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Financial Markets Morning Commentary
By: Tom Pawlicki, Senior Specialist, Market Intelligence
Economic
- 10-year futures are +3/32. Yields are -1.00 bps at 4.54%. S&P futures are +31.00. It’s quiet trading in interest rates while stocks are higher due to further gains in chip companies. Oil prices are around $2/bbl lower after President Trump said that a peace deal could be reached with Iran in 2-3 days. However, Israel struck Tyre in southern Lebanon today and the Houthis in Yemen threatened to ban Israeli shipping in the Red Sea.
- Preliminary data on Strait of Hormuz transits shows 10 crossings on Monday compared to 5 crossings on Sunday.
- On the economic data calendar this week, existing home sales are due today at 9am CDT, CPI on Wednesday, PPI and jobless claims on Thursday, and Michigan sentiment on Friday.
- (Reuters) Nasdaq futures led gains in early trading, with shares of chipmakers Marvell Technology, Broadcom and Micron Technology rising between 1.1% and 4.1% premarket, extending their rebound after Friday's sharp selloff.
- (Reuters) Elon Musk's SpaceX is aiming to raise $75 billion, the most ever for an IPO, in a deal that would value it at $1.75 trillion. Pricing is expected on June 11, with trading to begin on the Nasdaq the next day.
- (Reuters) The U.S. Federal Reserve will hold its key interest rate for the rest of 2026, according to a strong majority of economists in a Reuters poll, the first clear consensus on that view this year as war-driven inflation proves more persistent than expected.
- (Bloomberg) The Iran war risk premium that swept through crop and fertilizer markets is rapidly evaporating as fears of prolonged supply disruptions fade, easing one of the biggest threats to food inflation. Prices of urea — one of the world’s most important crop nutrients — have plunged more than 30% since mid-April, wiping out the gains triggered by the conflict.
- (Reuters) ChatGPT-maker OpenAI confidentially filed for a U.S. initial public offering on Monday, joining rival Anthropic in a push toward the stock market as investors seek exposure to the artificial intelligence boom.
- (Reuters) British drugmaker GSK on Tuesday agreed to acquire U.S.-listed cancer drug developer Nuvalent for $10.6 billion.
- (Reuters) Indonesia's central bank unexpectedly raised interest rates by 25 basis points on Tuesday, taking the benchmark rate to 5.50%, it said in a statement.
- (Reuters) The Bank of Japan may follow its highly anticipated rate increase next week with another move higher as soon as October as it races to stay ahead of the curve in fighting inflation, according to a former executive director. “The next hike would probably be in October at the earliest” after the move in June, Hideo Hayakawa, the former official, said in an interview Tuesday. “The BOJ is already falling behind the curve a little, so they need to catch up at some point.”
Geopolitical
- (CNBC) President Donald Trump repeated the claim that a deal to end the war in Iran could be reached in “two or three days,” and that the critical Strait of Hormuz would reopen “immediately” after such a deal. Speaking to reporters after attending the NBA Finals in New York, Trump said that the two parties are in the final stages of a “very, very good deal that will not in any way allow nuclear weapons.”
- (Reuters) Israel struck the historic port city of Tyre in southern Lebanon on Tuesday killing at least eight people, the Lebanese health ministry said, after an Israeli evacuation order for the entire city was issued for the first time.
- (Reuters) President Donald Trump said on Tuesday that two U.S. helicopter crew members were "fine" following their rescue by a U.S. Navy drone after their Apache gunship went down in the Iranian-controlled Strait of Hormuz.
- (Reuters) U.S. forces disabled an unladen oil tanker in the Gulf of Oman on Monday after it attempted to sail to an Iranian port in violation of the ongoing blockade against Iran, the U.S. military said.
- (Reuters) Yemen's Iran-aligned Houthis said on Monday that they would ban Israeli maritime navigation in the Red Sea, adding to challenges for global shipping through the Middle East during the Iran war. The group said in a statement it had launched an attack on Israel and enacted a total ban on Israeli shipping in the Red Sea, warning of further escalation.
