AGP Executive Report

Fed & Rates: A blockbuster May jobs report (172k jobs; unemployment 4.3%) is pushing rate-hike odds back up, with futures pricing a December hike and cutting back near-term easing. Oil & Geopolitics: Brent and WTI slid as traders leaned toward de-escalation hopes in the U.S.-Iran standoff, even as Middle East risk still drives volatility. Markets & AI Sentiment: Tech-led pressure continued after Broadcom’s AI-chip guidance disappointment, helping cool the AI trade; European stocks were mixed as eurozone growth was revised lower. Healthcare Policy Risk: New analysis warns that flawed healthcare spending projections can distort coverage decisions for GLP-1s, raising uncertainty for drug forecasts. Crypto Positioning: Bitcoin’s funding rates turned negative, setting up a potential $2.6B short-squeeze “trap” narrative as BTC fell toward $61k. Energy Supply Stress: Jet fuel inventories hit a multi-decade low and Europe faces an imminent supply failure risk, spotlighting refinery capacity constraints. Agriculture & Trade: U.S. wheat exports hit the highest level since 2020/21, while trucking conditions improved (FTR index strongest in years) but freight volume remains the key watch. Corporate Moves: TerrAscend scheduled a shareholder vote for a reverse split ahead of a potential U.S. uplisting; Starlink subscriber growth forecasts are being positioned ahead of a possible SpaceX IPO.

AI & Semiconductors Shock: Broadcom’s results looked solid, but its AI chip outlook didn’t get upgraded—sending AVGO down ~13% and dragging global chip sentiment, with knock-on pressure across major memory and AI-linked names. Central Banking Watch: India’s RBI held the repo rate at 5.25% while cutting FY27 growth to 6.6% and lifting inflation to 5.1%, with West Asia-driven energy and supply-chain risks front and center. FX & Capital Flows: The RBI also rolled out measures to attract foreign capital—expanding access to government bonds and adding forex swap and NRI/OCI-related incentives—helping the rupee rebound after pressure toward the 100-mark. Oil & Geopolitics: Oil prices edged up as Lebanon ceasefire hopes dimmed and an Oman terminal suspended loadings after an explosion, keeping Strait of Hormuz disruption risk in focus. Rates, Gold & FX: Gold traded sideways near $4,400/oz as markets weigh “higher-for-longer” rate expectations; meanwhile the yen tested the 160 level again amid safe-haven flows. Housing & Consumer Demand: UK house prices fell for a third straight month, with mortgage rates and Iran-war uncertainty weighing on affordability. Commodities Outlook: Copper narratives stayed tight-to-deficit as miners like Freeport and Rio Tinto outlined 2026 ramp plans tied to AI data-center demand. Market Theme: Investors are increasingly treating AI optimism as fragile, with guidance misses and geopolitics now driving near-term repricing.

AI Stock Shock: Broadcom shares slid ~12% after its AI chip sales forecast missed expectations, knocking megacap sentiment and triggering a broader tech selloff even as the Dow rebounded. Semiconductor Supply Chain: TSMC signaled it wants to raise prices as AI demand keeps pressure on advanced capacity, with potential 3nm price hikes later in 2026—an important read-through for the whole hardware stack. Energy & Inflation: The IMF warned global oil inventories could fall to a five-year low as Iran-related disruptions tighten supply via Hormuz, while UCLA Anderson and Moody’s flagged a new inflationary risk from the oil shock. Rates & FX: Bank of Japan Governor Ueda leaned hawkish ahead of the June meeting, raising odds of a 25bp hike and lifting the policy-rate path toward 1%, with knock-on effects for global risk assets. Labor Watch: Weekly jobless claims rose to a four-month high, and Challenger data showed May layoffs climbing, though the labor market still looks “stable.” Market Microstructure: SpaceX filed for a record IPO, with Goldman projecting massive AI-driven revenue growth—fueling both excitement and valuation risk. Crypto & New Markets: Jupiter launched a native Solana prediction market, while crypto traders digested volatility around macro and tech headlines. Consumer Reality Check: Gas prices are reshaping travel plans, with higher pump costs pushing more Americans to use savings tools and shorten trips.

