Overview
- Late May comments from ECB officials Isabel Schnabel, Philip Lane and François Villeroy de Galhau made a June rate increase the market’s expected outcome and signalled the bank is prepared to act if energy shocks broaden.
- The Bank of Japan’s new core inflation gauge showed a 2.8% April reading that exceeded the 2% target, strengthening market bets of a June BOJ rate rise and lifting short‑term Japanese yields.
- Smaller Asia‑Pacific central banks held rates but warned of earlier or larger hikes, with the RBNZ revising its path higher and the Bank of Korea and others flagging further tightening if price pressures persist.
- Australia’s headline CPI fell to 4.2% after a temporary cut to the fuel excise, yet trimmed‑mean core inflation climbed to 3.4%, leaving the Reserve Bank of Australia’s policy path data‑dependent.
- Oil jumped again after new US strikes on Iran, re‑anchoring upside inflation risk and raising the chance of second‑round effects, with the Strait of Hormuz — which carries about one‑fifth of world oil shipments — the key chokepoint to watch for further disruption.