A lighter week ahead, but still plenty to track.

Markets are tracking progress on US-Iran talks, key inflation prints from the US and Australia, and the RBNZ’s rate decision.

Calendar Events

  • Australia CPI – May 27
  • RBNZ Interest Rate Decision – May 27
  • US PCE Index – May 28
  • US Prelim Q1 GDP – May 28
  • Canada Monthly GDP – May 29

Top Things to Watch

Oil Prices Drop as Markets Monitor US-Iran Deal on Hormuz Tensions

Oil prices dropped more than 5% earlier today as markets are focused on developments in the Middle East after reports suggested the US and Iran are moving closer toward a potential agreement aimed at easing regional tensions.

President Trump said negotiations are in their “final stages,” with discussions reportedly involving the Strait of Hormuz and measures to reduce disruptions to global shipping routes.

The developments come after weeks of elevated geopolitical tensions that had increased uncertainty across energy markets and global trade flows. The Strait of Hormuz remains a strategically important route for global oil exports, making any progress in negotiations closely watched by investors.

US PCE & GDP — The Fed’s Reality Check

Markets will look to Thursday’s US PCE Index and preliminary Q1 GDP figures for a fresh read on inflation and growth.

Headline PCE rose to 3.5% YoY in March, while core PCE held at 3.2%, keeping inflation well above the Fed’s 2% target. GDP will also be under the microscope after the first estimate showed Q1 growth of 2% YoY, up from 0.5% in Q4.

Together, the data could shape rate expectations. Stronger inflation or growth may keep the Fed cautious, while softer numbers could revive hopes for policy easing later in the year.

Australia Inflation Watch — RBA Faces a Tricky Balance

Australia’s CPI report on Tuesday could set the tone for RBA expectations this week.

Inflation jumped to 4.6% YoY in March from 3.7% in February, while the trimmed mean stayed above the RBA’s 2–3% target range at 3.3%.

Another hot print would keep rate-hike risk alive. A softer reading, however, could give the RBA more room to wait as growth momentum slows.

RBNZ Decision — New Zealand Faces Imported Inflation Pressures

The RBNZ announces its latest policy decision on Tuesday, with the Official Cash Rate currently at 2.25%.

The central bank has already warned that inflation could stay near the top of its 1–3% target band, with fuel and import costs rising as the Middle East conflict pushes up global prices.

That leaves the RBNZ with little room for comfort. Slower growth argues for support, but another rise in cost pressures could keep policymakers cautious for longer.