Market Navigator: SpaceX IPO, five central banks convene
15 Jun 2026

Last week's recap: US inflation heats up, ECB hikes, and Iran conflict eases

• Peace deal reached, Strait to reopen: Geopolitical tensions eased after the US cancelled planned strikes on Kharg Island. Washington and Tehran have agreed on a peace framework in principle, ending the US naval blockade and reopening the Strait of Hormuz, with a formal signing set for 19 June. Brent crude oil had already retreated 6% to below $90 last week ahead of the announcement.
• US inflation accelerates: Headline consumer price index (CPI) rose 0.5% month-on-month (MoM) in May, lifting the annual rate to 4.2% in line with consensus. Energy prices accounted for the bulk of the gain. Core CPI edged up to 2.9% year-on-year (YoY). Producer price index (PPI) surged 6.5% annually — the hottest reading since November 2022 — yet markets shrugged it off, a complacency that may prove costly if upstream pressures feed through to consumers.
• China's margin squeeze deepens: China's PPI jumped 3.9% YoY in May, its fastest pace since July 2022, driven by Iran war-related commodity costs and supply chain disruptions, while CPI inflation held at 1.2%. The widening gap between surging input costs and subdued consumer prices underscores manufacturers' inability to pass on costs amid weak domestic demand.
• ECB pivots back to tightening: The European Central Bank (ECB) raised its deposit facility rates by 25 basis points to 2.25% — its first hike since 2023 — citing Middle East war-driven inflation pressures, with staff projections now seeing headline inflation averaging 3.0% in 2026. Lagarde noted no second-round effects through wages have materialised yet but remains the key risk to monitor. No forward guidance was offered; policy remains data-dependent.

Markets in focus: SpaceX IPO debut and Hang Seng's five-week losing streak

SpaceX IPO sets record; Oracle and Adobe disappoint despite earnings beats

US equity markets posted a volatile week following the sharp sell-off on 5 June, with the CBOE Volatility Index (VIX) spiking to 23 before retreating to close at 18. The S&P 500 edged 0.6% higher, while the technology-heavy Nasdaq 100 gained 2.3% and the Dow Jones index advanced 0.7%.

The dominant story was SpaceX's historic market debut. The company raised $75 billion, making it the largest initial public offering (IPO) in history. Exceptional demand drove the deal to over four times oversubscribed, though limited IPO allocations left significant retail investor demand unmet, driving the share price up 19% on the first day of trading to close at $160.95. With Nasdaq, MSCI and FTSE all adjusting index inclusion rules, mechanical buying from passive funds tracking those indices is estimated at around $25 billion in the first three weeks given the low free float will constrain initial weightings. As the free float expands over time, index rebalancing could introduce rotation and liquidity risks for other mega-cap technology holdings.

On the earnings front, both Oracle and Adobe declined sharply despite beating consensus estimates. Oracle fell after announcing plans to raise a further $40 billion to finance its fiscal 2027 capital expenditure programme of $90–95 billion, following $55.7 billion already spent in fiscal 2026. Adobe's decline reflected an abrupt chief financial officer (CFO) departure and ongoing chief executive officer (CEO) transition rather than operational weakness. The stock set a fresh 52-week low even as the company raised its full-year guidance.

Following the sharp pullback on 5 June, the US Tech 100 index has found substantial support near 28,000 and is currently testing resistance from the 20-day moving average (MA) near 29,729. A sustained breakout above this level would provide the technical basis for the index to re-challenge the historic peak at 30,759.

Figure 1: US Tech 100 index daily price chart

Hang Seng posts fifth consecutive weekly loss, tests 24,000 support

The Hang Seng Index (HSI) fell 1.0% last week, extending its losing streak to five consecutive weeks. The market saw broad-based weakness, with only three sectors delivering positive performance — financials, communication services and consumer staples. Southbound flows via Stock Connect remained positive at HK$4.2 billion, though this masked significant redemptions from passive vehicles, with the Tracker Fund and the CSOP Hang Seng Tech exchange-traded fund (ETF) recording net outflows of HK$5.8 billion and HK$2.9 billion respectively, pointing to broad-based investor de-risking.

Among notable movers, Lenovo retreated 10% after media reports of plans for broad product price increases from July — its second round of hikes in 2026 — as escalating memory and component costs weighed on the margin outlook, despite the stock remaining up approximately 140% year-to-date.

