Market Information Friday 15 May 2026

Sterling weakened as the UK political crisis deepened following the resignation of the health minister, increasing pressure on the prime minister after heavy local election losses. The pound fell about 0.2 percent against the dollar and eased versus the euro, while government bond prices held gains. Markets are focused on rising uncertainty over the future direction of fiscal policy, even as UK equities edged higher.

Investors expect US Treasury yields to remain elevated as persistent inflation, driven largely by higher oil prices linked to the Middle East conflict, weighs on markets. Long-dated yields have risen sharply, lifting borrowing costs across the economy. Uncertainty about the policy approach of the incoming Federal Reserve chair adds to expectations of a steeper yield curve, with markets sceptical that inflation can be eased quickly through interest rate policy alone.

A Bank of Japan board member signalled support for an early interest rate hike, saying rates should rise as soon as possible if there are no clear signs of an economic downturn. The comments increase the likelihood of a June move, as inflation pressures intensify due to higher energy costs linked to the Middle East conflict. Markets now see a high probability of a near-term hike, with concerns growing over negative real interest rates.

The 6M Euribor increased with 6 basis points to 2.55% compared to previous business day. The 10Y Swap decreased with 4 basis points to 3.07% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.