TD Securities’ Prashant Newnaha now expects the Reserve Bank of New Zealand (RBNZ) to start raising the Official Cash Rate (OCR) from the September 2026 meeting, having previously forecast the first move in February 2027.

EUR/CAD pares its recent gains from the previous day, trading around 1.6000 during the European hours on Tuesday. The currency cross depreciates as the commodity-linked Canadian Dollar (CAD) holds ground against the Euro (EUR) due to higher oil prices.

Commerzbank’s Tatha Ghose writes that Polish core inflation has firmed but remains manageable, driven mainly by external energy shocks rather than domestic policy errors.

Nomura’s Josie Anderson, George Buckley, Andrzej Szczepaniak and David Seif highlight a softer UK labour market, with falling payrolls, rising unemployment and weaker vacancies. They stress that labour data lag the Iran war shock, but see current softness as the starting point.

The publication of Canada’s April Consumer Price Index (CPI) figures on Tuesday will be the focus of attention.

AUD/JPY has offered its recent gains registered in the previous day, trading around 113.40 during the early European hours on Tuesday.

BNY strategists John Velis and David Tam have abandoned their call for two Federal Reserve rate cuts this year, citing persistent disruption in the Strait of Hormuz and a labor market that has not weakened as expected.

Antje Praefcke at Commerzbank highlights that the Norwegian Krone (NOK) has outperformed Euro (EUR) and US Dollar (USD), helped by Norway’s status as a net Oil and gas exporter during the Iran war.

OCBC’s FX Strategist Christopher Wong highlights that Asian FX has seen a modest stabilisation after an oil- and rates-led sell-off, helped by softer Brent and a pause in United States (US) yield gains.

Danske Research Team observes that equities moved lower on US tech underperformance and a defensive rotation, though most sectors ended higher and VIX declined.

Commerzbank’s Antje Praefcke notes that rising Oil prices linked to renewed Middle East tensions are lifting US inflation and pushing back expectations for Fed rate cuts, with markets even contemplating a hike by mid‑2027.

According to the Islamic Republic News Agency (IRNA), Iran's deputy foreign minister said on Tuesday that lifting sanctions, releasing frozen funds, and ending the United States (US) blockade are major demands included in Iran's recent proposal to the US.

United Kingdom Claimant Count Rate unchanged at 4.4% in April

The United Kingdom’s (UK) ILO Unemployment Rate rose to 5.0% in the three months to March after reporting 4.9% in the previous reading, data published by the Office for National Statistics (ONS) showed on Tuesday.

United Kingdom Employment Change (3M) climbed from previous 25K to 148K in March

United Kingdom ILO Unemployment Rate (3M) registered at 5% above expectations (4.9%) in March

United Kingdom Claimant Count Change came in at 26.5K below forecasts (27.3K) in April

United Kingdom Average Earnings Excluding Bonus (3Mo/Yr) meets expectations (3.4%) in March

United Kingdom Average Earnings Including Bonus (3Mo/Yr) registered at 4.1% above expectations (3.8%) in March

The AUD/JPY cross attracts some sellers to around 113.45 during the early European session on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) following Japan’s upbeat Gross Domestic Product (GDP) report.

Japan Tertiary Industry Index (MoM) came in at -0.2%, above forecasts (-0.4%) in March

Japan Industrial Production (YoY) increased to 2.4% in March from previous 2.3%

Japan Capacity Utilization dipped from previous -0.1% to -1.2% in March

Japan Industrial Production (MoM) came in at -0.4%, above expectations (-0.5%) in March

The GBP/USD pair loses ground to near 1.3415 during the Asian trading hours on Tuesday. The British Pound (GBP) edges lower against the Greenback amid UK political turmoil. Traders will take more cues from the UK employment report, which is due later on Tuesday. 

Japan's Economy Minister, Minoru Kiuchi, said on Tuesday that the government will respond swiftly while monitoring the economic impact of the Middle East conflict and price hikes on households and businesses.

The Reserve Bank of Australia (RBA) published the Minutes of its May monetary policy meeting this Tuesday, which showed that eight members saw case for rate hike as strongest and one member preferred to await further data. 

Australia Westpac Consumer Confidence rose from previous -12.5% to 83% in May

Japan Gross Domestic Product Deflator (YoY) above expectations (3.1%) in 1Q: Actual (3.4%)

The Japanese economy expanded 0.5% over the quarter in the first quarter (Q1) of 2026, the preliminary report published by the Cabinet Office showed on Tuesday. This reading followed a 0.3% growth recorded in Q4 of 2025 and beat market expectations of a 0.4% expansion.