Asia Market Quick Take – 18 May, 2026

Asia Market Quick Take – 18 May, 2026

Key points:

• Macro: China agreed to buy at least $17 billion of US agricultural products
• Equities: S&P 500 fell 1.24%; Nasdaq 100 –1.5% as yields rise
• FX: Sterling fell 2.3% last week, the most since November 2024
• Commodities: Brent crude extends gains after +8% last week; gold falls below $4,500
• Fixed income: US 30-year yields neared two-decade highs above 5%, while gilts tumbled

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Disclaimer: Past performance does not indicate future performance.

Macro:

• China agreed to purchase at least $17 billion in US agricultural products annually through 2028, in addition to soybean commitments already agreed to, following President Trump's visit to Beijing.
• The US and Iran remained far apart on a deal to end weeks of war and reopen the crucial Strait of Hormuz, with President Trump saying the clock is ticking for Iran.
• A drone attack sparked a fire at a United Arab Emirates nuclear plant, underscoring the fragility of the ceasefire.
• Fed minutes due this week will be watched for signs of whether prospects of an interest rate hike are building given elevated energy prices.
• The Bank of Japan is likely to raise interest rates by 25 basis points twice this year to better control inflation, according to Carlyle Japan co-head.

Equities: 

• US: The S&P 500 fell the most since March on Friday as a global bond selloff drove 10-year Treasury yields above 4.5%. The index declined 1.2% while the Nasdaq 100 fell 1.5% and the Dow Jones Industrial Average dropped 1.1%. Tech stocks faced headwinds after the Philadelphia Semiconductor Index dropped 4% Friday, its worst loss since March. US stock futures declined more than 0.4% Sunday evening as prospects for an end to the Iran war remained clouded while concerns rose over tighter monetary policy. NextEra was said to be nearing a record $66 billion deal for Dominion Energy, with a mostly stock deal potentially announced as soon as Monday. Bill Ackman's Pershing Square took a new 5.65 million share stake in Microsoft during the first quarter.
• EU: The Stoxx Europe 600 fell 0.9% across the five days ending May 16 as Brent crude climbed to $109 and hotter-than-expected US inflation and political instability in the UK sent bond yields higher. European equities showed pockets of resilience but the macro backdrop continued to set the terms of trade, with questions re-emerging over whether the energy shock would lead to stagflation. Standard Chartered appointed Manus Costello as its new chief financial officer, ending a monthslong search. Publicis agreed to acquire LiveRamp for a total enterprise value of $2.2 billion. France signaled there is no taboo against possible exceptional taxes on TotalEnergies even though the government prefers sticking to a fuel-price cap for now.
• Asia: Asian stocks were poised to fall Monday as elevated oil prices fueled inflation concerns and Treasury futures slipped. The Hang Seng Index fell 1.6 percent to 25,962.73 on Friday, with Alibaba contributing the most to the index decline by decreasing 4.1 percent. The index fell 1.63 percent for the week, its largest weekly decline since early March. The Nikkei 225 rose 0.8 percent on Wednesday to 63,272.11, striking a fresh all-time high on strong earnings. However, Asian stock markets retreated Friday as traders weighed geopolitical concerns and inflation. Seoul's Kospi index declined 6 percent on Friday, including an 8.6 percent tumble in Samsung Electronics shares after reports of a possible work stoppage. The Straits Times Index lost 0.1 percent to finish at 4,989.08 on Friday. The CSI 300 Index has fallen 2.8 percent since President Trump started his visit to Beijing on Wednesday.

Earnings this week:

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

FX:

• The dollar wrapped up its best week since early March on Friday, advancing against all peers in the G10, with the Bloomberg Dollar Spot Index up 0.4 percent.
• The New Zealand and Australian dollars were the worst performers in the G-10 on Friday, with NZDUSD dropping 2.2% last week, the biggest weekly drop since February 2025, while AUDUSD fell 1.3%.
• USDJPY rose 1.3% last week and was quoted less than 0.1% lower at 158.60 in early Sydney trading, approaching the 159 level and raising the risk of intervention.
• GBPUSD fell as much as 0.7% to 1.3315, the lowest since 8 April; sterling is down 2.3% this week, the most since November 2024.
• EURUSD dropped as much as 0.45% to 1.1617, the lowest since 8 April.
• The Norwegian krone has become the best performing G10 currency year to date, up 8.34% against the US dollar, trading at 9.31.
• The Swedish krona has become the worst performing G10 currency year to date, down 2.51% against the US dollar, trading at 9.45.

Commodities:

• Brent crude rose more than 1 percent to above $110.50 a barrel, after adding almost 8 percent last week, as the US and Iran remained deadlocked. WTI rose above $107.
• Gold held a decline around $4,540 an ounce after retreating almost 4 percent last week, weighed by a lack of progress in reopening the Strait of Hormuz that continued to fan inflation concerns and sent bond markets tumbling.
• Hong Kong Exchanges and Clearing will soon announce details of a new gold futures contract design as the bourse has been actively working to restart gold futures trading in response to global demand for the metal and competition from Singapore.

Fixed income:

• The 10-year JGB yield jumped 10 basis points at the open to 2.8 percent, showing no letup in the global bond rout that accelerated last week, with long-maturity bond yields in Japan hitting multi-year highs.
• Australian bonds extended their selloff with the yield on the 3-year note rising 2 basis points to 4.75 percent and the 10-year bond gaining 5 basis points to 5.12 percent as rising oil prices fueled inflation concerns.
• Gilts tumbled after Manchester Mayor Andy Burnham secured a pathway to potentially challenge Prime Minister Keir Starmer, heightening political uncertainty and fuelling investor concerns over more expansive fiscal policy.
• Treasuries came off their worst week in a year after a renewed rally in oil added to worries from reports showing inflation accelerated last month, with 30-year yields approaching a two-decade high above 5 percent and 10-year yields rising above 4.5 percent.

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