Daily Market Outlook, June 1, 2026
Daily Market Outlook, June 1, 2026
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute — No News Is Good News, Until the Tankers Don’t Move
Markets are treating the lack of new Gulf headlines as a positive, but the underlying logistics are still far from normal. Trump had signalled that he would decide last Friday whether to extend the ceasefire, yet the weekend brought no clear announcement beyond political theatre and scattered military warnings. Defence Secretary Hegseth said the US could resume attacks if no satisfactory agreement is reached, while reports suggested US forces hit Iranian sites over the weekend. Iran claimed retaliation against an airbase linked to a US attack, and Kuwaiti defences intercepted missile and drone assaults. So the diplomatic silence is not the same as de-escalation. The Strait of Hormuz remains the key reality check. Shipping traffic is still extremely thin, with only eight vessels leaving on May 30, including just two tankers, compared with a pre-conflict daily average of around 136 vessels. That matters more than the tone of political briefings. Commodity analysts warn that by mid-June global oil inventories could fall to levels where actual shortages emerge, making time the critical variable. Yet Brent remains below $100/bbl, trading around $93.40 even after a 2.5% rise today. For now, markets are assigning value to the possibility of a deal, but the physical market is still signalling severe disruption.
Equities, meanwhile, are focused on AI. Asian markets have continued to ride the tech boom, with Korea’s main index up 28% in May, Taiwan up 15% and Japan’s Nikkei up 12%. Samsung Electronics rose 10% on Monday as it began shipping a new line of faster chips, while Computex in Taipei will keep the AI narrative in focus. Jensen Huang, the CEO of Nvidia, is expected to showcase new products in his keynote and include a major Taiwan investment announcement. With global investors still willing to pay for AI infrastructure exposure, the equity market can look through Gulf uncertainty as long as oil stays below the psychological $100 threshold. Korea’s trade data show just how powerful the AI cycle has become. Exports rose 53% y/y in May to nearly $88bn, with semiconductor exports up 169% and computer exports up 291%. That is not just an equity story; it is a macro story. The interesting part is that the Korean won remains near all-time lows, suggesting much of the country’s dollar earnings are not being recycled back into the domestic currency. If a significant share stays in dollars or goes into Treasuries, the AI export boom indirectly helps finance the US deficit. That is a useful reminder that the AI trade is not only lifting stocks — it is also reshaping global capital flows.
Europe’s inflation picture is more complicated than tomorrow’s May CPI is likely to show. Preliminary estimates from the region’s four largest economies point to a slower acceleration in Eurozone inflation, but that appears largely due to fiscal shielding from higher energy prices. Germany’s temporary support package cuts duties on petrol and diesel by around 17 cents per litre in May and June, offsetting roughly 70% of the fuel-cost increase caused by the Iran war. Italy and Spain have also implemented excise-duty and VAT reductions. These measures will dampen headline inflation in the near term, but they do not eliminate pipeline risks or second-round effects.That distinction matters for the ECB. Even moderate Governing Council members have argued that a quick reopening of Hormuz would not fully reverse the price pressures already generated by the war. The ECB is likely to see conditions as closer to the adverse scenario outlined in March than the milder baseline. That keeps a June rate hike probable, with a September follow-up still the central scenario if inflation risks remain elevated. A rebound in activity would not necessarily reduce the need to tighten; if anything, it would lower the growth-inflation trade-off and make it easier for the ECB to prioritise credibility and return inflation to target.
The data calendar picks up meaningfully this week. Final May PMIs are due globally, with manufacturing on Monday and services and composite releases on Wednesday. In the Eurozone, money supply, unemployment and ECB inflation expectations arrive Monday, followed by preliminary CPI on Tuesday, PPI on Wednesday, retail sales on Thursday and the third estimate of Q1 GDP on Friday. Lagarde speaks Thursday, the final major ECB appearance before the quiet period. The UK calendar is lighter but still relevant. Money and credit data on Tuesday will show whether tighter financial conditions are feeding into borrowing behaviour, while Friday’s BoE Decision Maker Panel will be watched closely for the divergence between inflation expectations and pay intentions. Bailey appears before the House of Lords Economic Affairs Committee on Tuesday and speaks again Thursday and Friday, with Greene and Dhingra also on the schedule. The MPC is likely to keep stressing patience, but wage and expectations data will decide how much room it really has.
In the US, the focus is labour. ISM manufacturing starts the week, followed by JOLTS on Tuesday, ADP, factory orders, ISM services and the Beige Book on Wednesday, then Challenger job cuts on Thursday and non-farm payrolls on Friday. Consensus looks for payroll growth of around 93k, softer than last month’s 115k but still above the estimated breakeven range of 30k–70k. The unemployment rate is expected to hold at 4.3%, although risks may be lower if payroll gains show up in the household survey. A stabilisation in participation would also be welcome after recent declines.
