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News
Friday, May 15, 2026
What’s happening: The US dollar rose this morning and remains on course to record its biggest weekly surge in over two months.
What happened: Higher energy prices and persistent disruptions at the Strait of Hormuz raised inflation concerns, triggering speculations of an interest rate hike by the Federal Reserve.
Investors also remained focussed on the second day of talks between US President Donald Trump and China’s President Xi Jinping.
Why it matters: Data released earlier this week showed that US wholesale inflation had accelerated at its fastest pace since 2022 in April, while consumer prices rose by the biggest surge since 2023 amid climbing energy prices due to the US-Iran conflict.
Retail sales growth eased as expected but continued to signal resilient consumer demand, while data on weekly initial jobless claims highlighted stability in the US labour market. Retail sales in the US rose 0.5% in April, easing from 1.6% growth in March, but came in-line with market estimates.
Investors have now fully priced in no interest rate cut by the Fed this year, while there are growing speculations of a rate hike by December.
The talks between the US and China remained in focus, after President Xi warned that Taiwan could become a source of “clashes” between the nations.
Both US and Chinese leaders expressed their desire to reopen the Strait of Hormuz, which has been effectively closed since the beginning of the war late in February.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose around 0.3% to 99.08 this morning, hitting a two-week high.
For the week, the US dollar index was on track to record a gain of more than 1%, which would be its sharpest rise since early March.
The EUR/USD forex pair fell 0.6% to 1.1651, while the GBP/USD pair tumbled 1.2% to trade at 1.3370 and the USD/CNY pair rose around 0.2% to 6.7983.
What to watch: Investors will continue monitoring announcements related to the US-China meeting.
Data on NY Empire State manufacturing index (1630 UAE Time), industrial production (1715 UAE Time) and manufacturing production (1715 UAE Time) will be released by the US today. The NY Empire State manufacturing index, which surged to 11 in April from -0.2 in the previous month, is expected to decline to 7.5 in May. Analysts expect US industrial production to grow by 0.3% in April following a 0.5% decline in March. US manufacturing output, which fell 0.1% in March, is expected to rise by 0.2% in April.
Context: Japan’s Nikkei 225 Index fell this morning as investors assessed the latest PPI data.
Details: Data released this morning showed Japan’s producer prices surged 4.9% year-over-year in April, accelerating from 2.9% in the previous month and topping market expectations of 3%.
Producer prices recorded the fastest annual growth since May 2023, due to rising cost pressures amid a surge in energy prices.
However, upbeat corporate reports and continued momentum in AI stocks lent support to the overall markets.
Meanwhile, Bank of Japan board member Kazuyuki Masu said that rates should be increased as soon as possible, citing higher inflation concerns.
Japan’s Nikkei 225 fell 1.28% to 61,849.81 this morning. SoftBank Group, Mitsubishi UFJ and Toyota Motor were the main gainers. Meanwhile, the USD/JPY forex pair rose 0.4% to 158.51 this morning.
What to watch: Investors will continue monitoring developments related to the US-China summit and the Middle East conflict.
Data on GDP growth rate, industrial production and Tertiary industry index from Japan will be released on Tuesday. Japan’s economy, which grew at an annualised pace of 1.3% in the fourth quarter, is expected to expand by 0.5% in the first quarter. Analysts expect Japan’s industrial production to decline 0.5% in March following a 2.0% contraction in the previous month.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.46%, 1.32%, 0.93% and 0.76%, respectively.
Russia launched several missiles and drones on Ukraine’s capital city of Kyiv. The news sent the USD/RUB pair higher in forex trading this morning.
India’s passenger vehicle sales rose 2.5% year-over-year in April. This being a significant slowdown from the previous month’s 14.1% growth lent support to the USD/INR forex pair.
New Zealand’s Business NZ performance of manufacturing index fell to 50.5 in April from a reading of 52.8 in the previous month, which sent the NZD/USD pair lower in forex trading this morning.
Argentina’s consumer prices rose 2.6% in April, slowing from 3.4% in the previous month. The latest reading coming in above market estimates of 2.5% lent support to the USD/ARS forex pair.
South Korea’s export prices jumped 40.8% year-over-year in April, recording the largest growth since 1998. However, the USD/KRW pair rose in forex trading this morning.
Italy’s inflation rate (1200 UAE Time), Turkey’s budget balance (1200 UAE Time), China’s current account (1300 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Canada’s housing starts (1615 UAE Time), foreign securities purchases (1630 UAE Time) and manufacturing sales (1630 UAE Time), US capacity utilisation (1715 UAE Time), NOPA Crush report (2000 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time), Brazil’s business confidence (1800 UAE Time) as well as Russia’s GDP growth rate (2000 UAE Time) and inflation rate (2000 UAE Time).
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