Daily Market Outlook, May 15, 2026
Daily Market Outlook, May 15, 2026
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute — Oil Shakes the AI Tape, Burnham Shakes Sterling
Risk appetite is finally showing some fatigue as the oil shock starts to challenge the AI-led equity surge. MSCI Asia fell 1.2%, US futures are down 0.3% and Europe is set to open around 1% lower, with investors reassessing how long record equity multiples can look through higher energy costs. The Dollar is firmer for a fifth straight session, still benefiting from its haven status since the Middle East escalation began, while bonds are under pressure across the curve. The US 2yr yield is up 3bp to 4.05% and the 10yr has pushed through 4.50% to its highest level since May last year, on Kevin Warsh’s first day as Fed Chair.
Oil is the macro pressure point. Brent is back near $107/bbl, having dipped to $104/bbl yesterday after Trump first said the US “doesn’t need the Strait of Hormuz open” before later softening that stance. The market read-through is straightforward: the probability of a prolonged disruption remains too high to fade. China has called for the Strait to be reopened quickly and for renewed talks on Iran, while the Trump-Xi meeting has been described positively but without enough substance to offset inflation concerns. Taiwan risk also remains unresolved. The result is a familiar stagflationary mix: higher oil, higher yields, a stronger Dollar, weaker equities.
Inflation jitters are being reinforced by the data. Japan’s April PPI printed at 2.3% m/m, far above the 0.8% consensus, pushing the 10yr JGB yield up as much as 7bp. That follows the earlier upside surprise in US PPI and keeps the market alert to second-round effects from energy. For now, the AI story is not broken, but the burden of proof is rising: tech earnings momentum needs to keep absorbing a less friendly rates backdrop. With Warsh now in the Fed chair, Wednesday’s FOMC minutes will be watched for colour on the hawkish tilt at Powell’s final meeting, even if next week’s US data are mostly second tier.
The UK adds a sharper domestic risk premium. Sterling has fallen for a fifth day, with Cable down more than 1% since late yesterday, after a potential route back into Parliament opened for Andy Burnham via the Makerfield by-election. Markets will treat that as materially relevant because Burnham is considered more likely to favour a looser fiscal stance, and the news landed after the gilt close, leaving FX as the first pressure valve. Gilts therefore face a difficult open, especially against the global backdrop of rising bond yields. The key question now is whether Burnham can win the seat — but even before that, UK political risk is set to stay live via candidate selection, polling, party dynamics and any clearer timetable for a potential transition away from Starmer.
Next week’s UK calendar gives markets plenty to trade around. BoE speakers include Greene and Mann on Monday, Breeden on Tuesday and Taylor on Thursday, while labour market data arrive Tuesday, CPI Wednesday, and GfK confidence plus retail sales Friday. Headline CPI may actually ease to 3.0% y/y from 3.3%, in line with the BoE’s April MPR, helped by base effects from last year’s water bills and vehicle excise duty increases dropping out. That means any new energy impulse will need to be found in the components rather than the headline. Globally, flash May PMIs on Thursday are the main activity check, with Canada CPI, Australian jobs and Japan Q1 GDP also on deck. AI can still support equity leadership, but oil, yields and UK politics are now doing more damage at the margin.
