Asia Market Quick Take – 19 May, 2026

Key points:

• Macro: Trump calls off planned strike on Iran after appeal from Gulf allies
• Equities: NextEra Energy buys Dominion Energy for $67b in stock
• FX: JPY weakens on extra-budget worries; GBP surges after UK borrowing pledge
• Commodities: Oil remains elevated while gold holds above $4,500
• Fixed income: US 30Y yield at 5.14%, highest since July 2007

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Japan’s Q1 2026 GDP grew 2.1% annualized, beating the 1.7% consensus, with consumption up 0.3% q/q and net exports adding 0.3 ppt; the GDP deflator stayed at a stronger-than-expected 3.4%, bolstering the case for further BoJ hikes.
• Kevin Warsh will be sworn in as Fed Chair by President Trump on Friday at the White House, as Fed officials continue to signal patience on rate cuts amid persistent inflation concerns.
• Trump said he called off a planned strike on Iran after appeals from Gulf allies, citing “serious negotiations,” as the US reportedly offered a temporary waiver on Iranian oil sanctions and the Strait of Hormuz stayed shut to tankers for a 10th day.
• RBA Assistant Governor Sarah Hunter warned inflation expectations risk drifting higher and that a sharp slowdown might be needed to re-anchor them if they slip out of control.
• The US NAHB/Wells Fargo Housing Market Index rose to 37 in May 2026 from 34 in April, beating forecasts of 35. Current sales, six‑month sales expectations, and buyer traffic each gained three points (to 40, 45, and 25, respectively). Builders cutting prices fell to 32% from 36%, though the average discount increased to 6% from 5%.

Equities: 

• US: US equities closed mixed as investors weighed Iran peace signals against elevated oil prices ahead of Nvidia's Wednesday earnings. The Dow rose 160 points or 0.3% to 49,686, while the S&P 500 slipped 5 points or 0.1% to 7,403 and the Nasdaq fell 134 points or 0.5% to 26,091. Nvidia declined 1.3%, Regeneron dropped 9.8% after skin cancer treatment fails late stage trial, and Seagate closed down 6.9%. NextEra Energy Inc. agreed to pay about $67 billion in stock for Dominion Energy Inc. in the biggest power acquisition ever, creating a giant utility extending from Florida to the artificial intelligence data centers clustered in Virginia.
• EU: European equities recovered from early losses to close higher after reports that the US is considering a temporary waiver on Iranian oil sanctions. The Stoxx 600 gained 0.5% to 610, led by oil and gas stocks. The DAX rose 1.5% to 24,308, with Deutsche Boerse surging 4.7% after TCI disclosed a 5.15% stake. The FTSE 100 gained 1.3% to 10,324, led by Shell rising 3.0% and Centrica up 4.1%. The Euro Stoxx 50 rose 0.4% to 5,849.
• Asia: Asian equities fell broadly on Monday as rising oil prices and elevated bond yields weighed on sentiment. The Nikkei 225 dropped 0.9% to close at 60,816, while Hong Kong's Hang Seng declined over 1% to 25,675. Baidu reported Q1 earnings that beat estimates, with AI revenue exceeding half of its general business revenue for the first time. South Korea's Kospi was the standout, rebounding from an intraday drop of 4.7% to close up 0.3%, supported by Samsung Electronics gaining around 4% following a positive court ruling. Foreign investors sold a net $2.3 billion of Korean equities. On Tuesday morning, the Nikkei opened 0.6% higher at 61,203 led by financial stocks, while the Kospi opened 1.2% lower at 7,426 as retail flow dependence raised concerns about rally sustainability.

Earnings this week:

• 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:

• USD edged lower to start the week as US–Iran tensions kept oil and yields elevated. The Bloomberg Dollar Spot Index slipped 0.1% and Brent crude hit $111.80 amid Strait of Hormuz concerns.
• JPY weakened, with USDJPY above 159, as investors focused on Prime Minister Sanae Takaichi’s extra-budget plans, seen by some as likely to keep the currency under pressure and trigger more FX intervention.
• GBP strengthened sharply, with GBPUSD up 0.9% to 1.3450, its biggest intraday gain since late April, after Andy Burnham ruled out loosening the UK’s borrowing rules.
• EUR rose modestly to $1.1637 but fell against sterling, with EURGBP down to 0.8677.
• CAD was steady, with USDCAD around 1.3749 as markets awaited Tuesday’s CPI release, where economists expect Canadian inflation to come in at 3.1% year-on-year for April.

Commodities:

• WTI crude fell 1.8% in after-hours trading to around $102.50 per barrel after Trump said a planned Iran strike was called off, reversing a 3.3% intraday gain that had pushed prices above $107. Brent crude dropped from around $112 per barrel. The Strait of Hormuz closure has reportedly cost US consumers an estimated $45 billion since the Iran war began.
• Gold rose 0.6% to $4,586 per ounce in Asian trading, rebounding from Monday's 0.07% decline to $4,552.50. Gold remains off 14% from its January 52-week high of $5,318 but is up 41% from its May 2025 low as safe-haven demand persists amid Middle East tensions.
• Copper settled 0.3% higher at $6.27 per pound, its fifth-highest close in history, supported by AI infrastructure demand and supply concerns after Codelco launched an internal audit into potentially overstated 2025 production figures. LME 3-month copper closed $32 higher at $13,588 per tonne, up 0.2%.

Fixed income:

• The US 10-year Treasury yield rose 1 basis point to 4.59% on Monday, while the 30-year yield climbed 2 basis points to 5.14%, marking a new 52-week high and the highest level since July 2007. The 30-year has risen in five of the past six sessions, up 13 basis points over the last two days as inflation concerns and elevated oil prices weigh on bonds.
• The German 10-year Bund yield stands at 3.15%, with G-7 finance ministers meeting in Paris set to discuss the global bond selloff as yields hit multi-decade highs across major markets. Japanese Finance Minister Satsuki Katayama said the G-7 are expected to talk about developments in bond markets at their May 18-19 gathering.
• Japan's 10-year JGB yield stands at 2.74%, with the sticky 3.4% GDP deflator adding downward pressure on bond prices ahead of a 20-year JGB auction on Wednesday. Markets are pricing in further Bank of Japan rate hikes following the stronger-than-expected GDP data and persistent inflation pressures.

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