Orange Juice decreased to 160.15 USd/Lbs, the lowest since March 2026. Over the past 4 weeks, Orange Juice lost 8.98%, and in the last 12 months, it decreased 35.91%.

Orange Juice Hits 8-week Low

Poland 10 Year Government Bond Yield increased to 6.04%, the highest since January 2025. Over the past 4 weeks, Poland 10Y Bond Yield gained 55.90 basis points, and in the last 12 months, it increased 45.70 basis points.

Poland 10Y Bond Yield Hits 16-month High

Tech stocks slipped and pressured US equity indices on Monday, extending their pullback from record highs, while high energy prices maintained risks of higher inflation. The S&P 500 and the Nasdaq dropped 0.3% and 1%, respectively, but the Dow was flat on strength for traditional sectors of the economy. AI infrastructure companies were sharply lower as lower risk sentiment and lingering skepticism on the magnitude of AI spending growth trimmed the sector's rally from this year. Micron, Applied Materials, and Sandisk dropped between 5% and 7%. Additionally, Seagate plunged 8% after its rhetoric from its management cast doubt on the sustainability of memory chip demand. Consistently, AI hyperscalers were lower with Tesla and Oracle dropping 3%. Also, Nvidia shares retreated 2% ahead of its earnings this week, seen as a bellwether for AI demand globally. Chevron, 3M, and Honeywell were sharply higher to support the Dow.

Tech Pressured US Stock Indices

Gold prices fell to the $4,550 per ounce mark on Monday, testing their lowest since late March as pro-inflationary forces backed the likelihood of a hawkish response by the Federal Reserve. The US and Iran maintained their stalemate over the weekend, prolonging the blockade of commercial vessels crossing the Strait of Hormuz to extend the global shortage of oil and refined fuel. Energy prices rose further to test their post-war peaks, adding to pre-inflationary risks and strengthening the argument for hawkish members in the Fed and other major central banks. Higher energy prices had already triggered a surge in producer prices in April, while consumer inflation rose to a three-year high. Restrictive interest rates lift bond yields and drive investors to favor fixed-income assets instead of coupon-less precious metals, pressuring bullion prices.

Gold Pares Rebound

Gasoline increased to 3.76 USD/Gal, the highest since June 2022. Over the past 4 weeks, Gasoline gained 20.64%, and in the last 12 months, it increased 75.58%.

Gasoline Hits Near 4-year High

European stocks closed mostly higher on Monday, trimming recent losses as markets further assessed the impact of ongoing macroeconomic headwinds on European earnings projections. The Eurozone's STOXX 50 inched higher to 5,832 and the STOXX 600 rose 0.3% to 609. The stalemate between the US and Iran was extended through the weekend and no side expressed urgency in pressing for opening the Strait of Hormuz for oil and goods exports. Consequently, energy prices held higher and European sovereign yields maintained their elevated levels. Financial services providers were steadily higher, trimming losses from last session with Allianz, Nordea, AXA, and Munich Re jumping over 1%. Also, Deutsche Boerse jumped 5% on reports that TCI increased its position on the exchange operator. On the other hand, ASML fell 3.2%, in line with a plunge in global AI infrastructure stocks.

European Stocks Inch Higher

The FTSE MIB Index fell 447 points or 0.91 percent on Monday to close at 48669 points. Leading the losses are Banca Monte dei Paschi di Siena (-7.89%), Infrastrutture Wire (-6.05%) and Nexi (-5.49%). Top gainers were Eni (2.04%), Telecom Italia (1.75%) and Mediobanca (1.61%).

The FTSE MIB Index Closes 0.91% Lower

The DAX Index gained 357 points or 1.49 percent on Monday to close at 24308 points. Gains were led by Deutsche Boerse (4.66%), Rheinmetall (4.16%) and Deutsche Telekom (4.01%).

The DAX Index Closes 1.49% Higher

The CAC 40 Index went up by 21 points or 0.26 percent on Monday to close at 7973 points. The rise was led by TP (6.26%), Publicis (5.24%) and Edenred (2.64%). On the downside, the weakerst performers were Legrand (-2.40%), Stellantis NV (-1.49%) and Schneider Electric (-1.42%).