Markets are leaning into a “no news is good news” interpretation of Gulf diplomacy, but shipping flows suggest the physical shock is not over. AI is powerful enough to keep Asian equities surging, and falling headline inflation in Europe may soothe nerves temporarily. But if Hormuz traffic does not normalise before inventories tighten, oil can quickly reclaim the macro narrative. For now, the rally is intact — but it rests on a ceasefire that has yet to become a functioning supply chain.
Overnight Headlines
ECB’s Schnabel Sees Risk Of Unanchored Inflation Views From War
Bond Trader Bets On Fed Hike Poised For Gut Check From Jobs Data
Kevin Warsh Wants The Fed To Think About Inflation Differently
Powell Says Fed Credibility Lost If President Can Fire Officials
US, Iran Trade Drafts Of Deal As Israel Expands Lebanon Assault
Oil Climbs As US-Iran Ceasefire Remains Elusive
US Military Is Quietly Guiding Ships Through The Strait Of Hormuz
China Manufacturing Activity Stays Flat In May As Energy Costs Weigh
China’s Private Factory Activity Gauge Slows As Economy Softens
Japanese Firms Cut Investment As War In Iran Clouded Outlook
Yen Defies Record Intervention As Wait For BoJ Hike Raises Risks
South Korea Export Growth Hits Four-Decade High On AI Chip Boom
SoftBank Plans $88B AI Data Hub In France As It Expands Beyond US
US Takes Step To Halt Nvidia Shipments To Chinese Firms Outside China
SoftBank Set To Dethrone Toyota As Japan’s Most Valuable Company
SpaceX’s IPO Forces Wall Street To Reorganise Around It
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)
EUR/USD: 1.1700 (EU1.12b), 1.2070 (EU977.6m), 1.1975 (EU918.6m)USD/JPY: 156.50 ($875m), 159.27 ($650.2m), 159.25 ($586.7m)
AUD/USD: 0.7200 (AUD625m), 0.7350 (AUD498m), 0.7550 (AUD419.9m)
GBP/USD: 1.3425 (GBP649.2m), 1.3150 (GBP631.4m), 1.3450 (GBP618.8m)
USD/CNY: 6.7670 ($600m), 6.7550 ($600m), 6.8130 ($405.5m)
USD/CAD: 1.3790 ($784.5m), 1.3450 ($480m), 1.3700 ($324.1m)
USD/KRW: 1440.00 ($360m)
NZD/USD: 0.5900 (NZD301.7m)
CFTC Positions as of May 29, 2026:
Speculators have been busy adjusting their positions across various Treasury futures. The net short position for CBOT US 5-year Treasury futures has been reduced by 27,389 contracts, now sitting at 1,323,127. Similarly, the CBOT US 10-year Treasury futures saw a trim of 60,098 contracts, bringing its net short position down to 787,954. In a more significant shift, the CBOT US 2-year Treasury futures net short position decreased by a hefty 305,591 contracts, now totaling 1,255,246.
On the flip side, the CBOT US UltraBond Treasury futures saw an uptick in their net short position, increasing by 5,378 contracts to reach 259,842. Additionally, there’s been a rise in the net short position for CBOT US Treasury bonds futures, which climbed by 20,577 contracts to hit 199,251.
Turning to equities, equity fund speculators have ramped up their net short position in the S&P 500 CME by 63,334 contracts, now totaling 447,470. However, equity fund managers are taking a different approach by increasing their net long position in the S&P 500 CME by 3,488 contracts, bringing it to an impressive 1,009,014.
In the cryptocurrency realm, Bitcoin maintains a net long position of 2,282 contracts.
The foreign exchange market shows some interesting dynamics: the Swiss franc has a net short position of -35,140 contracts, while the British pound is even deeper in the red with a net short of -61,398 contracts. The Euro is faring better with a net long position of 29,426 contracts, but the Japanese yen is struggling with a significant net short position of -114,667 contracts.
Technical & Trade Views
SP500
Daily VWAP Bullish
Weekly VWAP Bullish
Above 7559 Target 7700
Below 7500 Target 7400
DXY
Daily VWAP Bearish
Weekly VWAP Bullish
Above 98.50 Target 99.50
Below 98.20 Target 96.12
EURUSD
Daily VWAP Bullish
Weekly VWAP Bearish
Above 1.1710 Target 1.18
Below 1.1680 Target 1.1550
GBPUSD
Daily VWAP Bullish
Weekly VWAP Bearish
Above 1.3465 Target 1.3525
Below 1.3425 Target 1.3350
USDJPY
Daily VWAP Bullish
Weekly VWAP Bullish
Above 160 Target 161
Below 159.50 Target 157.50
XAUUSD
Daily VWAP Bullish
Weekly VWAP Bearish
Above 4700 Target 4800
Below 4500 Target 4386
BTCUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 75k Target 80k
Below 74k Target 71kto its target
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!