UK Economy & Construction: Britain’s construction PMI slid to 38.2 in May, the weakest since 2020, as Iran-war uncertainty and inflation hit new orders, with residential housebuilding falling hardest and costs rising fastest since 2022. India Clean Energy vs Grid Rules: India’s tougher grid-penalty regime from April 2027 worries investors—estimates point to revenue hits of ~11% for solar and up to 48% for wind—raising the risk that renewables slow just as the country targets 500 GW non-fossil capacity by 2030. Real Estate (UAE): Abu Dhabi is positioning for another leg of property demand into 2026, backed by long-term economic plans, infrastructure investment, and connectivity. Housing (New Zealand): NZ home building sank to a 10-year low; residential construction fell 5% to NZ$17.6b through March as high rates and global uncertainty cooled demand. Markets & Rates (Australia/FX): Commonwealth Bank shares fell 0.63% as investors price delayed RBA cuts; meanwhile the dollar index slipped below 97, a potential tailwind for non-dollar assets. Energy & Costs (US): GasBuddy forecasts summer pump prices near $4.80/gal, with Strait of Hormuz disruption a key risk. Tech Earnings Shock: Broadcom shares tumbled after an AI-chip revenue forecast miss, underscoring how sensitive AI capex expectations remain. AI/Capital Markets: SpaceX confirmed an IPO plan targeting about $1.77T valuation. Global Growth Watch: OECD cut 2026 growth forecasts, warning recession risk if the Iran war drags on. Commodities (Silver): Silver holds up around $32.50/oz as industrial demand from solar, electronics, and EVs offsets macro uncertainty.

Fed Watch: Kevin Warsh is set to roll back the Fed’s forward guidance, with talk of removing the “dot plot” rate forecast and easing-bias language—raising the odds of more volatile rate expectations for mortgages and credit. Labor & Inflation Pulse: US job openings jumped to 7.6M in April (JOLTS), while services inflation pressures rose as firms pre-ordered amid Middle East supply disruptions. Energy & Rates: Oil remains supported by Middle East risk and plunging inventories, keeping fuel-price shock concerns alive. Metals Supply Tightness: Copper is near $14,000/ton and Goldman lifted its end-2026 target on weaker mine supply; COMEX silver flows rose sharply even as prices lagged. AI Power Economics: PJM’s capacity-auction jump is pushing AI power costs into household bills and generator revenues, turning electricity markets into a key part of the AI forecast. Regional Growth Forecasts: OECD cut Philippine growth to 3.2% for 2026 and warned of stagflation risk; Brazil’s May trade surplus beat forecasts on higher export prices. Policy & Housing: Virginia’s revenue forecast rose by $1.5B, while Australia’s housing outlook worsened as tax changes could drag dwelling prices more than expected. Russia Reserves: Russia plans to sharply increase FX and gold purchases to rebuild its wealth fund and ease ruble strength.

Base Metals Rally: Copper jumped above $14,000/ton and aluminium hit a multi-year high as investors priced tighter supply risks and stronger demand, with HSBC warning of a possible “super-squeeze” if Middle East disruptions persist. Fuel Cost Shock for Trade SMEs: In South Africa, mixed petrol/diesel moves underline how volatile USD-priced fuel and FX swings ripple through logistics, imported inputs, pricing, and cash flow for small cross-border operators. India Demand Cools: India’s gasoline and diesel demand growth is forecast to slow after Iran-war-linked price hikes, with trucking already showing stress and analysts cutting 2026 growth expectations. Central Bank Watch: The RBI MPC starts June 3; most economists expect a pause at 5.25% but see tightening later in FY27 as fuel and geopolitical risks feed inflation. US Rates Signal Shift: Reports say the Fed may scale back forward guidance, potentially reducing visibility for mortgages and corporate borrowing decisions. Labor Still Resilient: US job openings rose to 7.6m in April, while hiring remains cautious—supportive, but not a green light for aggressive expansion. AI Infrastructure Funding: Alphabet plans to raise up to $80bn via equity, including a Berkshire deal, to fund AI capacity expansion. Vietnam Trade Pressure: Vietnam’s trade deficit hit a record $5.21bn in May as imports surged on higher input costs and inventory building, while tariff risks loom. UK Retirement Risk: New pension forecasts point to a widening savings gap, with only a small share on track for a comfortable retirement. Market Microstructure: Chinese investors cut Hong Kong stock exposure as AI-linked mainland shares look more immediate, shifting flows away from H-shares. Corporate Turnaround: B&M shares surged after a smaller-than-feared profit fall and early progress on execution and pricing competitiveness.