The CAC 40 Index Closes 0.26% Higher

Cotton futures rose above 82 cents per pound, up from two-week lows of 80.6 cents per pound hit on May 15, supported by a weaker US dollar and elevated oil prices. At the same time, the White House said that China has committed to purchasing at least $17 billion worth of US agricultural products annually between 2026 and 2028, which boosted hopes for stronger export demand. The latest USDA's weekly export sales report signaled weakening demand. with sales falling 27.5% year-on-year to 47,699 bales and shipments dropping to an eight-week low of 290,293 bales. On the supply side, the market is closely watching US planting progress amid prolonged dry conditions in key producing states like Texas. US cotton production for 2026/27 is projected at 13.3 million bales, down 600,000 bales from 2025/26, according to the USDA’s May WASDE report. The same report also points to lower global production and ending stocks for 2026/27, alongside higher consumption, signaling tighter global supplies.

Cotton Futures Move Higher

The FTSE 100 Index rose 104 points or 1.02 percent on Monday to close at 10299 points. Leading the gains are WPP (5.38%), Pearson (3.50%) and Centrica (3.45%).

The FTSE 100 Index Closes 1.02% Higher

The FTSE MIB fell 0.9% to close at 48,669 on Monday, extending losses from the previous session amid broader risk-off sentiment across global markets. Investors remained focused on escalating Middle East tensions, with no clear signs of de-escalation as US President Donald Trump maintained a hardline stance toward Iran. The developments fueled inflation concerns and pushed bond yields higher. Heavyweight financial stocks led losses, including Intesa Sanpaolo (-2.5%), Generali (-2.8%), BPER Banca (-5.4%), and MPS (-7.9%). Deutsche Bank downgraded BPER Banca to “hold” from “buy,” while raising its target price for MPS and maintaining a “buy” rating. Luxury stocks also weakened amid higher risk aversion, with Ferrari and Moncler both down 0.9%. In contrast, Eni gained 2% on higher oil prices and Leonardo rose 1.9% as geopolitical tensions boosted defense-related shares.

FTSE MIB Extends Losses as Middle East Tensions Weigh

Cheese decreased to 1.65 USD/Lbs, the lowest since April 2026. Over the past 4 weeks, Cheese gained 0.27%, and in the last 12 months, it decreased 10.24%.

Cheese Hits 4-week Low

The FTSE 100 rose 1.1% on Monday, recovering from a 1.7% loss in the previous session as gains spread across most sectors, although investors remained focused on oil prices, geopolitics and inflation risks. Energy stocks led the advance with Shell and BP each rising more than 2% as crude strengthened following reports that the US rejected Iran’s latest peace proposal. Banks also moved higher, with HSBC, Lloyds Banking Group, Barclays and NatWest up between 0.5% and 1.2%. IAG gained more than 2% despite renewed cost warnings from Ryanair over fleet maintenance, wages and fuel. Mining stocks underperformed with Anglo American, Endeavour Mining and Antofagasta down more than 1% while Rio Tinto and Glencore also fell. Glencore said a Chilean court ruling on a desalination project would not immediately affect production at Collahuasi while Anglo American agreed to sell its steelmaking coal unit to Dhilmar for up to 3.875 billion dollars.

FTSE 100 Rebounds on Monday

The CAC 40 edged up 0.4% to close at 7,987 on Monday, recovering early losses as gains in energy and industrial shares supported the index. TotalEnergies rose 2% as the prolonged disruption linked to the closure of the Strait of Hormuz drove oil and gas prices sharply higher. Industrial stocks also advanced, with Airbus up 1.6% and Safran gaining 0.9%. Meanwhile, the financial sector traded mixed, with AXA rising 2.2% while BNP Paribas fell 1.4% amid concerns over energy-driven inflation. Luxury stocks rebounded after recent sharp losses linked to weak China retail sales, with Kering up 1.1%, Hermès gaining 0.3%, and both LVMH and L’Oréal edging higher.

