Today's news headlines:

‘Sunak orders plan for windfall tax on electricity generators’. UK Chancellor Rishi Sunak is expected to push through plans to introduce a tax on energy companies’ excess profits as cost-of-living pressures begin to hurt consumers. With gas prices soaring following supply chain bottlenecks and the Russia-Ukraine conflict, energy companies have benefitted from rising sale prices due to falling supply. The added tax is contingent on energy companies failing to ramp up their investment commitments, with a final announcement expected at the start of June. (Financial Times)

‘Commodity funds stage revival as investors seek inflation hedges’. As inflation ticks higher across major economies, investors have been building positions in commodity funds as an inflation hedge. Agricultural commodity funds have been most in favour, drawing $24.5bn in flows so far this year as Russia’s invasion of Ukraine has pushed grain and fertiliser prices higher. (Financial Times)

Today

Asian markets slipped overnight, dragged down by tech, with the Hang Seng Tech Index falling 4%. US markets managed gains yesterday following weeks of losses, and futures are pointing lower this morning. WTI is trading just below $109 per barrel in early trade, while European shares opened in the red.

Events

Japanese flash Manufacturing Purchasing Managers’ Index: 53.2 (est. 53.8)
German flash Manufacturing and Services PMI: 8:30AM
UK flash Manufacturing and Services PMI: 9:30AM
US flash Manufacturing and Services PMI: 2:45PM
US Federal Reserve Chairman Jerome Powell speaks: 5:20PM
UK Monetary Policy Committee member Silvana Tenreyro speaks: 6:15PM
European Central Bank President Christine Lagarde speaks: 7:00PM​​​​​​​

Interbank rates:
​​​​​​​
GBP/USD – 1.2594
GBP/EUR – 1.1744
EUR/USD – 1.0723
USD/CAD – 1.2784

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