AI-led rally: US indexes hit fresh highs as AI spending optimism lifted tech; Marvell jumped ~30% after Nvidia CEO Jensen Huang called it the “next trillion-dollar company,” while HPE surged on an AI server/network outlook. Mega-fundraising: Alphabet plans an $80B AI compute push, including a $10B Berkshire Hathaway investment, after announcing a $180B–$190B capex range. Labor signals mixed: JOLTS showed job openings up 731k to 7.618M (highest since May 2024) but hiring fell 419k, with resignations at a near-6-year low—suggesting “slow-hire, slow-fire” amid Iran-war uncertainty. Geopolitics & rates: Markets weighed Middle East risk and oil moves; Europe held modest gains as Brent eased. Corporate updates: Dollar General raised FY guidance after Q1 profit beat; Hormel kept 2026 outlook despite fuel/logistics cost pressure. Automation demand: Interact Analysis forecasts collaborative robot shipments nearly doubling to 128,918 units by 2030, with China set to hold 61.4% share. Policy & tax tech: Israel’s Tax Authority says it will use AI to review 100% of tax reports (from ~4% today). Tokenization liquidity: Symbiotic launched Liquid Lane to swap tokenized assets for stablecoins quickly, aiming to fix redemption delays.

AI Funding Push: Alphabet plans to raise up to $80bn via equity sales, including a $10bn Berkshire Hathaway investment, to expand AI compute as its capex outlook climbs to $180–$190bn—an aggressive bet that demand for AI infrastructure stays ahead of supply. Semiconductor Demand: STMicroelectronics doubled its 2026 data-centre revenue forecast to about $1bn and sees 2027 potentially doubling again, pointing to sustained AI infrastructure buildouts (including major hyperscaler demand). Labour Market Risk (UK): The British Chambers of Commerce warns UK unemployment could rise by 400,000+ by 2028, with youth unemployment forecast to jump as higher labour costs and AI reduce entry-level hiring. Energy Volatility: Oil prices dipped after US-Iran talk uncertainty, with markets still nervous about the Strait of Hormuz and regional escalation risk. IMF Milestone (Sri Lanka): The IMF completed reviews under its rescue program, unlocking $695m in cash support and bringing total disbursements since 2022 to $2.4bn, though vulnerabilities remain. Corporate Watch (Australia): ASIC’s case against Rex and former directors is nearing its close, with the defence arguing major gaps in how the board’s statements were assessed. Telecom Competition (Australia): Vodafone’s network-sharing expansion is said to make it a credible challenger, narrowing the coverage gap with Optus and Telstra. Healthcare Policy (US): AHA urged CMS to revise FY2027 inpatient rehab and skilled nursing payment proposals, warning that tighter rules and productivity adjustments could reduce clinical flexibility.

Middle East Shock to Industry: Surveys show Iran-war supply strains are hitting European factories hardest, with Eurozone manufacturing still expanding but under pressure from fast-rising input costs and weaker demand. Oil-and-Inflation Spillover: Markets brace for more volatility as Iran-US talks wobble; Brent risks topping $100, keeping inflation and rates in focus. Mortgage Rates Watch: Zillow data shows 30-year mortgage rates easing slightly to 6.537%, but the broader message is “stay elevated” as oil-linked inflation keeps pressure on borrowing costs. AI Chip Boom in Asia: South Korea and Taiwan are seeing an AI-driven economic lift via higher tech pay, investment, and consumption, even as supply-chain buffers grow. Smartphone Demand Downshift: Counterpoint flags a record 2026 smartphone contraction (down 13.9%) tied to worsening memory chip shortages. Mining Cost Reset: AISC costs are structurally higher for miners, pushing electrification as a margin hedge; gold looks comparatively strong while copper faces a tougher cost floor. Policy & Budgets: Virginia lawmakers return to Richmond with a looming budget deadline and a major fight over data-center tax exemptions. Defense Contractor Momentum: SAIC posted a strong quarter with margin expansion and a large backlog, reinforcing defense spending resilience. Cloud Spend in India: Gartner forecasts public cloud services growth to $17.5B in 2026, led by AI-ready infrastructure.