CAC 40 Closes Higher as Energy Stocks Rally

The yield on the US 10-year Treasury note fluctuated around 4.6% on Monday, recovering from a brief pullback as traders continued to assess developments in the Middle East and persistent uncertainty over whether a US-Iran agreement can be reached in the near term. Iranian media reported that Washington had proposed a temporary waiver of oil sanctions until a final deal is reached but later Axios reported that Iran has given an updated proposal for a deal to end the war, but the White House believes it is not sufficient for a deal. The benchmark Treasury yield remained near one-year highs, supported by persistently elevated oil prices that continue to fuel global inflation pressures and constrain central banks’ ability to ease monetary policy. Markets currently expect the Fed to leave the fed funds rate unchanged through year-end, though the implied probability of an additional 25bps rate hike has risen to around 40%.

US Treasury Yields Reverse Early Decline

Brent crude oil futures climbed back toward $111 per barrel on Monday as uncertainty deepened over US Iran negotiations aimed at reopening the key Strait of Hormuz. Market sentiment shifted after doubts resurfaced about an imminent agreement to restore energy flows through the vital shipping route. According to Axios, Iran submitted an updated peace proposal to end the conflict, but the White House reportedly considers it insufficient for a deal. Iran’s Tasnim news agency said Tehran still views US conditions as overly demanding despite revisions in the latest draft, signalling that the deadlock over both the conflict and the Strait of Hormuz remains unresolved. Earlier optimism had been supported by reports that Washington proposed a temporary waiver on oil sanctions, though this has not been confirmed by US officials. Meanwhile, the International Energy Agency warned on Monday that global oil inventories are declining rapidly.

Brent Crude Bounces Back

WTI crude oil futures climbed back toward $107 per barrel on Monday as uncertainty deepened over US Iran negotiations aimed at reopening the key Strait of Hormuz. Market sentiment shifted after doubts resurfaced about an imminent agreement to restore energy flows through the vital shipping route. According to Axios, Iran submitted an updated peace proposal to end the conflict, but the White House reportedly considers it insufficient for a deal. Iran’s Tasnim news agency said Tehran still views US conditions as overly demanding despite revisions in the latest draft, signalling that the deadlock over both the conflict and the Strait of Hormuz remains unresolved. Earlier optimism had been supported by reports that Washington proposed a temporary waiver on oil sanctions, though this has not been confirmed by US officials. Meanwhile, the International Energy Agency warned on Monday that global oil inventories are declining rapidly.

Oil Rebounds

Sugar futures in the US eased to below 14.7 US cents, the lowest in over a week, pressured by expectations of robust Brazilian supply. According to StoneX, the Central-South region, the country's main sugarcane producing hub, is expected to register the second largest harvest in history in the 2026/27 season, which began in April, amid better weather conditions compared to last year. The consulting firm estimates a milling volume of 632.2 million tons, above the forecast released in March of 620.5 million tons, and also higher than the volume of the 2025/26 harvest, which was 621.9 million tons. However, projections of a global deficit for the 2026/27 crop and India's recent decision to ban sugar exports for at least four months amid supply concerns limited the downside. The market also remained attentive to the climate risks, including the El Nino phenomenon, and volatility of oil, which continues to directly impact the sugar and ethanol sector.

Sugar Futures at Over 1-Week Low

Both the STOXX 50 and STOXX 600 rose 0.8% on Monday, reversing earlier losses amid an improvement in risk sentiment and a decline in oil prices on tentative signs that US-Iran negotiations could resume. Iranian media reported that Washington had proposed a temporary waiver of oil sanctions, while separate reports suggested Tehran may be willing to accept a long-term freeze on its nuclear program. Traders also focused on a steady stream of corporate updates, with most sectors trading in positive territory. HSBC Holdings (+1.4%), Shell (+1.4%), Siemens (+0.9%), TotalEnergies (+1.1%) and SAP (+2.8%) booked strong gains. In contrast, ASML Holding fell 2.7% despite announcing a partnership with Tata Electronics aimed at supporting domestic semiconductor manufacturing in India. Novo Nordisk dropped almost 4%, while Ryanair rebounded to gain nearly 6% following its warning over weaker-than-expected summer pricing trends.

European Stocks Rebound

The South African rand strengthened to around 16.6 per USD, as fresh signs of progress in US-Iran negotiations improved risk appetite. Demand for the US dollar weakened while prices of key precious metals increased. Iranian media reported that Washington has proposed a temporary waiver on oil sanctions until a final agreement is reached, while separate reports suggest Tehran could accept a long-term freeze on its nuclear programme. Meanwhile, domestic investors are awaiting inflation data due on Wednesday to gauge potential inflationary pressures stemming from the Middle East conflict.

