Week commencing
25 May 2026
Global markets head into the week balancing easing geopolitical risks with persistent inflation pressures, as key data from the US and China shape the outlook.
Markets rise as US–Iran tensions ease
United States (US) equity markets are poised to finish the week higher after a solid rebound in the second half. Renewed optimism around US–Iran peace talks helped ease geopolitical tensions and pushed oil prices lower, relieving pressure on both inflation expectations and risk assets.
The week that was: highlights
- The US National Association of Home Builders (NAHB) housing market index rose to 37 in May, beating expectations of 35 and marking the strongest reading since late last year
- Pending home sales climbed 1.4% month‑on‑month (MoM) in April, ahead of the 1.0% consensus forecast
- The Federal Open Market Committee (FOMC) minutes showed a majority of officials open to some policy firming if inflation remains sticky, though the overall tone was relatively balanced
- Initial jobless claims fell by 3000 to 209,000 for the week ending 9 May
- S&P Flash manufacturing purchasing managers’ index (PMI) surged to 55.3, above the 53.8 forecast and marking its strongest reading since May 2022
- Turning to China (CN), industrial production slowed more than expected to 4.1% year‑on‑year (YoY) in April, while retail sales rose just 0.2% YoY, well below the 2.0% consensus
- China’s new home prices across 70 cities fell 3.5% YoY in April, marking a 34th consecutive month of contraction
- Japan’s (JP) preliminary first‑quarter (Q1) gross domestic product (GDP) surprised to the upside, expanding at an annualised 2.1% rate versus the 1.7% expected
- Japan’s core inflation rate for April eased to 1.4% YoY from 1.8%
- West Texas Intermediate (WTI) crude oil fell 3.28% to $97.72
- The US dollar index (DXY) fell 0.05% to 99.22
- Bitcoin gained 0.06% to $77,460
- Gold fell 0.17% to $4532
- Wall Street’s gauge of fear, the volatility index (VIX), fell to 16.75 from 18.42 the previous week.
Key dates for the week ahead
China & Japan
- JP – Bank of Japan (BoJ) Governor Ueda speech: Wednesday, 27 May (time TBA)
- JP – Industrial production MoM preliminary: Friday, 29 May at 7.50am SGT
- CN – National Bureau of Statistics (NBS) manufacturing PMI: Sunday, 31 May at 9.30am SGT
- CN – NBS non‑manufacturing PMI: Sunday, 31 May at 9.30am SGT
United States
- US – Conference Board (CB) consumer confidence: Tuesday, 26 May at 10.00pm SGT
- US – Core personal consumption expenditures (PCE) price index: Thursday, 28 May at 8.30pm SGT
- US – Durable goods orders MoM: Thursday, 28 May at 8.30pm SGT
- US – GDP growth rate quarter‑on‑quarter (QoQ) (second estimate): Thursday, 28 May at 8.30pm SGT
- US – Initial jobless claims: Thursday, 28 May at 8.30pm SGT
- US – Personal income and spending MoM: Thursday, 28 May at 8.30pm SGT
Europe & United Kingdom
- EA – Economic sentiment: Thursday, 28 May at 5.00pm SGT
- UK – Nationwide house prices MoM and YoY: Friday, 29 May at 2.00pm SGT
Key events for the week ahead
US: core PCE price index
Date: Thursday, 28 May at 8.30pm SGT
Last month, the Federal Reserve’s (Fed) preferred inflation gauge – core PCE – rose to 3.2% YoY in March, the highest level since late 2023 and up from 3.0% the prior month.
At the last FOMC meeting in late April, the Fed kept rates unchanged but delivered its most divided vote since 1992. Governor Miran pushed for a rate cut, while several policymakers dissented hawkishly. The minutes showed a majority of officials open to some policy firming if inflation remains sticky, but the committee stopped short of a clear hawkish pivot.
Thursday’s April core PCE release will be one of the most important US data points of the week. With oil prices still elevated, consensus expects the reading to rise to 3.3% YoY. A stronger‑than‑expected print would increase the likelihood of a rate hike.
The US rates market is currently pricing in 23 bp of tightening by December.
US core PCE price index chart
CN: NBS manufacturing PMI
Date: Sunday, 31 May at 9.30am SGT
China’s official NBS manufacturing PMI inched down to 50.3 in April from March’s 12‑month high of 50.4 but still beat expectations of 50.1. It marked the second consecutive month of expansion, though at a noticeably softer pace. The slowdown was driven by the oil shock hitting energy‑intensive sectors, continued weakness in consumption, and further softening in the property market.
May’s reading will be closely watched for signs of whether the recent loss of momentum is stabilising or deepening. Consensus expects the index to print around the 50.3 – 50.5 level. A further softening would add to concerns around China’s uneven recovery, while a solid print would help stabilise the outlook. Investors will also be looking for early signs that the oil shock is beginning to fade and whether export strength in electric vehicles (EVs), machinery and technology products can continue to offset domestic weakness.
NBS manufacturing PMI chart
US: Q1 2026 earnings season
US Q1 2026 earnings season is in the home stretch, with reports scheduled from companies including CrowdStrike, Broadcom and C3.ai.
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