or we will finish the job
• No…

Japan's government is considering a supplementary budget to ease household fuel costs ahead of summer, Kyodo reports, sending 30- and 40-year JGB yields higher on increased debt issuance fears.

Summary:

• Japan's government is considering a supplementary budget aimed at reducing the burden of rising fuel costs on households ahead of the summer peak-demand season, according to Kyodo News, citing unnamed government sources
• The extra spending would support households facing elevated gasoline prices and utility bills during the hottest months of the year
• Yields on 30 and 40-year Japanese government bonds rose following the report as investors positioned for increased debt issuance
• Prime Minister Sanae Takaichi has repeatedly played down the…

We might get some news when they conclude, or perhaps we'll be kept waiting until tomorrow.

We'll soon find out!

In other events, Japan's government is considering extra budget, according to meida reports. Chief Cabinet Sec Kihara says no immediate need though.

The RICS UK house price balance fell to -34 in April from -25 in March, the weakest reading since November 2023, as Iran war fallout and rising mortgage rate expectations weighed on buyer sentiment.

As an aside, eyes are on UK politics:

• UK Starmer: Has made clear to allies, he will stand & fight if Streeting triggers contest.

But, some data to focus on due latet:

Info via Reuters.

Summary:

• The RICS headline house price net balance fell to -34 in April from a downwardly revised -25 in March, the weakest reading since November 2023 and well below the Reuters poll forecast of -26, according to the Royal Institution of Chartered Surveyors
• Gauges of new buyer enquiries and near-term price expectations edged slightly higher but remained in negative…

Euro area Q1 GDP confirmed at 0.1%Q/Q, the joint-weakest in nine quarters, as industrial output posted its steepest quarterly fall in two years and employment growth slowed sharply. A very bleak day for data from Europe on Wednesday ICYMI.

Summary:

• Q1 GDP was confirmed at 0.1%Q/Q, unchanged from the preliminary estimate, though the annual rate slipped to 0.8%Y/Y, the softest since Q2 2024, per the updated euro area release
• Germany contributed the most to the headline figure with 0.3%Q/Q growth, while Spain expanded 0.6%Q/Q and Italy grew for a third straight quarter at 0.2%Q/Q
• France failed to grow for the first time in five quarters, and Ireland contracted 2.0%Q/Q for a second consecutive quarter, shaving nearly 0.1ppt off the area-wide…

• The S&P and NASDAQ indices close at record levels. The Dow industrial average lags
• ECBs Lane:Monetary policy decisions will continue to be made on a meeting-by-meeting basis
• Kevin Warsh confirmed as the Fed Chair
• Minneapolis Fed Pres. Kashkari: Inflation is too high
• BOC Meeting Minutes: Sees future rate adjustments would likely be small.
• US treasury auctions off $25 billion of 30 year bonds at a high yield of 5.046%
• UK Starmer: Has made clear to allies, he will stand & fight if Streeting triggers contest.
• More from Fed's Collins:Strong productivity gains should help lessen inflationary pressure
• Feds Collins:It’s possible the Fed will need to hike rates to cool inflation pressures
• Crude oil inventories for the current week -4.306M versus -2.051M…

Secretary of State Marco Rubio is pressing China to use its leverage against Iran over Tehran's actions in the Persian Gulf.

In a Fox interview Rubio said he hopes to convince China to play a more active role in trying to convince Iran to walk away from what they are doing in the Gulf.

Trump is desperate to find a way out of the disaster.

There isn't much on the data agenda to shift around financial markets too much upon release.

Trump is in China so no doubt we'll get some headlines, 'BIG NEWS coming!", you know the sort of thing, Followed by a nothingburger. Perhaps the "outline of a concept of a plan" ... again, you know the sort of thing.