U.S. Dollar and Equities Outperforming Other Financial Markets
May 26, 2026
In overnight trading following the extended U.S. Memorial Day holiday weekend, the dollar strengthened 0.8% against the Indonesian rupiah, 0.5% vis-a-vis the kiwi, 0.3% relative to sterling, the Mexican peso and Swiss franc, and 0.2% versus the yen and euro.
Advances so far in the Russell 2000, Nasdaq and S&P 500 amount to 1.7%, 1.3% and 0.8%, whereas equity markets have fallen somewhat in Japan, Germany, France, China, Australia, Taiwan, and Singapore. The 10-year U.S. Treasury yield is seven basis points softer in contrast to increases in other 10-year sovereign debt yields such as those in Italy (5 basis points), France and Italy (+4 bps), Australia and Germany (both +3 bps) and Japan (+2 basis points).
Despite a U.S. military strike in southern Iran, the price of West Texas Intermediate crude oil fell 2.7% overnight. Bitcoin and silver prices are each up 0.4%, while gold has slipped by 0.2%.
Investors are buying into the belief that an arrangement to open the Strait of Hormuz is coming before a done deal and ongoing dismantling of Iran’s nuclear weapons program is seen to be happening.
Released U.S. economic data today showed
- A depressed and 2-month low in consumer confidence during according to the monthly Conference Board indicator.
- Weak house price trends. The FHFA and Case-Shiller indices in March were only 1.7% and 0.8% above year-earlier levels.
- A 13-month high in the Chicago Fed National Activity Index of 0.14.
- A 10-month high in the Dallas Fed regional manufacturing index of +0.4.
The latest monetary policy reviews at central banks in Hungary and Kyrgyzstan each resulted in no changes being made to key interest rates. Both decisions to keep the status quo aligned with market expectations. The previous most recent rate change had occurred in February but involved opposite directional moves. Hungary’s cut of 25 basis points to 6.25% was the last of many reduction from a peak of 13.0% between September 2022 and October 2023, and officials had previously indicated a lengthy pause in light of the Middle East war and resulting rise in inflationary pressure. At 2.1%, CPI inflation in Hungary is up from 1.4% in February. Kyrgyzstan, by comparison, has a more acute inflation problem. The 12-month rise in its consumer price index has accelerated to a 3-year high of 12.8% from as low as 3.8% in the summer of 2024. In February, Kyrgyr central bank officials implemented their fourth policy interest rate hike since last July, an increase to 12.0% from 11.0%. The total of all four moves was 300 basis points, and the new rate level is back to a 21-month high.
Deputy Governor Himino of the Bank of Japan has clarified that the future evolution of the Iran conflict and how such affects global inflationary pressures and price expectations will be an important factor the timing of future moves normalizing Japanese monetary policy. Separately, Japan’s March index of leading economic indicators was revised 0.5 lower to a 55-month high, while the index of coincident economic indicators got revised up to a 2-month high.
Singapore GDP growth last quarter was revised significantly higher to +1.0% on quarter and +6.0% on year, which compares with average economic growth of 5.0% in full-2025. The quarter’s current account surplus of SGD 41.09 billion was its biggest in four decades and equivalent to a double-digit percentage of GDP. Singaporean industrial production in April exceeded its year-earlier level by 17.6%.
Great Britain’s distributive trades index improved to a 3-month high in May but was stayed significantly below the zero level at -46. Shop price inflation in the U.K. continues to hover just above 1.0%.
Brazil’s current account deficit of $21.96 billion in the first third of 2026 was roughly 10% smaller than a year earlier.
Swedish producer price inflation of 4.7% in April was the most in 38 months and up from 2.0% in March and -2.7% at the end of 2025.
Spanish PPI inflation accelerated to 8.3% last month from 3.1% in March and a 23-month low of -6.9% in February.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: National Bank of Hungary, National Bank of Kyrgyzstan, Singapore GDP and current account, U.S. consumer confidence and house price inflation
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