Sentiment deteriorated and financial markets relapsed in May on the back of a hawkish re-pricing of central bank policy expectations, a sluggish global growth landscape, and debt ceiling jitters in the United States. However, the end of the month brought some good news on the latter. After weeks of negotiations, President Biden and Speaker McCarthy reached a deal to suspend the debt ceiling and averted a US default. Still, while investors breathed a sigh of relief in response, focus has swiftly reverted back to the precarious environment of persistent inflation and looming recession risks.