Daily Market Outlook, May 8, 2026 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute — Risk Rally Meets Hormuz Reality

The week ends with risk appetite under pressure as Middle East escalation reintroduces the energy-supply shock markets had started to fade. The MSCI All Country World Index slipped 0.3%, while MSCI Asia fell 1.1%, reversing Thursday’s record close after Wall Street weakened. The setback is not yet a trend-breaker — Asian equities remain on course for a fifth straight weekly gain, the longest run since January — but it does challenge the clean “Iran deal / AI rally / soft landing” narrative that had driven global indices to new highs.

Oil is again the macro transmission channel. Crude surged after US forces responded to Iranian attacks on naval vessels in the Strait of Hormuz, reviving concerns over disruption to one of the world’s most important energy arteries. That matters because the recent equity rally partly relied on the assumption that the geopolitical risk premium would keep bleeding out of oil. If Brent stays elevated, the market has to reprice the growth/inflation mix: higher energy costs hit consumers, complicate disinflation, and limit the scope for central banks to lean dovish even if activity softens.

Cross-asset price action is more cautious than disorderly. S&P 500 futures are up 0.2%, suggesting dip-buying has not disappeared, while the Dollar is broadly stable near pre-conflict levels as investors still attach some probability to a diplomatic resolution. Treasuries are also calm, with the 10-year yield holding around 4.39%, though it is still 2bp higher on the week as oil-driven inflation concerns linger. Gold edging up toward $4,710/oz reflects a modest safe-haven bid rather than outright panic. In short, this is not a dash for cash; it is a reassessment of how much geopolitical premium belongs in risk assets.

The UK adds its own domestic risk layer, with local election results arriving through the session and gilts likely to digest the political signal in real time. Early results are broadly in line with expectations but uncomfortable for the government: Labour is down a net 247 seats with 40 of 136 councils declared, while the Conservatives are also down 127. Reform is the early beneficiary, up 335 seats by 7am, with the Lib Dems and Greens making smaller gains. The count is still incomplete, particularly in areas where Labour-to-Green leakage may be more visible, so the full scale of the political damage will only become clearer later in the day.

For markets, the key question is whether the election result increases fiscal risk. Labour figures have so far avoided open leadership speculation, though Polymarket odds have moved against Starmer, putting the probability of his exit by end-June around evens. If the final results support the view that the government is weakening, gilts may need to reflect a less stable fiscal and political situation, in addition to already difficult fundamentals: sticky inflation, high debt-service costs, and limited fiscal headroom. The global story is oil and Hormuz; the UK story is whether political pressure further erodes confidence in the policy mix.

Overnight Headlines

• US Labour Market Faces Key Test With Hiring Momentum Set To Slow

• US, Iran Trade Fire In Strait Of Hormuz; Each Claims Other Shot First

• US Sec Rubio Approves $25.8B Weapons Push For Mideast Nations

• Trump Gives EU Until July 4 To Ratify Deal Or Risk Higher Tariffs

• Trump’s 10% Global Tariffs Declared Unlawful By US Trade Court

• Fed’s Kashkari Says Next Rate Move Uncertain Because Of Iran War

• Japan Intervened In FX Again During May Holidays, Source Says

• Japan’s Real Wages Rise For Third Month, Offering Relief For BoJ

• South Korea’s Current Account Surplus Surges To Record On Chips

• SK Hynix Flooded With Big Tech Firms’ Demand To Secure Chip Supplies

• Sony Annual Profit Rises 13.4%, Below Analyst Estimates

• Nvidia To Invest Up To $2.1B In IREN AI Data Centre Deal

• Anthropic Weighs Deal For Near $1T Valuation As Revenue Surge

• AWS: North Virginia Data Centre Overheating; Coinbase Impacted

• Macquarie Profit Tops Estimates On Commodities, Markets Activity

• CoreWeave Signals Higher CapEx As Component Costs Rise, Shares Fall

• Airbnb Boosts 2026 Revenue Outlook on Increased Bookings

• BMW, Mercedes Struggle To Make Luxury Cars With Chinese Xteristics

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries and is more magnetic when trading within the daily ATR.)

• EUR/USD: 1.1800 (EU1.77b), 1.1750 (EU1.57b), 1.1900 (EU1.31b)

• USD/JPY: 155.00 ($653.2m), 157.00 ($620.8m), 158.00 ($587.9m)

• AUD/USD: 0.7100 (AUD1.14b), 0.7400 (AUD1.08b), 0.7200 (AUD881.9m)

• USD/CAD: 1.3600 ($790.7m), 1.3500 ($469m), 1.3700 ($432.3m)

• GBP/USD: 1.3600 (GBP1.35b), 1.3550 (GBP483.8m), 1.2700 (GBP397m)

• USD/CNY: 6.8000 ($307m)

• NZD/USD: 0.5935 (NZD563.4m)

• USD/KRW: 1480.00 ($378.5m)

CFTC Positions as of May 1, 2026: 

• Equity fund speculators reduced their net short position in the S&P 500 CME by 5,811 contracts, totaling 396,442. Meanwhile, equity fund managers decreased their net long position by 21,368 contracts to 999,182. 

• Speculators also adjusted their positions in Treasury futures: they cut the net short position in 5-year futures by 11,345 contracts (1,521,405 total), increased the net short position in 10-year futures by 48,166 contracts (839,137 total), trimmed the 2-year net short position by 34,090 contracts (1,709,263 total), and reduced the UltraBond net short position by 6,002 contracts (294,285 total). In contrast, they raised the net short position in Treasury bonds by 29,869 contracts (113,655 total). 

• Bitcoin's net long position stands at 2,392 contracts. The Swiss franc shows a net short position of -35,221 contracts, the British pound -60,639 contracts, the euro has a net long position of 35,712 contracts, and the Japanese yen has a net short position of -102,059 contracts.

Technical & Trade Views

SP500

• Daily VWAP Bullish

• Weekly VWAP Bullish

• Above 7270 Target 7430

• Below 7190 Target 7100

DXY

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 98.85 Target 99.50

• Below 98.50 Target 96.12

EURUSD 

• Daily VWAP Bullish

• Weekly VWAP Bullish

• Above 1.1785 Target 1.18.50

• Below 1.1750 Target 1.1590

GBPUSD 

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 1.3445 Target 1.3885

• Below 1.34 Target 1.3320

USDJPY 

• Daily VWAP Bearish

• Weekly VWAP Bearish

• Above 160 Target 161

• Below 159 Target 152

XAUUSD

• Daily VWAP Bullish

• Weekly VWAP Bearish

• Above 4600 Target 5000

• Below 42700 Target 3600

BTCUSD 

• Daily VWAP Bearish

• Weekly VWAP Bullish

• Above 82.5k Target 86k

• Below 80.5k Target 78k