- (Reuters) The European Commission is ready to propose its 21st package of sanctions against Russia, targeting its energy sector, banks and also fisheries, EU Commission President Ursula von der Leyen confirmed on Tuesday.
- (Reuters) Russian drone and missile attacks on Ukraine's northeastern Kharkiv region killed a pregnant woman and two other people, Ukrainian officials said on Tuesday, while Russia-annexed Crimea said it was repelling drone attacks.
- (Reuters) Late on Monday, Ukrainian President Volodymyr Zelenskiy said he had a "positive" telephone conversation with U.S. envoys Steve Witkoff and Jared Kushner. He welcomed their willingness to work actively toward a settlement of the war in the coming weeks. "There are different people around Putin. Half of them want to continue this war and the other half want to stop it," Zelenskiy said in an interview with the Guardian that he posted on X. "Businessmen understand that the Russian economy is in a terrible situation."
- (Reuters) A fire was extinguished at a loading complex in Russia's Black Sea port of Novorossiysk after a Monday drone attack, local authorities said on the Telegram messaging app in the early hours of Tuesday.
Energy
- WTI is -$1.92/bbl at $89.38/bbl, while Brent is -$1.42/bbl at $92.83/bbl. Natural gas is +$0.031/MMBtu at $3.178/MMBtu.
- (Reuters) China's May crude imports slumped 29% to their lowest levels in eight years, extending a sharp decline in the world's largest oil importer that is helping keep a lid on global oil prices. Imports dropped to 33.08 million tons, or 7.79 million barrels per day, the lowest level since February 2018, customs data showed on Tuesday. In April, imports fell to a multi-year low of 9.3 million bpd, with Chinese refiners drawing on reserves last month to offset an even steeper decline from an average of 11 million bpd prior to the U.S.-Israeli war on Iran.
- (Reuters) Russia is set to reduce its crude oil exports as it plans to boost refinery runs in June amid looming fuel shortages, market sources said. Crude loadings from its western ports of Primorsk, Ust-Luga and Novorossiysk could fall to 1.7 million barrels per day (bpd) in June from 2.5 million bpd in May, according to preliminary data from industry and trading sources.
- (Reuters) Asia's naphtha markets were thinly traded on Tuesday, as concerns of weak supply-demand fundamentals stayed prevalent, though some buying interest did surface from northeast Asia. Naphtha refining margins extended gains, rising to $55 per ton at the market's close.
- (Reuters) U.S. production of jet fuel has likely hit record levels after prices doubled in March due to Iran's blockade of the Strait of Hormuz in its ongoing war with the U.S. and Israel, the Energy Information Administration said on Monday. Much of the higher U.S. jet fuel output is being exported as supply concerns have been felt most sharply in Europe and Asia, regions that previously imported large quantities of jet fuel from the Middle East via the Strait of Hormuz, the EIA said.
Metals
- Gold is +$2.00/oz, trading at $4,365.40/oz, while silver is -$0.04/oz at $68.545/oz.
- The dollar index is -0.341 points at 99.704.
- (Reuters) China's imports of unwrought copper and copper products fell 1.33% from the previous month to 446,000 metric tons, official customs data showed on Tuesday. For the first five months of 2026, China imported 2.01 million tons of unwrought copper and copper products, down 7% from the corresponding period a year earlier. Meanwhile, China's imports of copper concentrates and ores stood at 2.36 million tons in May, rising 0.38% month on month.
- (Bloomberg) Chinese aluminum exports surged in May, helping fill a global shortage caused by war in the Middle East. Crude oil imports continued to slump, dropping to an eight-year low, as the conflict chokes shipments from major producers.
- (Reuters) China's steel exports in May jumped by 8.8% from the month before to a five-month high, supported by subdued domestic demand and better margins for outbound shipments.
- Interest Rates
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Financial Markets Morning Commentary
Financial Markets Morning Commentary
Tom Pawlicki
- Interest Rates
The MarketWatch Update
Today's commodity market news and analysis/advisory guidance.
US RJO - Scott Magnuson, CTA
- Precious Metals
- Grains & Oilseeds
- Energy
- Coffee
- Cotton
- Sugar
- Meats & Livestock
- Currencies
- Interest Rates
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