Alibaba fell 10% after the Pentagon formally added it, alongside major technology companies including Baidu and BYD, to its expanded list of Chinese military entities on 8 June, raising the prospect of restrictions on US business relationships. This was compounded by ongoing investor concern over the profitability drag from Alibaba's aggressive AI capital deployment.

On the positive side, Longfor Group surged 12.5% following the disclosure of RMB 13.7 billion in contracted sales for the first five months of 2026, pointing to tentative signs of a broader property market recovery. Chow Tai Fook jumped 10.3% after reporting record profit attributable to shareholders of HK$9 billion, up 52% YoY, driven by elevated gold prices and strong margin expansion.

Technical momentum deteriorated further as the HSI tested a new local trough at 24,000 — its lowest level since July 2025. A failure to hold this support level opens the way towards the next psychological level at 23,000, with meaningful technical support unlikely to emerge until the 22,000–22,500 zone. Any recovery attempt will encounter resistance from the 20-day MA near 25,250.

Figure 2: Hang Seng Index daily price chart

Week ahead: Five central banks take centre stage amid China activity data

Five major central banks convene this week, though only the Bank of Japan (BoJ) is widely expected to act. Markets are pricing a 90% probability of a 25-basis-point hike, lifting the policy rate to 1.00%. The shift follows Governor Ueda's increasingly hawkish tone — he has cautioned that temporary energy price shocks risk becoming entrenched if they feed through to wages, inflation expectations and broader price-setting behaviour. The April meeting's three-to-six vote split, the most divided outcome since 2016, underscores that the pace of subsequent hikes remains contested. A hike unaccompanied by clear commitment to further tightening may still fall short of providing the yen with sustained support.

Chair Kevin Warsh makes his debut as the Federal Reserve (Fed) chair this week, with the policy rate widely expected to hold at 3.75%. Attention centres on whether Warsh signals independence from the White House and provides direction on the second-half rate path, where markets currently price a 60% probability of a hike. The Reserve Bank of Australia (RBA) and Bank of England (BoE) are also set to hold, with Australia's labour market and growth momentum having softened following three consecutive hikes earlier this year, and UK services inflation easing — potentially reflecting weakening consumer demand.

Separately, China's May activity data on Tuesday warrants close attention. April's broad-based miss — retail sales at a 40-month low of 0.2%, industrial output decelerating to 4.1%, and fixed-asset investment swinging to a 1.6% contraction — reflected compounding pressure from Iran war-driven input costs and chronically weak domestic demand. May consensus points to further deterioration, raising the stakes for a credible policy response from Beijing.

Figure 3: Policy rates in US, Australia, UK, Japan and Switzerland

Key macro events this week: BoJ, Fed, RBA and BoE rate decisions, and China activity data

(All times in GMT+8)

Tuesday 16 June 2026

• 10.00am — China industrial production YoY (May): previous 4.1%, consensus 4.2%
• 10.00am — China retail sales YoY (May): previous 0.2%, consensus 0%
• 10.00am — China fixed-asset investment (year-to-date) YoY (May): previous -1.6%, consensus -2%
• 11.00am — Japan BoJ interest rates decision: previous 0.75%, consensus 1%
• 12.30pm — Australia RBA interest rates decision: previous 4.35%, consensus 4.35%
• 8.30pm — US building permits preliminary (May): previous 1.423 million, consensus 1.41 million
• 8.30pm — US housing starts (May): previous 1.465 million, consensus 1.44 million

Wednesday 17 June 2026

• 7.50am — Japan trade balance (May): previous ¥301.9 billion, consensus ¥564.6 billion
• 2.00pm — UK inflation rate YoY (May): previous 2.8%, consensus 3%
• 8.30pm — US retail sales MoM (May): previous 0.5%, consensus 0.5%

Thursday 18 June 2026

• 2.00am — US Fed interest rates decision: previous 3.75%, consensus 3.75%
• 2.30am — US Fed press conference
• 2.00pm — UK unemployment rate (April): previous 5%, consensus 5%
• 7.00pm — UK BoE interest rates decision: previous 3.75%, consensus 3.75%

Friday 19 June 2026

• 7.30am — Japan core inflation rate YoY (May): previous 1.4%, consensus 1.4%
• 2.00pm — UK retail sales MoM (May): previous -1.3%, consensus 0.5%

_{Source: Trading Economics, Nasdaq, LSEG (as of 14 June 2026)}