Federal Reserve (Fed) Bank of New York President John Williams said on Wednesday that higher energy prices are driving up costs and inflation, per Reuters.

ING’s Padhraic Garvey and Michiel Tukker stress that Eurozone real rates are increasingly driven by structural forces such as fiscal expansion and record bond supply. They point to rising 10Y euro implied real rates since 2024, helped by German spending plans.

United States ISM Services New Orders Index climbed from previous 53.5 to 57.3 in May

United States ISM Services PMI came in at 54.5, above forecasts (53.8) in May

United States ISM Services Prices Paid: 71.3 (May) vs 70.7

United States ISM Services Employment Index dipped from previous 48 to 47.9 in May

United States Factory Orders (MoM) came in at 4.8%, above forecasts (4.6%) in April

The final reading of the United States (US) S&P Global Services PMI came in at 50.7 in May, compared to the previous 50.9 and missing estimates of 50.9. Meanwhile, the Composite PMI was confirmed at 51.5 in the same month, slightly below the anticipated 51.7.

United States S&P Global Composite PMI came in at 51.5, below expectations (51.7) in May

United States S&P Global Services PMI registered at 50.7, below expectations (50.9) in May

Societe Generale’s Santosh Ejantkar and Tanmay Purohit note India’s equity market has slipped to seventh globally, overtaken by South Korea and Taiwan as their semiconductor-heavy markets benefit from the AI boom.

UOB economist Lee Sue Ann highlights that Australia’s GDP growth slowed to 0.3% q/q in 1Q26 as weak public spending, trade drag and cyclone disruptions offset strong business investment.

ING economist James Smith argues that a June Bank of England (BoE) rate hike now appears unlikely as weaker United Kingdom (UK) data and lower Oil prices ease pressure on policymakers.

Standard Chartered economists Dan Pan and Steve Englander note that recent QCEW data validate softer NFP readings in late 2025, when government shutdown effects and DOGE layoffs weighed on employment.

Canada Labor Productivity (QoQ) came in at -0.5% below forecasts (0.7%) in 1Q

Private sector employment in the United States grew by 122K in May, the Automatic Data Processing (ADP) reported on Wednesday. This print followed the 105K increase recorded in April and came in better than the market expectation for an increase of 117K.

Rabobank strategist Molly Schwartz notes that Canada has entered a technical recession, with Gross Domestic Product (GDP) contracting for two consecutive quarters and missing expectations.

United States ADP Employment Change came in at 122K, above forecasts (117K) in May

UOB economist Lee Sue Ann notes that softer Australian Gross Domestic Product (GDP), easing inflation and a cooling labour market have reduced pressure on the Reserve Bank of Australia (RBA) to tighten further.

DBS Group Research economist Radhika Rao argues that Eurozone markets face a stagflationary shock from US-Iran tensions that will hit Europe harder than the US, pushing the European Central Bank (ECB) to tighten policy earlier.

European Central Bank (ECB) Vice-Chair of the Supervisory Board Frank Elderson said during the European trading session on Wednesday that the balance of risks has clearly deteriorated due to Middle East conflicts.

United States MBA Mortgage Applications increased to -2.5% in May 29 from previous -8.5%

The European Central Bank (ECB) could tighten monetary policy sooner than previously expected, according to the latest Reuters poll of economists.

In a podcast interview on Wednesday, US President Donald Trump said that “Iran has agreed they will not have a nuclear weapon.”

MUFG’s Derek Halpenny argues that strong United Kingdom (UK) credit and mortgage data, alongside elevated UK front-end yields, support the case for further Bank of England (BoE) tightening.

Iran's Foreign Ministry has stated during the European trading session on Wednesday that it condemns United States (US) strikes on Iranian tanker and Qeshm island.

UOB strategists Quek Ser Leang and Lee Sue Ann note AUD/USD failed to retest 0.7135 and instead held in a tight 0.7153–0.7187 band, but still sees a soft tone with scope for a drift toward 0.7150.

Danske Research Team notes that EUR/DKK hit a new historic high at 7.4739, with the Danish central bank refraining from FX intervention in May. They argue that while the bank shows patience with upward pressure, continued strength would likely prompt action to cap EUR/DKK.

The Institute for Supply Management (ISM) is scheduled to release the May Services Purchasing Managers Index (PMI) on  Wednesday. Market participants anticipate a modest improvement, with the index forecast at 53.8, up from 53.6 in April.

Bank of Japan (BoJ) Governor Kazuo Ueda reaffirms that the direction of the monetary policy remains on the upside, while speaking at the Kisaragi-kai Meeting on Wednesday.