Market developments
Equities: Global equities posted broad gains on the week, with U.S. indices climbing to fresh record highs. In Asia, South Korea’s KOSPI was a standout, adding 3.55% on Friday alone to bring its May return to a remarkable 28.45%, driven by a frenzy in memory chip stocks including Samsung and SK Hynix. A key macro backdrop for the week was growing optimism around a potential U.S.-Iran peace deal, which lifted sentiment across risk assets.
Fixed Income: U.S. Treasuries headed for their best week since the start of the U.S.-Iran war, as falling oil prices and peace deal optimism drove a broad-based rally in credit markets. May proved to be a record month for European bond issuance, with volumes exceeding €238 billion, the busiest since January and a record for the month of May.
Commodities: Oil dominated the commodity narrative this week, with crude prices on pace for their biggest monthly decline since the onset of COVID-19 in 2020. Brent crude fell roughly 20% in May to around $92 a barrel by Friday and WTI dropped to approximately $86, as markets aggressively priced in the prospect of a U.S.-Iran ceasefire that could ease supply disruptions stemming from the conflict.