Asia Market Quick Take – 20 May, 2026

Asia Market Quick Take – 20 May, 2026 

Key points:  

• Macro: Trump warns of strikes if talks with Gulf nations fail 
• Equities: US futures slides as yields climb and Trump threatens Iran 
• FX: USD strengthens as yields climb higher 
• Commodities: Metals fall across the board; WTI remains above $100 
• Fixed income: US 30Y yields reach highest since July 2007 

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Disclaimer: Past performance does not indicate future performance.  

 Macro:  

• Philadelphia Fed President Anna Paulson supports holding rates steady, calling policy mildly restrictive and effective at containing inflation while the labor market stays solid. She said it’s healthy for markets to expect a long hold and even consider more tightening. Yield moves are being driven by real rates, and consumers are stretched but not cutting back overall.
• Trump warned US strikes on Iran could resume within days if talks with Gulf nations fail, adding to market volatility.
• US pending home sales rose 1.4% in April, a third straight gain and above the 1% forecast. Sales were up 3.2% year-over-year, with increases in the Northeast, Midwest, and West. NAR’s Lawrence Yun said buyers are cautiously returning despite higher mortgage rates and warned that without more housing supply, prices could outpace wages and hurt homeownership.
• Canada’s headline inflation rose to 2.8% in April from 2.4%, a two-year high but below the 3.1% forecast, mainly on a 19.2% jump in energy that lifted transportation inflation to 7.6%. BoC’s trimmed-mean and median core measures fell to 2.0% and 2.1%, their lowest in five years. Food inflation eased to 3.5%, and shelter edged up to 1.8%.
• The UN cut its 2026 global growth forecast to 2.5%, 0.2 ppts below January’s view and under the estimated 3.0% in 2025, citing inflation from the Middle East conflict. Strong labor markets, resilient demand, and AI-driven trade and investment provide some support, but the outlook stays weak. Energy price gains are boosting producers while pressuring households and firms. The US is seen growing 2.0% in 2026.

Equities:  

• US – US equity indexes slid on Tuesday as the 30-year Treasury yield rose to a two-decade high amid bets favoring higher interest rates and President Trump's threat to Iran. The Nasdaq Composite fell 0.8% to 25,870.71, with the S&P 500 down 0.7% to 7,353.61 and the Dow Jones Industrial Average lower by 0.7% to 49,363.88 at the close. Materials, communication services, and consumer discretionary sectors led declines. Home Depot gained 0.7% after posting first-quarter earnings that beat analysts' estimates with revenue rising 4.8% to $41.8 billion. ServiceNow surged after strong results. Alphabet declined 2.3%, contributing the most to the S&P 500 index decline. Vertiv Holdings fell 13% over two days, the most since April 2025.
• EU – European stocks rose for a second day, with the Stoxx 600 index gaining 0.2% by the close. Evolution AB jumped 7% after the Swedish online gambling company approved a €2 billion share buyback. Currys Plc rose 15%, the most since September 2025, after the electrical products retailer increased its full-year profit guidance. IG Group Holdings Plc surged 10.5% after beating expectations and raising its outlook. SAP rallied 6.0%, leading gains. Germany's DAX index rose 0.38% to 24,400.65. Poland's KGHM led a selloff in European mining stocks, sliding 5% to 322.60 zloty as a rise in US Treasury yields hit silver and gold prices.
• Asia – Asian stocks dropped for a third session as a lack of clarity over an Iran peace deal and elevated global bond yields weighed on risk sentiment. South Korea's Kospi Index was one of the worst performers, tumbling 3.3% to close at 7,271.66 as rising bond yields dulled the appeal of growth stocks like chipmakers. The Kosdaq declined 2.4% to close at 1,084.36. Samsung Electronics and its largest labor union managed to narrow some differences in their fresh talks that resumed Monday. Japan's benchmark Nikkei 225 lost 0.4% to finish at 60,550.59, erasing initial gains after the government reported that the economy grew for the second straight quarter in January-March, mainly due to better than expected consumer spending. Hong Kong's Hang Seng and Singapore's STI also traded under pressure amid the broader regional selloff.

Earnings this week: 

• Wednesday — Tokio Marine; Nvidia; Analog Devices; TJX; Intuit; Experian; Lowe’s; Target 
• Thursday — NetEase; Singtel; NIO; Walmart; Deere; Take-Two Interactive; Workday 

FX: 

• USD strengthened to a six-week high against G-10 currencies as renewed inflation fears pushed US yields sharply higher and shifting trader focus toward 5.5% as the next key level. The Bloomberg Dollar Spot Index gained as much as 0.5% intraday before easing.
• USDJPY climbed to its strongest since Japan’s April 30 intervention, while intervention risk kept demand for options hedges elevated. 
• AUD slid to a one-month low after the RBA signalled caution amid higher fuel costs.
• GBP and EUR weakened, with UK data showing the steepest job losses since the pandemic. CAD also softened after cooler core inflation, lifting USDCAD modestly.
• The yuan declined both onshore and offshore, weakening past the 6.8 key level. USDCNH rose 0.25% to 6.8166.

Commodities: 

• Gold and silver slumped as Treasury yields rose on inflation concerns. Comex gold for May delivery lost $46.20 per troy ounce, or 1.01%, to $4,506.30, marking its fourth consecutive session decline and the lowest settlement value since Friday, March 27, 2026.
• Copper prices fell with LME 3-month copper closing $176 lower at $13,411 a ton. Chile lowered its production forecasts for this year and next, with Chilean production expected to fall 2% to 5.3 million metric tons this year, weighed down by lower ore grades, maintenance and operational constraints. Chile lifted its 2026 copper price forecast to $5.55 per pound.
• Crude oil futures remained above $100 per barrel amid ongoing uncertainty about the Iran war. The American Petroleum Institute reported US crude inventories fell 9.1 million barrels last week, with Cushing stockpiles down 1.4 million barrels, gasoline down 5.8 million barrels, and distillate down 1.0 million barrels. WTI's July contract traded at $104.09 per barrel.

Fixed income:  

• The 30-year Treasury yield rose to 5.20%, the highest level since July 2007, as investor concerns mounted that accelerating inflation will force central bankers to raise interest rates. The yield rose 0.034 percentage point to 5.180% by the close, marking its third consecutive day of gains and largest three-day yield gain since Wednesday, May 21, 2025.
• A series of large sales in US Treasury futures exacerbated the selloff in the $31 trillion government debt market. A wave of block sales in both 5-year and 10-year note futures added to the pressure during a manic hour of trading in the US morning session.
• Australian and New Zealand bonds tracked Treasuries lower on mounting bets that oil-driven cost pressures will prompt the Federal Reserve to raise interest rates. The implied yield on Australia's 3-year note futures added 3 basis points to 4.71% in the overnight session, while that on 10-year bond futures lifted 4 basis points to 5.12%. The yield on New Zealand's 2-year note rose 3 basis points to 3.69%, while that on the 10-year bond advanced 6 basis points to 4.80%.

For a global look at markets – go to Inspiration.  

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