Thursday 7 May 2026
1. Global Macro
- The Reserve Bank of Australia hiked the cash rate by 25bps to 4.35%, its third consecutive increase, effectively unwinding the three cuts delivered in 2025. The decision was 8-1, with Governor Bullock warning the Board will "do what it considers necessary" to rein in inflation. Westpac forecasts two further hikes to 4.85% by August.
- US March CPI printed at +3.3% year-over-year, the highest annual reading since May 2024, driven primarily by a 21.2% surge in gasoline prices linked to the Middle East conflict. April CPI is due May 12 and will be the last complete inflation picture before the Fed's June 16-17 meeting.
- The ECB held rates steady at its April 30 meeting, leaving the deposit rate at 2.0%, citing near-term inflationary pressure from the Middle East conflict. The next ECB decision is scheduled for June.
- The Fed is on hold until its June 16-17 FOMC meeting. Markets continue to price a move toward a neutral setting around 3.25% later in 2026, though sticky inflation data may delay the timeline.
2. Equity Markets
- The S&P 500 surged 1.46% to a fresh record close of 7,365 on May 6, after President Trump signalled that a comprehensive deal with Iran was close. Futures are pointing to a modestly positive open, trading around 7,351.
- The ASX 200 rallied 1.30% to close at 8,794, up 113 points, riding the tailwind from Wall Street's record session and the prospect of lower oil prices from a potential Iran peace deal.
- BHP was a standout performer, gaining 3.2% on the session and rallying roughly 6.3% over two days to trade within 2% of all-time highs. Mining names broadly benefited as iron ore prices firmed following China's return from its five-day holiday.
- Energy stocks were the main laggard, with the ASX Energy sector falling 3.1% as Brent crude collapsed 7.7% on Iran deal optimism. Utilities (-1.2%), Healthcare (-0.4%) and Tech (-0.2%) also slipped.
3. Private Equity & Deal Flow
- General Catalyst agreed to take American Express Global Business Travel off the NYSE for US$6.3 billion, showcasing the firm's AI roll-up strategy of integrating platform companies with businesses primed for automation.
- THL Partners closed its tenth flagship fund at US$6.35 billion of investable capital, a 13% step-up from its 2021 predecessor, bucking the broader fundraising slowdown.
- The fundraising environment remains under pressure. PE managers raised US$86 billion in Q1 2026, roughly 20% of last year's full-year total of US$423 billion, which was itself the second consecutive annual decline. LPs are demanding better terms, longer diligence, and more co-investment access.
- A consortium led by Tinicum and Blackstone agreed to acquire UK-listed engineering group Senior plc for GBP 1.4 billion (US$1.9 billion). Energy-related assets continue to dominate large-cap PE deal flow, accounting for four of the top 10 announced transactions and over US$55 billion in aggregate value.
4. Commodities & FX
- Brent crude plunged 7.7% to US$101.41/bbl and WTI fell 6.8% to US$95.30/bbl after reports the White House is close to a one-page Memorandum of Understanding with Iran to end the conflict and begin nuclear negotiations. WTI stabilised above US$95 in Asian trade.
- Gold climbed above US$4,700/oz, rising for a second straight session as the oil price collapse eased inflation fears and boosted demand for the metal.
- Iron ore rose 2.1% to US$110.86/t as Chinese buyers returned from the Labour Day holiday. The benchmark I2609 futures contract on the Dalian exchange closed at 816 RMB/t, up 2.84%.
- AUD/USD edged up to 0.7242, supported by the RBA's rate hike and broad risk-on sentiment. The Aussie has gained 2.81% over the past month and 13.16% over the past year.
Key Themes for Today
The dominant theme is the potential breakthrough in US-Iran negotiations, which sent oil prices sharply lower and propelled equities to record highs. If a deal materialises, it would meaningfully ease energy-driven inflation pressures that have been the primary headache for central banks globally. Meanwhile, the RBA's third consecutive rate hike underscores that Australia's domestic inflation fight is far from over - the divergence between a potentially loosening global energy backdrop and a still-tightening Australian monetary cycle creates both opportunity and risk for portfolios positioned across rates and equities.
Briefing compiled by Murdoch Capital AI | 7 May 2026