The Week in Markets
Brent crude slid to around $92, capping its biggest monthly decline since 2020 - down roughly 18% on the month - amid signs the US and Iran could be nearing a deal, with a reported 60-day ceasefire extension that would reopen the Strait of Hormuz. Yet the relief may prove fleeting. Chevron's CEO, Mike Wirth told Financial Times he expects renewed upward pressure into summer as 12-13mn barrels a day stay offline and buffers thin, while Adnoc says full flows will not return before 2027. Aviva Investors flagged how fast sentiment reverses - oil snapped back 4% mid-week on fresh strikes. CI Global Asset Management cautioned that energy risks to vulnerable emerging economies stay elevated if Hormuz remains shut through summer.
The Iran war whipsawed global bonds in May. The US 30-year yield spiked to about 5.2% on 20 May, its highest since 2007; UK 30-year gilts hit a 1998 high of 5.87% and some Japanese yields set records - before peace-talk progress and weak data pulled most back. The paths then split: US 10-year yields rose 6bp while German yields fell 6bp, as sticky inflation (PCE +3.8%), fiscal fears and doubts over new Fed chair Kevin Warsh weighed on Treasuries. Amundi noted the surge reflected a fatter risk premium, favouring shorter maturities; State Street Investment Management argued the ECB should hold in June as eurozone activity shrank at its fastest in two and a half years (see chart).
Sharp slowdown in Eurozone services sector - State Street IM
Source: State Street Investment Management
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The AI hardware trade powered Wall Street and Asia alike. The Philadelphia Semiconductor Index is up about 75% in 2026 - its best start since 1999 - adding over $5tn, while Micron Technology and SK hynix joined Samsung Semiconductor above $1tn as memory prices doubled and drove Korea's KOSPI to a record. NVIDIA's Jensen Huang called Taiwan "the epicentre of the AI revolution." Allianz Global Investors warned concentration has gone global - Taiwan has overtaken China as the biggest emerging-market weight, with semiconductors up about 30% as software fell. Invesco, meanwhile, highlighted Taiwan and Korea as the main Asian beneficiaries from continued strength in semiconductors, AI-related supply chains, and a recovery in memory chips.
Asia ex-mainland China tech exports to world (3-month annualized)
Source: Invesco
Gold ended a topsy-turvy week barely changed, masking violent swings. Bullion sank to a two-month low below $4,400 on Thursday - down 17% since February's war - as US strikes near Hormuz dimmed peace hopes and the Fed's Lisa Cook warned she would hike if inflation lingers. It then leapt 2% to $4,575 on Friday after Trump signalled a "final determination" on extending the ceasefire, dragging the dollar and yields lower. UBP - Union Bancaire Privée trimmed near-term forecasts, noting that markets have fully priced out Fed cuts, yet called the weakness "a pause" in gold's uptrend as central banks add about 800 tonnes this year. HSBC Asset Management stayed constructive on bullion's haven appeal.
The ECB warned this week that an AI investment boom increasingly financed by private credit poses a fresh systemic risk to the euro area - especially insurers and pension funds, the latter facing 5-6% asset losses in its stress scenario - comparing the $1.4tn US private-credit market to subprime in scale. GQG Partners likened today's market to @Nassim Taleb's complacent turkey: AI spending has shifted from cash to debt, making Big Tech an outsized presence in bond markets and raising the risk of a sharp repricing. Guggenheim Investments assessed the stress as real but manageable - 21% of tech loans now below 80 cents - calling it a repricing, not a systemic break.
📅 Monday, June 1, 2026
📅 Tuesday, June 2, 2026
📅 Wednesday, June 3, 2026
📅 Thursday, June 4, 2026
📅 Friday, June 5, 2026
Source: Bloomberg, All times GMT/UTC+1
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