Financial Markets Daily Report
26 May 2026
Investors opened the week with a risk-on tone after US officials, including President Trump, signalled over the weekend that negotiations with Iran were approaching an agreement. Trading volumes remained subdued, however, as several major markets, including the US and the UK, were closed for a bank holiday.
In commodities markets, energy prices dropped on optimism surrounding a potential US‑Iran deal, with Brent falling below USD 97/barrel and TTF prices declining to EUR 45/MWh. Optimism boosted equity markets, which advanced across Asia and Europe, while US futures pointed higher for both the S&P 500 and the Nasdaq. In FX markets, the dollar weakened.
Eurozone sovereign yields declined sharply, with a mild curve steepening as short-term rates fell more than long-dated ones. Peripheral spreads narrowed, in line with the improved risk backdrop. Against this backdrop, investors’ expectations for ECB monetary policy eased slightly, although markets continued to price in two rate hikes this year.