May Day Holiday Closures – Currency Thoughts
May Day Holiday Closures
May 1, 2026
There’s little report as the new month gets underway. Most markets in Europe and Asia are closed due to labor day holidays, so there’s been only a trickle of manufacturing purchasing manager surveys and other data releases around the world. Today marks the 60-day threshold whereby the U.S. congress is obligated to declare all wars, but the deadline will not be enforced. President Trump claims the U.S. already won the conflict but wishes to make the victory more convincing. Mutual blockades of the Strait of Hormuz are keeping the channel impenetrable. How the two adversaries plan to proceed militarily from here remains undisclosed, and the argument over what to call the war doesn’t change the reality that much of the world will suffer far greater economically if the Strait stays shut much longer.
U.S. stocks ended April on a sharply upward note. Without fresh direction from news out of the Middle East, investors turned their attention to better-than-foreseen first quarter corporate earnings and yesterday’s decent U.S. economic releases. Those gains have held up but not been much extended in futures trading this quiet Friday. The ten-day U.S. Treasury yield has edged a basis point higher, and the dollar has drifted 0.1% lower against the Swiss franc, Canadian dollar and sterling. Dollar/yen is steady after the Japanese currency’s big and quick strengthening move yesterday on suspected but thus far unconfirmed forex intervention.
The prices of West Texas Intermediate crude oil and Comex gold have fallen around 1%. Bitcoin has extended the gains it made in April.
While most central banks held their fire last month, preferring to gather more intelligence on how long the spike in the price of oil might last and how extensively that shock will extend to other costs. With each day, however, it seems increasingly likely that the pendulum of interest rate risk is swinging from further easing to either a neutral stance or into rate-lifting territory. The next test of this dynamic comes at next week’s scheduled policy review by the Reserve Bank of Australia.
Among today’s handful of released manufacturing purchasing manager surveys taken in April, the Australian, British and Japanese indices were each revised a tad upward. Japan’s reading of 51.5 represents a 31-month high, while the British reading of 53.7 shows the fastest expansion rate in 47 months. Australia’s revised score of 51.3 is at a 3-month high. Ireland’s PMI also climbed to a 47-month high, 54.9. In each case, manufacturers appear to have front-loaded demand, believing that supply shortages and input prices could go significantly higher. While the activity indices improved, confidence to the future outlook became more guarded.
Core consumer price data for Tokyo, which serves as a bellwether of the subsequent release countrywide data, fell to a 49-month low of 1.5%. It is not Japan’s practice to exclude energy from core inflation, and that component showed a reduced year-on-year 4.6% decline versus drops of 7.5% in March and 9.2% in February. When energy as well as fresh food is excluded, the so-called “core core” CPI inflation rate slowed to a 16-month low of 1.9% in April.
Australian producer price inflation last quarter decelerated to an 18-quarter low of 3.0% from 3.5% in the final quarter of 2025 and 3.7% in 1Q 2025.
Pakistan reported both consumer price and wholesale price figures for April. CPI inflation of 7.3% was its highest in 21 months, while wholesale price inflation of 13.6% was near twice March’s level and its highest point in two years.
According to the Nationwide index, British house price inflation picked up to an 11-month high of 3.0% in April from 2.2% in March and 1.0% at the start of 2026.
Swiss and Dutch retail sales during March were respectively 0.5% and 2.9% above year-earlier levels.
U.S. and Canadian manufacturing purchasing manager surveys will get released later this morning.
Copyright 2026, Larry Greenberg. All rights reserved.
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