The dominant macro driver across all asset classes remains the US-Iran war, now in its third month, which has driven Brent crude to $100.21/bbl and pushed US headline CPI to 3.8% year-on-year, with April PCE expected to print 4.5% headline on Thursday — the hottest read since the war began. The 30-year US Treasury yield has hit a near 19-year high, and Bloomberg is already flagging market bets on a 2026 Fed rate hike under incoming Chair Kevin Warsh, who took office Friday 22 May; the FOMC held at 3.50–3.75% at Powell's final meeting with three dissenters opposing rate-cut guidance, pricing in an extended hold or higher. The disconnect between record corporate earnings — Q1 beats running 9.2% above consensus, the strongest YoY growth since 2004 outside post-recession periods — and a tightening macro backdrop driven by energy-led inflation defines the central tension in global markets this morning.
For Asia-Pacific investors, the cross-asset pressure is concentrated most acutely in Japan and energy-importing economies. USD/JPY sits at 158.92, near the level at which Japan spent over $30 billion in suspected intervention operations in the week of 7 May, and the 10-year JGB has reached 2.8% — a multi-decade high — as BoJ holds at 0.75% against a backdrop of oil-driven inflation. The Nikkei's 2.68% gain on Friday, led by tech and electronic components names, reflects a weaker-yen earnings tailwind for exporters rather than macro comfort. CNY has firmed marginally to 6.7837 as PBOC maintains a moderately loose stance, and the AUD at 0.7179 is tracking copper ($6.379/lb) and iron ore ($109.67/t) stability; however, aluminium's sharp 8.45% single-session drop and the divergence between WTI ($96.60) and Brent ($100.21) signal fragmented commodity markets that will weigh on materials and energy sector earnings visibility across the region.