South African Rand Firms

The NAHB/Wells Fargo Housing Market Index in the US, which measures builder confidence in the market for newly built single-family homes, rose to 37 in May 2026 from 34 in April which was its lowest level since September 2025, and came in above forecasts of 35. The current sales conditions rose three points to 40. Sales expectations in the next six months increased three points to 45 and traffic of prospective buyers posted a three-point gain to 25. Also, 32% of builders cut prices in May, down from 36% in April. The average price reduction was 6%, up from the 5% figure in April.

US Homebuilder Sentiment Beats Forecasts

The dollar index fell to 99 on Monday, pulling back from the more than one-month highs reached last Friday, as fresh signs of progress in US-Iran negotiations improved investor sentiment. Iranian media reported that Washington had proposed a temporary waiver of oil sanctions until a final deal is reached, while separate reports suggested Tehran could accept a long-term freeze on its nuclear program. Still, the situation in the Middle East remains highly fragile and uncertain, with the Strait of Hormuz remaining mostly closed. As a result, oil prices continue to rise and are expected to stay elevated, adding to global inflationary pressures and limiting central banks’ scope to ease monetary policy. Markets currently expect the Fed to keep the fed funds rate unchanged through the end of the year, although the probability of an additional 25bps rate hike has increased to around 40%. The greenback weakened broadly, with the sharpest declines recorded against the British pound.

Dollar Index Retreats to 99

Silver erased earlier losses to jump to $78 an ounce on Monday, attempting to recover from a 12% weekly slump as investors focused on potential progress in resolving the Iran conflict. Despite US President Donald Trump’s calls for Iran to act quickly, unconfirmed reports suggested a possible breakthrough, with the US reportedly lifting sanctions on Iranian oil and Tehran agreeing to a long-term freeze of its nuclear program. The metal had come under pressure from a stronger US dollar and rising Treasury yields after hotter-than-expected US inflation data led investors to rule out Federal Reserve rate cuts this year, while fueling speculation of a possible rate hike before year-end. UBS strategists also slashed their full-year silver investment demand forecast to 300 million ounces from over 400 million ounces and projected the global silver market deficit to shrink significantly to around 60–70 million ounces, down from a previous estimate of roughly 300 million ounces.

Silver Rebounds to $78 on Iran Deal Hopes

Gold erased earlier losses to trade above $4,560 an ounce on Monday, trying to recover from a near 4% weekly drop as investors focused on potential progress in resolving the Iran conflict. Despite US President Donald Trump’s calls for Iran to act quickly, unconfirmed reports suggested a possible breakthrough, with the US reportedly lifting sanctions on Iranian oil and Tehran agreeing to a long-term freeze of its nuclear program. The precious metal had faced pressure from a stronger US dollar and rising Treasury yields after hotter-than-expected US inflation data led investors to rule out Federal Reserve rate cuts this year, while fueling speculation of a possible rate hike before year-end.

Gold Rebounds on Iran Deal Hopes

Industrial production in Belarus declined 2.5% year-on-year in the first four months of 2026, improving slightly from a 3.4% drop recorded in the January-March period. The electricity, gas, steam, hot water and air conditioning supply sector expanded 8.7%, while mining and quarrying grew 2.4%. Water supply, waste management and remediation activities also posted a modest 0.6% increase. However, manufacturing activity contracted 4.6%, offsetting gains in the other sectors and remaining the main drag on overall industrial output.

Belarus Industrial Decline Eases in January-April

The yield on the US 10-year Treasury note slipped below 4.59% on Monday amid fresh signs of progress in US-Iran negotiations. Iranian media reported that Washington had proposed a temporary waiver of oil sanctions pending a final agreement, while separate reports suggested Tehran could accept a long-term freeze on its nuclear program. Despite Monday’s pullback, benchmark Treasury yields remained near one-year highs, supported by persistently elevated oil prices that continue to fuel global inflation pressures and constrain central banks’ ability to ease monetary policy. In some cases, policymakers may even need to tighten further. Markets currently expect the Fed to leave the fed funds rate unchanged through year-end, though the implied probability of an additional 25bps rate hike has risen to around 40%. Investors also await the upcoming FOMC meeting minutes and flash US PMI data for further signals on the direction of monetary policy and the broader economic outlook.