Smartphones & chips: Counterpoint says global smartphone shipments could fall 13.9% in 2026 to 1.08bn units as memory-chip shortages worsen, hitting low-end models hardest. China growth pulse: China’s official manufacturing PMI stalled in May (50 vs 50.3 in April) as export orders weakened and input costs rose, underscoring demand fragility. AI-driven semis rally: TrendForce lifted 2026 memory and DRAM forecasts sharply, while Samsung crossed the 2,000-trillion-won valuation mark on the AI memory boom and HBM4E sample shipments. Geopolitics & commodities: Copper climbed as Goldman raised its 2026 target, with markets watching Iran-related tariff and supply risks; grains also bounced as oil prices supported biofuel demand. Housing cooling: UK Nationwide reported house prices down 0.6% m/m in May, with Iran-war uncertainty and higher rates weighing sentiment. Spain manufacturing: Spain’s PMI eased to 51.2 in May as Middle East-linked supply delays, costs, and weaker new orders pressured output. Corporate moves: Applied Nutrition raised its outlook, bought a US site for $16m, and licensed Sour Patch Kids/Swedish Fish sports nutrition production. India rates watch: RBI is expected to hold at 5.25% on June 5, with West Asia risks clouding inflation and growth.

IMF/WB/IEA Energy Security: The IMF, World Bank and IEA warn that if Strait of Hormuz shipping stays disrupted, global oil inventories could be drawn down fast enough to trigger summer fuel scarcity and broader economic strain. Macro Inflation Watch: The Philippines’ BSP estimates May inflation may have jumped to 7.1%–7.9% (7.9% would be the fastest in 3+ years), blaming food costs, peso weakness, and Middle East-linked energy shocks. Central Banking Signals: Reserve Bank of India policy looks set to stay on hold at 5.25% for June 5, while Australia’s RBA vote split 3-3 keeps a July rate hike on the table. China Demand Check: China’s May factory PMI stalled around the 50 line as export orders weakened and input costs rose, adding pressure to shift toward domestic demand. Housing Pressure (AU): New data shows Sydney and Melbourne home prices falling as higher rates and tax changes bite, while national prices are mostly flat. Markets & Stocks: S&P 500 hit a record 9th straight weekly gain as oil eased on ceasefire hopes; Zscaler slid despite beating Q3 estimates, while Snowflake and Dell jumped on stronger AI-linked outlooks. Crypto Market Structure: CME’s move to 24/7 Bitcoin futures ends the old weekend “gap” trading signal.

Housing & Tax Policy Shock (Australia): FoundIt warns Queensland and Melbourne renters face rent rises far above Treasury’s “$2 a week” estimate after negative gearing changes, with some Brisbane areas flagged for ~$17–$18 weekly jumps and Melbourne increases projected to wipe out promised tax relief. Sovereign Risk (Bulgaria/EU): The FT says Bulgaria could be hit with an excessive deficit procedure soon after joining the eurozone, with the deficit seen above the 3% rule and potential borrowing-cost pressure. Energy & Commodities (Hormuz): IMF/World Bank/IEA chiefs warn summer fuel shortages and market instability if Strait of Hormuz shipping doesn’t normalize, as inventories are drawn down and fertilizer prices hit low-income countries. Crypto Tax (EU): Circle’s policy lead says the EU’s $23B crypto tax forecast may be overstated, arguing transaction levies could push activity to DeFi and non-EU venues. AI & Markets (Tech): Wall Street’s AI-led rally keeps lifting “old guard” tech names; Dell and Micron momentum stories dominate, while Ruvi AI pitches a contributor-paid model for training data. Semiconductors (Tower): Tower Semiconductor highlights AI-driven silicon photonics demand with 2027 contract visibility and upbeat guidance.

Housing Affordability: Australia’s house-price slide isn’t translating into easier borrowing—Canstar analysis using Westpac forecasts shows Sydney and Melbourne prices may fall further in 2026, but borrowing capacity is shrinking faster, tightening entry-level affordability. Middle East Energy/Fertiliser Shock: IMF, World Bank and IEA warn fuel shortages could hit this summer if Strait of Hormuz shipping doesn’t normalize; the same risk is flagged for fertiliser markets, with Zimbabwe warned maize output could be severely damaged if disruptions persist. India Market Mood: Indian benchmarks ended the week lower as FII selling and a below-normal monsoon forecast revived food-inflation worries; Nifty and Sensex both fell, with crude weakness helping some sectors. Wall Street Tech-Led Bounce: US stocks closed at record highs on AI and earnings strength, with Dell’s forecast upgrade driving tech; investors still watch Iran-deal headlines. FX/Ruble Outlook: Sovcombank expects the ruble to stay supported in June, helped by higher oil export earnings amid ongoing Hormuz-related supply strain. Commodities Watch: Asian rice prices jumped in May as war and weather risks lift fertiliser and fuel costs, while global grain sentiment stays cautious. Crypto/AI Finance: AI is increasingly embedded in money management and fraud detection, while markets weigh risk across crypto as sentiment shifts. Wellness Demand: Sauna investment trends continue to spread in Australia and New Zealand, reflecting ongoing at-home recovery spending.

