Global crude oil prices continued to decline. The AUD/USD exchange rate hit an 11‑week low

On Monday, the US stock indices closed mixed amid a balance between sell‑offs in the technology sector and geopolitical optimism. By the end of the day, the Dow Jones Index (US30) rose by 0.29%. The S&P 500 Index (US500) fell by 0.37%. The Technology Index NASDAQ (US100) closed lower by 0.19%. The tech sector declined due to investor concerns over rising capital expenditures on artificial intelligence, which led to a drop in Alphabet shares by 5.2%, Palantir by 7%, Amazon by 4.4%, and Meta by 2.7%. Additional pressure on the market came from a 16.4% low plunge in SpaceX shares after the announcement of a debut $20 billion bond issuance, although the stock price still remains 40% above its recent June IPO level.

In May 2026, Canada’s annual inflation rate accelerated to 3.2% from April’s 2.8%, exceeding the analysts’ consensus expect of 3.0% and reaching its highest level since December 2023. The main driver of price growth was the energy sector: amid the Middle East conflict and the suspension of oil exports, gasoline prices surged by 33.2% year‑over‑year, while overall energy costs rose by 9.0%. Despite the jump in the headline figure, core inflationary pressure remains fully under the control of the Bank of Canada. The regulator’s key indicators – CPI‑trim and CPI‑median – remained stable at their target levels of 2.0% and 2.1%, respectively.

European indices mostly rose yesterday. By the end of the day, Germany’s DAX (DE40) increased by 0.62%, France’s CAC 40 (FR40) closed down by 0.25%, Spain’s IBEX 35 (ES35) gained 1.01%, and the UK’s FTSE 100 (UK100) ended the session higher by 0.72%. A powerful trigger for investor optimism was Iran’s statement about significant progress in negotiations with the United States and the signing of a memorandum of understanding on a permanent peace agreement, which sharply reduced the risk of oil supply disruptions and eased global inflation concerns. The banking sector became the locomotive of the market rally: shares of Santander, BBVA, and Nordea rose by about 2% due to falling Eurozone sovereign bond yields, which improved lending margin prospects. The technology sector saw another investment boom, with shares of chipmaker Infineon jumping 5%, supporting the broader trend of hyperscale companies attracting capital for artificial intelligence infrastructure.

On Monday, global crude oil prices (WTI) continued to fall, hitting their lowest level since early March – US WTI dropped below $74 per barrel. The main driver of the sell‑off was news that the US and Iran had agreed on a “roadmap” to reach a peace agreement within 60 days, supported by the US Treasury’s decision to temporarily allow the extraction, supply, and sale of Iranian oil. Expectations of a rapid increase in supply are confirmed by real‑time data: shipping volumes through the Strait of Hormuz have risen noticeably, and Iran has increased visible exports through this route to the highest level since the start of the conflict, while offering discounts on cargoes for China.

The US natural gas price (XNG) corrected downward to $3.23 per MMBtu after a local rally to two‑week highs. The main factor behind the decline was the continued comfortable surplus in the domestic market, supported by the fact that commercial gas inventories in underground storage remain 5.8% above the long‑term seasonal norm.

On Monday, palladium prices (XPD) held near $1,270 per ounce, trading close to their lowest levels since late September amid a decline in geopolitical risk premiums. Progress in US-Iran negotiations and preparations to lift the naval blockade in the Strait of Hormuz significantly eased investor fears about supply disruptions. An additional negative factor for palladium is the deterioration of its fundamental market conditions. After 14 years of persistent deficits, analysts now expect the platinum‑group metals market to shift into surplus in 2026 due to declining investment demand and reduced ETF activity. The situation is further aggravated by long‑term structural changes in China’s automotive sector, where the rapid growth of electric vehicle adoption is undermining palladium consumption, traditionally used in catalytic converters for internal combustion engines.

On Friday, Japan’s Nikkei 225 (JP225) rose by 1.55%, China’s FTSE China A50 closed higher by 2.04%, Hong Kong’s Hang Seng (HK50) fell by 0.65%, and Australia’s ASX 200 (AU200) closed lower by 0.14%.

The Australian dollar fell below the psychological level of 0.70, hitting an eleven‑week low. The main factor behind the weakening of the “Aussie” was the powerful global rally of the US dollar, fueled by hawkish signals from the Federal Reserve and expectations of further rate hikes in the United States. Investors have taken a wait‑and‑see approach ahead of the release of critically important national macroeconomic data that will determine the next steps of the Reserve Bank of Australia (RBA). The May report is expected to show an acceleration in headline inflation to 4.4% (from 4.2%) and core inflation to 3.5% (from 3.4%), significantly exceeding the regulator’s 2-3% target range. Traders are also focused on labor market data: the consensus prediction expects a net job gain of 25,000 and a decline in unemployment to 4.4% after last month’s multi‑year high of 4.5%. Given that the RBA already raised the rate to 4.35% at its May meeting, strong macro data this week may force the regulator to proceed with new rounds of rate hikes in 2026, potentially triggering a sharp reversal and recovery in the AUD exchange rate.