May consumer confidence data from the Conference Board was published the day before: the index declined from 93.8 points to 93.1 points, compared with the forecast of 91.9 points, amid growing household concerns over high inflation and worsening personal financial conditions. The greatest concern was expressed by families with annual incomes of 15.0–40.0 thousand dollars, as they were among the most affected by gasoline prices rising by more than 50.0% since the beginning of the Middle East crisis. An additional Conference Board survey showed that in May, two-thirds of consumers reported cutting spending, buying fewer goods, and postponing major purchases, reflecting growing uncertainty among households and increasing pressure on the economy, although it remains stable for now. Meanwhile, Federal Reserve Bank of Minneapolis President Neel Kashkari said that the Fed should focus on containing inflation risks, which appear to be rising, although it is still too early to predict when the regulator may next change interest rates.
Eurozone
The euro is strengthening against the yen, the pound, and the U.S. dollar. Today, the European Central Bank published its semiannual financial stability report. According to the document, the U.S.–Iran confrontation and persistent trade tensions could put significant pressure on eurozone economic growth, raise interest rates, and call into question the ability of some member states to maintain their current borrowing levels. ECB experts note that stock markets have largely ignored the Middle East conflict, which has left equities overvalued and corporate borrowing costs low, raising concerns about excessive confidence among traders. In addition, prolonged energy shocks could trigger a reassessment of financial stability and a sharp repricing in sovereign bond markets, increasing risks to the region’s financial system.
United Kingdom
The pound is weakening against the euro and the U.S. dollar but showing mixed dynamics against the yen.
According to a Worldpanel study, price growth in British grocery stores slowed to 3.1%, the lowest level since December 2024. The study also showed that chocolate products and fresh fish saw the fastest price increases, while butter and sugar confectionery became cheaper. Overall, households significantly reduced their purchase volumes and increasingly sought discounted goods, whose share rose from 28.4% to 30.3% over the past four weeks.
Japan
The yen is weakening against the euro and the U.S. dollar but showing mixed dynamics against the pound.
Today, Japan’s April corporate services price index was published, falling from 3.3% to 3.0% year-on-year, but remaining well above the Bank of Japan’s 2.0% target, which supports the case for further monetary tightening. Bank of Japan Governor Kazuo Ueda said that temporary energy shocks could become persistent if they negatively affect wages, consumer inflation expectations, and pricing behavior. He also recalled that the current fuel crisis is already the fifth for the country: during the first one in 1973, the consumer price index rose from 10.0% to 20.0% despite higher interest rates, while during the second crisis in 1979–1980, inflation remained more moderate because policymakers had already gained experience responding to extreme conditions.
Australia
The Australian dollar is strengthening against the pound and the yen but showing mixed dynamics against the U.S. dollar and the euro.
Investors and forex traders are focused on today’s April inflation data: the weighted average consumer price index declined from 4.60% to 4.20% year-on-year, compared with expectations of 4.40%, while the core indicator rose to 3.4%, its highest level since the end of 2024, still exceeding the Reserve Bank of Australia’s target range of 2.0–3.0%. This allows officials to continue tightening monetary policy, although interest rates have already been raised three times this year. Most experts expect at least one more adjustment to borrowing costs in December.
Oil
Oil prices continue to decline today under pressure from reports of progress in negotiations on a peace deal between the United States and Iran. Although politicians on both sides were quick to cool investor enthusiasm, saying that several disputed issues in the agreement remain unresolved, markets are still hoping for a quick settlement of the conflict.
Today at 22:30 (GMT+2), fuel inventory data from the American Petroleum Institute will be released. The previous report showed a 9.1 million barrel decline in crude oil inventories, and a continuation of this trend would support quotations and could lead to an upward reversal.