Global Food Outlook: The World Bank says West Asia conflict-driven food price pressure in 2026-27 should be smaller than early Russia-Ukraine effects, but still lifts its forecast—food prices up 2% in 2026 and 1% in 2027, with wheat and maize prices rising 4% in 2026. Wall Street & AI Earnings: U.S. stocks extended record gains as Dell surged after raising full-year guidance on booming AI server demand; investors also watched potential U.S.-Iran deal headlines. Housing Pressure: Zillow flagged a grim housing outlook, pointing to high rates and prices versus incomes plus tight supply of homes. Corporate Strategy & Capital Markets: Universal Music rejected Pershing Square’s unsolicited proposal, citing undervaluation, while Steakholder Foods advanced warrant exercises raising about $1.1m gross. Real Economy Watch: Canada slipped into a technical recession, with weak investment and housing weighing on growth; NAIOP sees office absorption improving but warns recession odds remain. Regional Growth Constraints: A water-constrained region near Mannheim expects 34,000 new residents and 17,500 new homes by 2031, hinging on whether new water capacity can keep up. Fintech/Market Infrastructure: FedEx Freight spinoff begins June 1 (FDXF), and Snowflake’s forecast raise signals continued enterprise AI data platform momentum.

AI Infrastructure & Semiconductors: Dell surged after lifting revenue and profit forecasts as AI data-center buildouts drive demand for its Nvidia-powered servers, with AI server revenue guidance raised to about $60bn for fiscal 2027. Market Mood: Wall Street pushed to fresh records as a tentative US-Iran ceasefire extension eased oil volatility, while corporate earnings kept the rally intact. Gold & Rates: UBS trimmed its end-2026 gold forecast to $5,500/oz as Iran-war risks and higher-for-longer rate expectations weigh, even as analysts still expect bullion to recover. Energy & Commodities: Ukraine cut gas storage tariffs to spur long-term bookings ahead of winter; wheat prices slid on a stronger euro and improved harvest outlooks. Emerging Markets FX: Zambia’s kwacha is expected to strengthen on mining inflows and copper strength, while Ghana’s cedi faces pressure from FX demand. China Macro: Reuters poll points to flat factory activity in May as weak demand and cost pressures bite, despite AI-driven electronics support. Housing & Policy: South Africa’s SARB warned more rate hikes may be needed if inflation risks worsen. Tech Hardware Outlook: Omdia says the “AI Factory” model is reshaping data centers into intelligence manufacturing, with major capex still accelerating. Regional Growth: Mexico outperformed the US and Canada in travel spending and arrivals in 2025, helped by lower Middle East disruption exposure. Corporate Deals: Ocado shares jumped after a partnership with Asda to overhaul ecommerce infrastructure starting early 2027.

Rates & Housing: Freddie Mac put the 30-year mortgage rate at 6.53% (up 2 bps), keeping affordability tight even as the 10-year Treasury yield eases; Zillow and Fannie Mae still see rates hovering in the low-6% range. Fed Watch: The Fed’s preferred inflation gauge (PCE) jumped to 3.8% in April, raising questions about how soon policy can turn. Markets & Oil: Stocks pushed to fresh highs on a tentative US-Iran ceasefire extension, while oil swung with the deal’s odds and Hormuz risk. AI & Equities: BlackRock’s global strategist says AI buildout spending could reach $6T by decade’s end, supporting a risk-on stance; meanwhile, Epoch AI expects inference compute to outpace training by 2030. Corporate Signals: Best Buy surged after beating sales estimates; Oracle jumped on a JPMorgan Overweight call and a massive $30B cloud deal; El Pollo Loco authorized a $40M buyback. Crypto: Standard Chartered urged investors to treat Ethereum’s slump like Amazon’s post-dotcom reset, arguing fundamentals will catch up. Canada Risk: The BoC warned that geopolitics, AI, and sovereign-debt stress could combine into a shock that tests financial resilience. Commodities: Sugar prices slid as Brazil production and global surplus expectations weighed on the market.