Treasury Yields Ease

The Ibovespa edged down to trade below 177,000 on Monday as investors assessed economic activity data, domestic political developments, and stalled US-Iran peace discussions. Brazil’s IBC-Br economic activity index contracted more than markets had anticipated in March. Meanwhile, Brazil’s Federal Police are investigating payments made by Daniel Vorcaro to Flávio Bolsonaro and a possible transfer involving Eduardo Bolsonaro. The probe follows reports linking Senator Flávio Bolsonaro, viewed as President Lula’s main challenger in this year’s election, to Vorcaro, the former Banco Master owner charged with fraud. Abroad, Pakistan, acting as mediator, shared with the US a revised Iranian proposal aimed at ending the Middle East conflict, though negotiations remain stalled despite a fragile ceasefire. Banks traded lower, with Itaú and Bradesco edging down. WEG and Ambev both lost 0.5%. Vale slipped on lower iron ore prices, and Petrobras shed more than 1.5% as oil prices retreated.

Ibovespa Edges Lower as Investors Assess IBC-Br and Political Risks

Frankfurt's DAX 40 reversed early losses and rose 1.7% to surpass 24,300 on Monday, amid renewed hopes for a resolution to the Middle East conflict. Washington has reportedly proposed a temporary exemption from sanctions on Iranian oil exports, while Tehran has signaled it could accept a long-term freeze on its nuclear program but remains opposed to its full dismantlement. Iran is demanding sanctions relief as a condition for accepting a peace agreement and the reopening of the Strait of Hormuz, which remains largely blocked. Among key movers, Rheinmetall surged over 4% and led gains, after a buy recommendation from Citigroup. Infineon Technologies and Siemens Energy followed closely, rising 3.9% and 3.6%, respectively. On the flip side, Scout24 (-2.9%), Brenntag (-1.6%) were the biggest laggards.

DAX Turns Positive

Natural gas rose above 3, according to trading on a contract for difference (CFD).

Natural gas traded above 3 USD/MMBtu

US equities were mixed on Monday following the late pullback from records last week as macroeconomic headwinds offset the speculative rally in AI infrastructure companies this year. The S&P 500, Nasdaq, and Dow hovered around the flatline. The stalemate between Iran and the US maintained expectations of a prolonged suspension in energy exports from the Middle East, lifting bond yields and sustaining their broad-based pressure on equities. Consistently, the Federal Reserve is expected to maintain their rates at a restrictive territory in the coming meetings despite incoming-Chairman Warsh's preference for lower rates. AI hyperscalers, which track risk sentiment due to their speculative nature, were mixed with Tesla and Meta dropping over 1%, while Alphabet and Microsoft were 1% higher. In turn, AI infrastructure was mostly higher with Nvidia adding 0.5% ahead of its key earnings results this week.

US Stocks Start Week Muted

The Dow Jones Index fell 537 points or 1.07 percent on Friday to close at 49526 points. Leading the losses are Salesforce (-0.86%).

The Dow Jones Index Closes 1.07% Lower

The Baltic Exchange's dry bulk freight index, which monitors rates for ships carrying dry bulk commodities, was down for a second session on Monday, falling about 1.9% to a near one-week low of 3,092 points, amid weakness in the larger vessel segments. The capesize index, which typically transports 150,000-ton cargoes including iron ore and coal, slumped by 3.1% to 5,013 points; and the panamax index, which usually carries 60,000 to 70,000 tons of coal or grain, decreased by 0.4% to 2,511 points. On the other hand, the supramax index rose 0.3% to 1,570 points.

Baltic Dry Index Falls to Near 1-Week Low

The euro climbed to $1.165, attempting to recover from a one-month low of $1.161 reached earlier on Monday, following renewed optimism about a Middle East resolution, after reports that the US proposed a temporary waiver on Iran oil sanctions, with Tehran open to a long-term nuclear freeze but not a full dismantlement of its atomic program. Last week, the euro fell over 1% against the USD as the economic fallout from the Iran war and expectations of faster-than-expected ECB rate hikes darkened the growth outlook. Eurozone growth slowed to just 0.1% in Q1 2026, the weakest since Q2 2025, due to Middle East conflict-related energy supply constraints. Meanwhile, inflation jumped to 3% in April, the highest since September 2023 and well above the ECB’s 2% target. Investors now await the flash S&P Global PMI surveys due Thursday for further monetary policy signals. Markets have priced in three ECB rate hikes by year-end, with a 90% probability of the first move in June.

