Brent crude futures slid below $81 per barrel on Friday, hitting a three-month low and facing a more than 3% drop for the week, due to worries about demand and rising US stockpiles. The stronger US PMI data dampened expectations for Federal Reserve interest rate cuts, hurting the US economy's outlook and energy demand. Also, some Fed officials mentioned a willingness to raise rates in case of inflation spikes, as per the latest FOMC minutes. Additionally, EIA data showed a surprise uptick in US crude inventories last week, with supplies at Cushing, Oklahoma hitting a peak since July. However, there was a positive note on US gasoline demand, hitting its highest levels since November, offering some support to oil prices ahead of the US summer driving season. As attention shifts to the rescheduled OPEC+ meeting on June 2 (previously set for June 1), market participants await potential output cut extensions by major producers to tackle global oversupply concerns and prop up prices.

Stocks in Europe were lower on Friday, with the pan-European STOXX 50 falling 0.8% and the STOXX 600 losing 0.7%, tracking a global cautious mood, as prospects that the Fed will keep interest rates elevated for some time weighed on investors' mood. In Europe, the ECB is still expected to cut rates next month, but stronger-than-expected PMIs for Germany and the Eurozone raised doubts about any move beyond June. All industry sectors were falling, but tech and utilities led the losses. Among major companies, ASML Holding, SAP, Iberdrola and Enel were all falling more than 1%. On the week, the STOXX 50 lost 1.3% and the STOXX 600 went down 1%, its first weekly decline in three.

Producer prices in Spain fell by 6.6% year-on-year in April 2024, following an 8.2% slump in March, marking the 14th straight month of producer deflation. Main downward pressure continued to come from energy (-20.5% vs -24.7% in March), followed by intermediate goods (-4% vs -4.9%). Conversely, increases were observed for consumer goods (3.3% vs 3.9%) and capital goods (2% vs 2.3%). Excluding energy prices, the PPI index was flat in April, after decreasing by 0.1% in the prior month. Compared to the previous month, producer prices went down by 0.2%, after a 2.2% decline in the month before.

The manufacturing climate indicator in France fell to 99 in May 2024, compared to April’s and market forecasts of 100. The latest reading was also below its long-term average and marked the lowest reading in four periods, as manufacturers’ evaluations turned negative for past production (-2 vs 1 in April), and expected trend in selling prices (-1 vs 3), while it became more pessimistic for general production (-9 vs -7). At the same time, assessments declined for expected change in workforce (3 vs 4), and personal production (1 vs 8), while the gauge for perceiving economic uncertainty increased (28 vs 27). On the other hand, views slightly improved for overall order books (-17 vs -19), and foreign orders (-8 vs -11).

The annual inflation rate in Japan fell to 2.5% in April 2024 from 2.7%, moderating for the second straight month. Food prices rose the least in 19 months (4.3% vs 4.8% in March) while cost also eased for furniture & household utensils (2.5% vs 3.2%), healthcare (1.2% vs 1.5%), and culture (6.2% vs 7.2%). In addition, education prices fell for the first time since May 2021 (-0.9% vs 1.3%). By contrast, inflation was stable for clothes (at 2.2%), housing (at 0.6%), and miscellaneous (at 1.1%). Meantime, cost of transport accelerated (2.7% vs 2.4%) amid a strong upturn in communication prices (1.0% vs 0.2%). On fuel and light, prices dropped the least in 14 months (-1.1% vs -1.7%), mainly due to gas (-4.2% vs -7.1%) as the energy subsidy would fully end in May. The core inflation rate dropped to 2.2% from 2.6%, matching market forecasts and pointing to the lowest print since January. Monthly, the CPI rose by 0.2%, the same as in March, remaining at the steepest pace since last October.

The annual inflation rate in Malaysia was at 1.8% in April 2024, holding steady for the third straight month and matching market forecasts. It remained at the highest level since October 2023, amid further rises in prices of food (2.0% vs 1.7% in March), alcoholic beverages and tobacco (0.5% vs 0.5%), housing (3.0% vs 3.0%), furnishing, household maintenance (1.0% vs 0.9%), health (2.3% vs 2.1%), transport (0.8% vs 1.3%), recreation (1.5% vs 1.6%), education (1.4% vs 1.5%), restaurants (3.5% vs 3.0%), and miscellaneous goods & services (3.1% vs 2.6%). At the same time, prices continued to fall for clothing (-0.3% vs -0.2%) and communication (-2.5% vs -2.4%). Headline inflation for 2024 is expected to hold around 2 to 3.5%, compared with last year's 2.5%. Core consumer prices, excluding volatile fresh food items and administered costs, increased 1.9% yoy, the steepest pace in four months, after a 1.7% rise in March. On a monthly basis, the CPI rose 0.2%, following March's 0.1% gain.