Next Week Outlook: US-Iran Ceasefire Negotiations Enter Critical Window, Persistent Inflation May Influence Powell's Rate Policy

This week, financial markets moved like a roller coaster, experiencing sharp reversals. Initially, concerns about inflation and tightening fears surged due to the US rejection of Iran's peace proposal and Powell's confirmation as Federal Reserve Chair;

However, as the weekend approached, with breakthrough progress in US-Iran ceasefire negotiations, global bond markets, equities, and precious metals risk appetite appeared to ease.

According to a post from Trump, the US-Iran agreement is essentially complete, and the Strait of Hormuz is about to reopen. It is reported that the current focus of negotiations is on ending the war, with nuclear talks postponed to the next phase.

In terms of monetary policy, on the day Powell was sworn in as Fed Chair on Friday, Trump urged him to keep monetary policy "independent," but also hinted that the economy "does not need to be cooled."

Meanwhile, Fed Governor Waller stated that the Fed's "chance of rate cuts this year is not greater than that of rate hikes," and interest rate swap markets have already priced in at least a 25 basis point hike this year, indicating a shift within the Fed toward a hawkish stance.

Next week's market focus will mainly be on the US April core PCE price index and GDP revision. Given the previous CPI and PPI data exceeded expectations, PCE also faces upside risks. If the data remains strong, it will reinforce rate hike expectations and strengthen the dollar.

Moreover, inflation data from New Zealand, Japan, and several European countries will be released sequentially next week, providing more reference for global monetary policy directions. Additionally, the US earnings season has largely concluded this week, and macro factors may once again dominate the market next week.

Due to the Memorial Day holiday, US markets will be closed on Monday, May 25, and trading in precious metals, crude oil, and US Treasury futures on the CME will also end early. Similarly, markets in the UK, South Korea, Hong Kong, and other regions will be closed on that day.

This also means trading hours will be shortened next week, and market volatility may concentrate over the remaining four trading days. As market participants, it is important to closely monitor upcoming economic data and policy developments, and to prepare for risks.

#美伊停火 # Market Outlook