Euro Bounces Back as Middle East Hopes Rise

Russia posted a current account surplus of $12.2 billion in the first quarter of 2026, narrowing from the $18.4 billion surplus in the corresponding period of the previous year. It was the softest surplus since 2016, mostly due to a sharp reduction in net exports. The goods account surplus narrowed to $25.3 billion from $30.7 billion, as exports were slightly higher and imports jumped by 10% to $73 billion. The deterioration in Russia's industry and troubles in sourcing capital goods due to sanctions from the West increased the economy's dependence on imports from nonwestern countries. Meanwhile, the services account gap widened to $8.7 billion from $7.6 billion. Lastly, the gap on the primary and secondary income accounts narrowed marginally to $4.4 billion from $4.7 billion.

Russia Current Account Surplus Narrows

Brent crude oil futures fell to $107.8 per barrel on Monday after reports suggested Iran is open to a long-term nuclear freeze agreement, though not a full dismantling of its atomic program. Tehran is also reportedly seeking a gradual peace arrangement with the US and Israel and wants its enriched uranium transferred to Russia rather than the US. According to reports, Iran dropped demands for direct US financial compensation in favour of economic concessions and international guarantees that would allow Tehran to preserve political credibility. Iran’s Tasnim news agency said Washington proposed a temporary waiver on oil sanctions. President Trump warned on Sunday that the “clock is ticking” after Iranian drones targeted a nuclear power facility in the United Arab Emirates. Attacks on energy infrastructure across the Persian Gulf over the weekend, including another UAE nuclear site, continued to fuel concerns over regional stability and possible supply disruptions.

Brent Crude Oil Moves Down

WTI crude oil futures fell to $103.4 per barrel on Monday after reports suggested Iran is open to a long term nuclear freeze agreement, though not a full dismantling of its atomic program. Tehran is also reportedly seeking a gradual peace arrangement with the US and Israel and wants its enriched uranium transferred to Russia rather than the US. According to reports, Iran dropped demands for direct US financial compensation in favour of economic concessions and international guarantees that would allow Tehran to preserve political credibility. Iran’s Tasnim news agency said Washington proposed a temporary waiver on oil sanctions. President Trump warned on Sunday that the “clock is ticking” after Iranian drones targeted a nuclear power facility in the United Arab Emirates. Attacks on energy infrastructure across the Persian Gulf over the weekend, including another UAE nuclear site, continued to fuel concerns over regional stability and possible supply disruptions.

WTI Crude Falls

Germany’s 10-year Bund yield pulled back to 3.14% after hitting 3.19% on Monday, its highest level since May 2011, as oil prices fell, easing inflation concerns. The decline followed reports that the US proposed a temporary waiver on Iran oil sanctions, with Tehran willing to accept a long-term nuclear freeze but not a full dismantlement of its atomic program. The retreat comes after a sharp selloff in European bonds last week, as investors reassessed risks from inflation, elevated energy prices, political uncertainty, and rising fiscal pressures. Markets are increasingly adapting to a "higher-for-longer" interest rate environment, with investors now fully pricing in three European Central Bank rate hikes this year and assigning a 90% probability to the first increase in June. Attention now turns to Thursday’s flash S&P Global PMI surveys for further monetary policy clues.

German Bund Yields Retreat as Oil Prices Fall

Chile posted a current account surplus of $1.9 billion in Q1 2026, the largest since Q1 2008, compared to a deficit of $0.3 billion shortfall in the same period a year ago. The goods surplus picked up to $9.6 billion from $6.3 billion in Q1 2025, as exports (14.7%) rose much faster than imports (+2.9%). 
Export growth was mainly fueled by mining shipments, which expanded 22.8% driven by copper (notably concentrates and cathodes), lithium carbonate, and gold. At the same time, the secondary income balance shifted to a surplus of $0.3 billion from a deficit of $0.1 billion, supported by higher net transfers, as inflows linked to additional tax revenue collection exceeded remittance outflows abroad. Conversely, the services deficit increased to $2 billion from $1.9 billion, while the primary income shortfall rose to $6 billion from $4.6 billion, mainly driven by direct investment income, with net payments abroad totaling $5.2 billion.

