Pips for Breakfast: May 10, 2026

The US and Iran are talking again, which usually lasts about as long as a retail trader's first funded account.

On This Day

Back in 2010, the EU agreed on a nearly $1 trillion rescue package to stop the Euro from disintegrating. It was meant to be the final word on the debt crisis. It wasn't. Markets learned that "unlimited" is a relative term.

The Play

Short AUD/USD on China weakness: China drops its CPI and PPI numbers tonight at 21:30 UTC. With forecasts sliding, the "global recovery" narrative looks like a leaky faucet. If CPI misses the 0.9% estimate, the Aussie will likely be the first to feel the chill when markets open this evening. Look for a move toward the recent lows as the Asian session picks up the pieces.

Long USD/JPY on geopolitical noise: Iran is currently threatening a military response to US maritime actions. Usually, this would be a "buy the Yen" moment, but with US jobs growth surprising to the upside last week, the Dollar has the yield advantage. If things get loud in the Strait of Hormuz, the greenback is the likely winner of the "least scary place to hide" contest.

What's on Deck

CNY CPI and PPI (21:30 UTC): This is the only show in town tonight. It's a pulse check on the world's factory. Low numbers mean low demand. Low demand means the "Sell in May" crowd gets more ammunition.

US-Iran Diplomacy: Reports say talks might resume next week, while simultaneously, Iran is mentioning military responses. It's a "choose your own adventure" book where every ending involves higher oil prices. Keep USD/CAD on your radar for any sudden moves in crude.

The Data Behind the Patterns View Packages →

Quick Pips

EUR/USD: European indices closed lower on Friday. The pair looks heavy as the seasonal equity weakness starts to bite.

GBP/USD: Cable is stuck. Last week's US jobs beat is fighting against a cooling UK sentiment. It's a tug of war where both teams are wearing slippers.

University of Michigan Sentiment: The May estimate came in at 48.2 against a 49.5 forecast. The US consumer is officially grumpy. This usually doesn't end well for risk-sensitive pairs.

Why Your P&L Cares

We're officially in the "Sell in May" window. It's a cliché, but like fruitcake at Christmas, it keeps showing up because someone, somewhere, believes in it. Historically, the second week of May sees a rotation out of equities and into the safety of the USD. This year, that trend is getting a boost from a US labor market that refuses to cool down and a consumer that's losing hope.

When markets open this evening, we'll see if the weekend's geopolitical threats were just noise or if the maritime blockade talk has teeth. If the latter, expect a gap open in the safe havens. Historical patterns for this week suggest that early week optimism is often a trap for bulls before the mid-week reality check.

The Bottom Line

The market opens in a few hours with a choice between a geopolitical headache and a Chinese deflationary slump. Trade accordingly. Now go make some pips. You're fed.