Daily Market Outlook, June 2, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute — Hormuz Headlines Still Trump Data

Yesterday afternoon’s spike in oil, US Treasury yields and the Dollar has mostly reversed, but the episode was a useful reminder that markets remain highly sensitive to every iteration of the US-Iran story. The move was triggered by headlines suggesting communications between Washington and Tehran had broken down. The subsequent partial reversal appears linked to reports that Trump pressured Israel to halt military action in Lebanon, which investors interpreted as a possible step toward restarting US-Iran negotiations. Trump also claimed that talks with Iran were proceeding “at a rapid pace,” even as the news flow remained difficult to reconcile. The market’s default baseline still seems to be that a deal is coming and that traffic through the Strait of Hormuz will eventually normalise. Brent’s fall of roughly 18%, from above $112/bbl in mid-May to just over $91/bbl at month-end, clearly reflects optimism that the worst of the energy shock may be passing. But the intraday price action suggests a more cautious outlook. Brent briefly moved close to $98/bbl yesterday and is around $94/bbl this morning, showing that energy markets are still vulnerable to headline tennis before any final agreement is signed and implemented.That is relevant for today’s calendar. US job openings data are important, especially in a market trying to understand whether the labour market is cooling quickly enough to change the Fed narrative. But there is a good chance that fresh US-Iran headlines dominate the tone more than JOLTS. In the current environment, the distinction between a softening labour market and a renewed inflation shock is crucial: the former would support duration and risk assets, while the latter keeps central banks cautious and the Dollar supported.

The Bank of England is approaching its communication blackout ahead of the June 18 decision, one week after the ECB’s meeting this cycle. MPC speakers appear keen to use the remaining window, especially Governor Bailey, who appears before the House of Lords Economic Affairs Committee today and also speaks on Thursday and Friday. His speech last Friday likely set the framework for what he will say this week: the BoE recognises that the UK is facing an unpleasant inflation-growth trade-off, but Bailey seems more willing than the hawks, and arguably more willing than the ECB, to look through the first-round effects of the energy shock. In the short run, the UK faces a difficult policy trade-off: inflation remains above target, while the economy is operating below potential. This creates an uncomfortable position for monetary policy, as the Bank of England cannot stabilise both inflation and activity simultaneously. In more straightforward conditions, the policy response would be clearer; in the current environment, the MPC must decide how to distribute the costs of the shock.The cost of the Hormuz energy spike cannot be avoided. The choice is whether to lean harder against inflation by tightening policy, accepting weaker output and employment, or to limit volatility in activity and accept a longer path back to the 2% CPI target. Bailey’s recent remarks suggest he is more open to the second route. In other words, he appears inclined to tolerate a slower return to target if the inflation impulse is primarily imported, energy-driven and not yet embedded in domestic wage and price-setting.That does not mean the BoE can ignore inflation. The key issue is whether first-round energy effects become second-round pressures through wages, expectations and corporate pricing. Friday’s Decision Maker Panel will therefore be important, especially if it shows inflation expectations and pay intentions diverging. If expectations remain contained and wage momentum softens, Bailey’s case for patience strengthens. If that does not happen, the hawks will argue that ignoring the shock jeopardises their credibility.

Today’s data mix reinforces the divergence between policy regimes. Euro area inflation is the key European release and will shape expectations for the ECB, which appears increasingly focused on credibility and on guarding against second-round effects. UK money and credit data will show how much tighter financial conditions are biting into private-sector behaviour. US JOLTS will be parsed for evidence that firms remain in a low-hire, low-fire mode rather than moving toward outright labour-market weakness. Markets still want to believe in a Hormuz deal, but the oil market is not trading as if the risk has disappeared. For central banks, the difference between a temporary energy shock and a persistent inflation impulse remains the defining question. Bailey looks prepared to look through the first round, while the ECB appears less comfortable doing so. But today, the most significant market-moving release may not be on the calendar — it may be the next headline from Washington, Tehran, or the Strait.

Overnight Headlines

• Eurozone Inflation Poised For Next Rise As ECB Preps Rate Hike

• US In Talks To Expand Nuclear Weapons Deployments In Europe

• Trump Says Iran Deal Could Happen Within A Week

• Trump Updates Tariffs On Steel, Aluminum And Copper Imports

• RBA’s Harper Worries Over ‘Uptick’ In Inflation Expectations

• Australia Raises Minimum Wage By 4.75%, Citing Uncertainty

• EU Poised To Give Budget Leeway To Cushion Energy Costs

• China Adds Data And AI To Trade Secret Rules To Block Leaks

• PBoC Cuts Cash Operation To Record Low As Bond Rally Deepens

• China’s Yuan Rises To Highest Level Against Basket Since 2022

• Japan’s FinMIn: Always Ready To Take Steps On FX As Needed

• Alphabet To Raise $80B In Equity Capital For AI Spending

• Nvidia CEO Says Capacity Exists To Support Robust AI Growth

• Anthropic’s First-Mover IPO Edge Set To Widen Lead Over OpenAI

• Blackstone Raises $13.1B For Latest Asia Buyout Fund

• SoftBank Overtakes Toyota To Become Japan’s Largest Company

• Arm Says ByteDance, Oracle Use Its Data Centre CPU Chips

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

• EUR/USD: 1.1850 (EU1.82b), 1.1750 (EU1.51b), 1.1700 (EU1.27b)

• USD/JPY: 160.00 ($1.59b), 159.00 ($413.9m), 161.00 ($381.4m)

• AUD/USD: 0.7130 (AUD540.9m), 0.7245 (AUD430.7m), 0.7190 (AUD370m)

• EUR/GBP: 0.8710 (EU939.6m)

• USD/BRL: 5.0000 ($768m), 5.2000 ($584.1m), 5.0300 ($420.5m)

• GBP/USD: 1.3470 (GBP477.3m)

• USD/CAD: 1.2755 ($340m), 1.4565 ($338.2m)

• USD/CNY: 6.8000 ($550m), 6.9000 ($496.4m), 6.8300 ($300.1m)

• USD/MXN: 17.00 ($470m), 17.56 ($438.5m), 16.99 ($435m)

• NZD/USD: 0.5767 (NZD445.2m), 0.5950 (NZD401.7m)

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 72.5k Target 69.3k