Market Commentary: Wednesday 14th May

Yesterday’s softer US CPI numbers did little to change interest rate expectations, with just two Fed rate cuts still expected for the rest of 2025—in September and December. Similarly, two cuts are priced in for the UK and Europe, while Canada appears on track for one or two. Australia and New Zealand are both expected to cut next week, followed by two more cuts by year-end.

Risk sentiment remains positive, with gains in US tech stocks yesterday after Nvidia and Advanced Micro Devices announced plans to supply semiconductors to a Saudi Arabian AI firm. This followed an announcement from Trump of $1 trillion in investment from Saudi Arabia into the US.

Tencent Holdings reports earnings today, with Alibaba following tomorrow—two key days for Chinese tech, where the recent optimism will be tested.

We also have a wave of CPI data from European nations today and tomorrow. Earlier, Germany’s inflation came in as expected, with YoY at 2.1%.

WTI crude continues to drift slightly higher, now above $63 a barrel amid the positive sentiment. This rebound in oil may start raising alarm bells for Trump, who is likely to push back against rising prices. Gold is treading water around $3,253.

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