Chile Posts Widest Current Account Surplus Since 2008

Chile’s economy contracted 0.5% year-on-year in the first quarter of 2026, missing forecasts of a 0.1% expansion. The weaker GDP performance was mainly driven by declines in agriculture and forestry, mining, manufacturing, and fishing, while personal services provided the main positive contribution. Agriculture and forestry activity fell 5.4%, largely due to lower fruit production, while mining contracted 3.1% amid weaker copper output caused by lower ore grades, adverse weather conditions, and maintenance shutdowns. Fishing activity plunged 18.6% due to lower fish landings. Manufacturing output declined 2.0%, mainly reflecting weaker food production tied to reduced fishing resources. In contrast, personal services grew 2.4%, supported by health and education services.

Chile Economy Unexpectedly Contracts in Q1

The pound climbed back to $1.34 on Monday, rebounding after a turbulent week that saw sterling drop over 2%, its steepest weekly fall since November 2024. This followed reports that the US proposed a temporary waiver on Iran oil sanctions, with Tehran open to a long-term nuclear freeze but not a full dismantlement of its atomic program. Despite the recovery, sterling remains under pressure due to political uncertainty, as investors assess the possibility of Andy Burnham, seen as the least market-friendly candidate for bond investors, entering the leadership race to challenge Prime Minister Keir Starmer. Markets are pricing in nearly three Bank of England rate hikes this year.

Sterling Tries to Recover but Political Risks Linger

UK 10-year gilt yields fell below 5.1% after oil prices declined following reports that the US proposed a temporary waiver on Iran oil sanctions, with Tehran willing to agree to a long-term nuclear freeze, though not a full dismantlement of its atomic program. The drop comes after a volatile week that saw gilt yields surge 26 basis points to 18-year highs, the largest jump since the first week of the Iran war, amid rising political uncertainty and inflationary pressures. Investors are weighing a potential leadership challenge to Prime Minister Keir Starmer from Andy Burnham, who is viewed as less favorable for bond markets. Inflation fears have also grown due to stalled US-Iran talks over reopening the Strait of Hormuz, with President Trump voicing increasing frustration. Markets still expect nearly three Bank of England rate hikes this year.

UK Gilt Yields Dip Below 5.1% as Oil Prices Retreat

Brazil’s IBC-Br economic activity index fell 0.7% month-on-month in March 2026, reversing a 0.6% increase in February and missing forecasts for a 0.2% decline. The services sector contracted 0.8% after expanding 0.3% in the previous month. Industrial activity and the agriculture and livestock sector both declined 0.2%, following gains of 1.2% and 0.2%, respectively, in February. The taxes index also fell 0.2% after rising 0.8% in the prior month. Excluding agriculture and livestock, the IBC-Br dropped 0.9% in March. On an annual basis, the index expanded 3.1%.

Brazil IBC-Br Falls More Than Expected in March

The New York Fed’s Services Business Activity Index climbed 8.2 points to -5.8 in May 2026, marking its highest reading since January 2025. While activity in the region’s service sector continued to contract, the decline eased significantly, according to respondents to the Federal Reserve Bank of New York’s Business Leaders Survey. The business climate index also improved modestly but remained deeply negative at -46.9, indicating that firms still viewed conditions as substantially worse than normal. Employment edged slightly higher during the month, while wage growth slowed noticeably. At the same time, supply availability continued to deteriorate. Inflationary pressures remained persistent, with firms reporting steep increases in input costs and still-elevated selling prices. Looking ahead, businesses expressed somewhat greater optimism about conditions over the next six months.