Overnight Headlines
White House Says Trump, Xi Agree Iran Shouldn’t Control Strait
Trump Says China’s Xi Likes The Idea Of Buying More Oil From US
Trump Urges Xi To Allow Visa Access To China Payments Market
Trsy’s Sec Discussed Expanding US-China Trade With Trump In Beijing
US Expects Dramatic Agricultural Purchases By China, Greer Says
Trump Says He Wants Iran’s Uranium Mostly For ‘Public Relations’
Treasuries Lead Global Bond Yields Higher On Inflation Angst
Japan FinMin Says G7 Likely To Discuss Bond Volatility Next Week
Japan’s Katayama Denies Need For Extra Budget As Yields Rise
BoJ Expected To Raise Rates To 1.0% In June, Hike Again In Oct-Dec
Fed’s Barr Says Wrong To Lower Liquidity Rules To Shrink Fed Holdings
Pressure Mounts On UK’s Starmer As Key Minister Quits
Big Tech Groups Launch Global Borrowing Spree To Fund AI Expansion
Applied Materials’ Sales Forecast Gets Boost From AI Demand
Anthropic Agrees Terms Of $30B Funding Deal At $900B Valuation
Musk’s xAI Unveils First Coding Agent In Bid To Rival Anthropic
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)
EUR/USD: 1.1675 (EU1.53b), 1.1400 (EU1.29b), 1.2100 (EU1.1b)
USD/JPY: 158.00 ($1.08b), 162.00 ($873.9m), 165.00 ($577.1m)
AUD/USD: 0.7065 (AUD585m), 0.7150 (AUD400.6m), 0.7350 (AUD393.2m)
USD/CAD: 1.3615 ($300.6m)
USD/BRL: 4.9000 ($711m), 4.9900 ($630.1m), 5.0000 ($505m)
EUR/GBP: 0.8675 (EU451.9m), 0.8650 (EU411.4m), 0.8700 (EU315.1m)
GBP/USD: 1.3445 (GBP411m), 1.3260 (GBP381m)
USD/KRW: 1440.00 ($360m), 1450.00 ($341.9m)
USD/MXN: 17.30 ($474.6m), 17.15 ($310m)
NZD/USD: 0.5650 (NZD300m)
CFTC Positions as of May 8, 2026:
Equity fund speculators have made some notable adjustments recently, reducing their net short position in the S&P 500 CME by 6,871 contracts, bringing the total down to 389,571. Meanwhile, equity fund managers are feeling more optimistic, increasing their net long position in the S&P 500 CME by 14,772 contracts, now totaling 1,013,955.
In the realm of Treasury futures, speculators have also been active. They've cut their net short positions in CBOT US 5-year Treasury futures by a significant 100,106 contracts, now standing at 1,421,299. The CBOT US 10-year Treasury futures saw a reduction of 23,868 contracts in net short positions, which now sits at 815,269. The CBOT US 2-year Treasury futures experienced a trim of 35,934 contracts, leaving a net short position of 1,673,329. Additionally, speculators reduced their net short position in CBOT US UltraBond Treasury futures by 34,850 contracts to a total of 259,435. However, there was an increase in the net short position for CBOT US Treasury bonds futures by 59,287 contracts, bringing it to 172,942.
In the cryptocurrency market, Bitcoin's net long position has reached 1,441 contracts.
On the currency front, the Swiss franc has a net short position of -34,521 contracts, while the British pound's net short position is -63,908 contracts. The euro is showing strength with a net long position of 32,202 contracts, whereas the Japanese yen holds a net short position of -61,738 contracts.
Technical & Trade Views
SP500
Daily VWAP Bullish
Weekly VWAP Bullish
Above 7430 Target 7550
Below 7390 Target 7300
DXY
Daily VWAP Bullish
Weekly VWAP Bearish
Above 98.85 Target 99.50
Below 98.50 Target 96.12
EURUSD
Daily VWAP Bearish
Weekly VWAP Bullish
Above 1.1785 Target 1.1850
Below 1.1750 Target 1.16
GBPUSD
Daily VWAP Bearish
Weekly VWAP Bullish
Above 1.3445 Target 1.3885
Below 1.34 Target 1.3320
USDJPY
Daily VWAP Bullish
Weekly VWAP Bearish
Above 160 Target 161
Below 159.50 Target 152
XAUUSD
Daily VWAP Bearish
Weekly VWAP Bearish
Above 4700 Target 4800
Below 4500 Target 4300
BTCUSD
Daily VWAP Bullish
Weekly VWAP Bullish
Above 79k Target 86k
Below 78k Target 76k
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!