Markets
Oil prices erased yesterday’s bounce back towards the $100 barrel. There’s little news to report on the ongoing talks between the US and Iran. Markets take it as a positive sign. Iran’s state TV did say it obtained a draft of the initial unofficial MoU framework which included the withdrawal of US military forces and lifting the naval blockade. Iran in return would commits to allow commercial transit through the Strait of Hormuz to pre-war levels within one month. Future management of the Strait will be handled by Iran in cooperation with Oman, the draft stated. Brent crude fell to currently trade around $96. Core bonds benefit slightly from these lower oil prices. US changes are limited to <2 bps though. German yields ease a similar amount with the front end slightly outperforming (-2.0 bps) but that didn’t weigh on money market bets for an ECB June hike, on the contrary. The market implied probability grew from +/- 92% yesterday to 95% today as ECB heavyweight Schnabel’s comments from yesterday continue to linger. Stock markets march higher again. The EuroStoxx50 recoups part of yesterday’s losses and the likes of the S&P500 hold near record highs. Economic data was limited to the weekly ADP employment estimate but came with zero impact on markets. Coming in at nearly 36k (on a four-week moving average basis), weekly job growth remains among the quickest in the series, be it still short, history.
Currency markets show little movement. The kiwi dollar is the exception to the rule after the central bank barely kept the policy rate at 2.25% during this morning’s decision. The status quo came with strong messaging that hikes were imminent though and “most likely more and sooner”. Markets upped tightening bets with a first move fully priced in for September, to be followed several more through March next year. The 3.25% currently expected puts it in line with the Reserve Bank of New Zealand’s own view. NZD/USD sprints towards the 0.59 barrier. Most other dollar pairs hold a tight range with EUR/USD treading water around 1.165. USD/JPY sticks around 159.4, unfazed by Bank of Japan governor Ueda’s veiled hint for near-term hike(s) this morning. Sterling loses ground to EUR/GPB 0.866 amid Gilt outperformance.
News & Views
New EU car registrations increased by 4.2% YtD in April 2026 (to 3794k). The market continued to benefit from strong consumer demand for a range of electrified technologies, supported by new and revised tax benefits and incentive schemes across major European countries. In absolute terms, new battery-electric car registrations (BEV’s) rose by 33.8% when comparing April YtD 2025 with April YtD 2026 (747k). BEV’s accounted for 19.7% of the EU market, an increase from 15.3% a year earlier. Hybrid-electric (HEV’s) car registrations captured 38.2% of the market (from 35.3%), remaining the preferred choice among consumers in the EU. Moreover, the combined market share of petrol and diesel cars declined to 30.2%, down from 38.1%. In Belgium, new car registrations are 4.5% lower (151.6k) YtD compared to 2025. Petrol cars remain the dominant choice (43.8% from 42.2%), ahead of BEV’s (35.2% from 33.3%) and HEV’s (12.2% from 12%). Compared with the first four months of 2025, only new registrations of BEV’s increased (+1.1%).
UK energy regulator Ofgem today announced a 13% increase of the energy price cap for the third quarter of this year. Customers will see a smaller price increase of around 5% on their electricity bills compared to gas bills which are rising by 24%. The current price cap for a typical household paying by direct debit for gas and electricity is £1,641. In practice, the increase will be much smaller than an increase to £1,862 though as Ofgem updated its Typical Domestic Consumption Review. That’s how much energy a typical household uses. From 1 July, the figures will be updated to reflect the fact that households are using less energy than before – around 7% less electricity and 17% less gas compared to the last review. As a result, the price cap level from 1 July will be £1,663 per year – reflective of these updated values. At the height of the energy crisis, the government stepped in to cap bills at £2500. Currently, 40% (22 mn) of accounts are fixed tariffs and are therefore unaffected by this price rise.