NY Fed Services Index Signals Slower Contraction in May

Brent crude futures rose above $111 per barrel on Monday before easing toward $102, after Iranian media reported that the US had proposed a temporary waiver on oil sanctions until a final agreement is reached. However, the geopolitical situation in the Middle East remains highly uncertain, with the Strait of Hormuz still largely shut and the Trump administration continuing to blockade Iranian ports. US President Trump posted on social media that “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!” Tehran stated on Monday that it is continuing dialogue with the US via Pakistan. Over the weekend, energy infrastructure across the Persian Gulf was also targeted, including a nuclear facility in the United Arab Emirates, further heightening concerns over regional stability.

Brent Crude Near $102

WTI crude futures rose above $108 per barrel on Monday before easing back toward $105, after Iranian media reported that the US had proposed a temporary waiver on oil sanctions until a final agreement is reached. However, the geopolitical situation in the Middle East remains highly uncertain, with the Strait of Hormuz still largely shut and the Trump administration continuing to blockade Iranian ports. US President Trump posted on social media that “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!” Tehran stated on Monday that it is continuing dialogue with the US via Pakistan. Over the weekend, energy infrastructure across the Persian Gulf was also targeted, including a nuclear facility in the United Arab Emirates, further heightening concerns over regional stability.

Oil Prices Pare Gains

Lithium carbonate prices in China were at CNY 191,000 per tonne, easing from the over two-year high of CNY 200,500 from May 13th as the surge in prices drove producers to restart mining activity. Mineral Resources will restart its Bald Hill lithium mine following an 18-month suspension, partially making up for lower output elsewhere. Zimbabwe had announced export quotas for lithium concentrates and a full export ban to start next year. Africa's top producer stated exports would be allowed for processed lithium to stimulate the investment in local processing. On the demand front, New data in top consumer China showed that new energy vehicles output, the top source of lithium demand due to their batteries, rose by 5.5% annually to 1.32 million units, while sales rose by 9.7% to 1.34 million units. Demand also remained supported by Chinese investment in power infrastructure, recently consolidated with Beijing stating it would double national EV charging capacity to 180 gigawatts by 2027.

Lithium Eases from 2-Year High

US equity futures were lower on Monday, extending the late pullback from record highs last week as macroeconomic headwinds offset the speculative rally in AI infrastructure companies this year. Contracts for the S&P 500, Nasdaq, and Dow were around 0.5% lower. The stalemate between Iran and the US maintained expectations of a prolonged suspension in energy exports from the Middle East, lifting bond yields and sustaining their broad-based pressure on equities. Consequently, the Federal Reserve is expected to maintain their rates at a restrictive territory in the coming meetings despite incoming-Chairman Warsh's preference for lower rates. AI hyperscalers, which track risk sentiment due to their speculative nature were mostly lower with Tesla, Meta, and Alphabet down around 1% premarket. AI infrastructure were mixed, with Nvidia trading higher ahead of its earnings results after Wednesday's close, while AMD and Broadcom were lower.

US Futures Pull Back

The dollar index was little changed at around 99.2 on Monday, hovering near its highest levels since early April, as inflation concerns continued to dominate market sentiment. Investors remain focused on the ongoing conflict in the Middle East, which shows no signs of easing, while the Strait of Hormuz is expected to remain closed for some time. As a result, oil prices continue to climb and are likely to stay elevated, adding further pressure to global inflation and limiting central banks’ ability to loosen monetary policy, with some potentially needing to tighten policy further instead. Markets currently expect the Fed to keep the fed funds rate unchanged through the end of the year, although the probability of a 25bps rate hike has risen to around 40%.

Dollar Little Changed to Kick Off the Week

India’s BSE Sensex clawed back early losses to close marginally up at 75,315 on Monday, mainly supported by a rebound in information technology stocks. However, sentiment remained fragile amid persistent geopolitical tensions linked to the Iran conflict and rising oil prices. US President Trump warned Tehran on Sunday that time was running out, while a drone attack on a UAE nuclear facility over the weekend sharply dimmed hopes of a near-term ceasefire. Tech Mahindra, Infosys, Bharti Airtel, Bajaj Finserv, Sun Pharmaceuticals and HCL Tech were among the top performers, rising between 1.2% and 4.4%. On the downside, Tata Steel dropped 3.2% to the bottom of the index, even after reporting strong fourth-quarter results, with significant margin expansion and improved cash generation. The stock was penalized by mixed brokerage commentary, with concerns around regulatory headwinds in Europe and delays in key overseas projects.

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