Headlines regarding the war in the Middle East and progress in restoring energy exports from the region will continue to set the pace for global markets. Strong earnings for the world's largest companies clashed with the inflationary impact of the war, having both stock markets and sovereign yields reach their local peaks recently. Inflation and its impact on household earnings and spending will tested in the US with the income and outlays report, which features the PCE inflation gauge. Inflation will also be the focus in the Eurozone's largest economies and Australia. A busy week in Japan will see industrial production, retail sales, consumer confidence, and the unemployment rate. Meanwhile, the RBNZ and BoK will set interest rates, while Canada and Brazil will post their GDP.

Week Ahead - May 25th

Frankfurt's DAX 40 rose further to close about 1.2% firmer at 24,889 on Friday, the highest in over two weeks, driven largely by tech momentum and some hopes for a breakthrough in US-Iran talks. On the data front, German consumer sentiment improved slightly heading into June, defying expectations of a further decline, as did business sentiment, despite remaining near multi-year lows. Infineon Technologies led gains among stocks, surging over 7%. Deutsche Post (+3.9%) also saw strong buying after Deutsche Bank upgraded the stock to “buy” from “hold.”.

DAX Finishes at Over 2-Week High

The FTSE 100 closed about 0.2% up at 10,466 on Friday, the highest since April 22, supported by a degree of stabilization in global markets, while investors assessed the likelihood of a US-Iran agreement. Traders also mulled a bigger-than-expected drop in UK retail sales and higher-than-expected borrowing figures, which along with other data released this week, reduced expectations of a rate hike by the Bank of England. Among key movers, Games Workshop advanced nearly 8% to the top of the index after guiding for higher revenue and profit for the year to May, while expecting weaker licensing revenue. Other top gainers included Rightmove (7.3%), Croda International (4.3%), Metlen Energy & Metals (3.6%) and Rolls-Royce Holdings (3.4%). Convatec (-3.2%), BP (-2.5%) and Experian (-2%) were the biggest laggards. For the week, the index booked a 2.7% gain.

UK Stocks Settle at 1-Month High

The FTSE MIB Index gained 342 points or 0.70 percent on Friday to close at 49511 points. Gains were led by Avio (5.84%), STMicroelectronics (5.19%) and Stellantis N.V. (3.25%). Biggest losers were Saipem (-2.56%), Amplifon (-2.36%) and Eni (-2.08%).

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Week Ahead - May 25th

DAX Finishes at Over 2-Week High

UK Stocks Settle at 1-Month High

The FTSE MIB Index Closes 0.70% Higher