Today's Global Economy Pulse
Australia's April CPI eases to 4.2% as core inflation hits 2024 high
Australia’s consumer price index slipped to a 4.2% annual rise in April, missing the 4.4% consensus as a temporary fuel excise cut trimmed transport costs. At the same time, the trimmed‑mean core inflation gauge rose to 3.4% year‑over‑year, the highest level since late‑2024, keeping pressure on the Reserve Bank of Australia’s inflation target.
Benefits of China’s Non-Reactive Strategic Posturing in the Middle East War and Emerging Concerns
China’s largely non‑reactive stance in the Middle East war has allowed Beijing to study U.S. and Israeli military tactics while keeping its own forces focused on the Indo‑Pacific. The conflict highlighted the effectiveness of low‑cost drones and short‑range missiles, exposing gaps in America’s high‑tech, carrier‑centric strategy. At the same time, China’s control over critical minerals and renewable‑energy supply chains has turned the war‑driven price spikes into a commercial advantage. Beijing has also used the crisis to present itself as a reliable partner for Gulf states wary of U.S. security guarantees.
How Beijing Plans to Take Taiwan — And Why It’s Not Just About Military Force
Beijing’s Taiwan strategy treats the island as a political problem, using economic dependence, media influence, and disinformation to erode resistance before resorting to force. China’s $270 billion trade ties and targeted bans on Taiwanese products create a structural lever, while sophisticated...
UK's Starmer and Trump Discuss 'Urgent Need' To Restore Shipping in Strait of Hormuz
British Prime Minister Keir Starmer and U.S. President Donald Trump discussed the urgent need to resume commercial traffic through the Strait of Hormuz during a call on April 26. The conversation highlighted a joint initiative with French President Emmanuel Macron to safeguard...
China’s Zero‑Tariff Policy Fuels African Export Surge at Zimbabwe Trade Fair
China will waive tariffs on goods from 53 African countries starting May 1, prompting Ethiopian, South African and Mozambican firms at the Zimbabwe International Trade Fair to gear up for a flood of Chinese orders. Exporters say the move could lift...
Will Kevin Warsh Trumpify the Federal Reserve?
Kevin Warsh, a former Federal Reserve governor and close Trump ally, is poised to join the Fed board as the new chair seeks a more aggressive stance on interest rates. Warsh has publicly echoed President Trump’s criticism of high rates...
Germany’s Debt Spiral Deepens as Berlin Plans €2.7 Trillion in Bonds by 2029
Germany’s finance ministry unveiled a draft budget that would push visible sovereign debt to €2.7 trillion (about $2.9 tn) by 2029, with nearly one‑third of the €630 billion current spending financed by borrowing. The Federal Court of Auditors and the Ifo Institute warned...
Trump Cancels Envoys to Islamabad, Halting Iran Talks Amid Blockade
President Donald Trump ordered the cancellation of a U.S. delegation to Islamabad, ending a second round of back‑channel talks with Iran. The move came as Washington’s naval blockade on Iranian ports is estimated to cost Tehran $400 million a day, while...
EU Approves $105 Billion Loan to Ukraine, Deepening Financial Commitment
The European Union formally approved a €90 billion ($105 billion) loan package for Ukraine, the bloc's largest single‑year financial aid to the war‑torn country. The decision came after Hungary lifted its veto, allowing the 20th round of EU sanctions against Russia to...
India's FX Reserves Rise to $703.3 Billion as West Asia Tensions Persist
The Reserve Bank of India reported a $2.3 billion increase in foreign exchange reserves, bringing the total to $703.3 billion for the week ended April 17. The rise comes as the RBI steps up dollar sales to support the rupee amid heightened geopolitical...
Mercosur‑EU Free Trade Deal Takes Effect May 1, Creating $22 Trillion Bilateral Bloc
The Mercosur‑EU free trade agreement becomes active on May 1, forming the world’s largest bilateral trade bloc with a combined market of 720 million people and roughly $22 trillion in GDP. The pact will gradually eliminate tariffs on about 95% of goods, boosting...
G‑7 Central Banks Hold Rates Steady, Keeping Bond Yields on Edge
The Federal Reserve, European Central Bank, Bank of England, Bank of Japan and Bank of Canada are expected to leave policy rates unchanged this week, a stance that will keep short‑term bond yields flat while investors watch for inflationary pressure...
Cameco's Uranium Surge Gains Traction as Oil Prices Spike on Middle East Conflict
Cameco's shares have surged more than 200% over the past year as soaring oil prices from the Middle‑East conflict spotlight nuclear power as a clean‑energy alternative. The uranium producer’s recent 50% stake in Westinghouse and rising uranium prices have boosted...
Middle East Shipping Crisis Elevates China-Europe Railway’s Profile
The China‑Europe railway network has transformed from a niche experiment into a commercial freight alternative, linking 235 cities across 26 European nations with more than 120 Chinese hubs. Driven by pandemic‑induced air‑freight shortages and maritime congestion, annual train trips doubled...
US Leverage Grows as Europe Faces Defense, Energy Reset
The longer the Strait of Hormuz is closed, the more negotiation leverage the US has over the future of NATO and European energy supply chains. The US could ironically be the winner (even in a war-losing scenario) in the future, simply...
Investors Dive Back Into Frontier Markets After April Rally
Frontier market assets rebounded strongly in April, with the MSCI Frontier Markets Index climbing about 10% in dollar terms, its best monthly gain since 2009. Bond issuances saw heightened demand, highlighted by Congo’s debut sale attracting bids four times its...
The $11 Trillion Engine Beneath the $110 Trillion Economy
The article argues that the $110 trillion global economy rests on a far smaller $11 trillion physical foundation of energy, raw materials, and chemicals. It breaks down this base into hydrocarbons ($1.6‑2 trillion), chemicals ($6.5‑6.8 trillion), metals ($1.2‑1.3 trillion) and food commodities ($1.7‑2.2 trillion). Chemicals, at...
China Warns EU to Remove Firms and Citizens From Russian Sanctions List
China’s Ministry of Commerce demanded the EU drop 27 Chinese firms and individuals from its latest sanctions list tied to Russia’s war in Ukraine, warning that the bloc would bear the consequences of non‑compliance. The EU justified the measures, accusing...
Beijing Lashes Out at EU After Chinese Firms Included in Latest Russia Sanctions
The European Union approved its 20th sanctions package against Russia, extending restrictions to Chinese companies accused of facilitating Moscow's war economy. Beijing’s commerce ministry issued a strongly worded protest, labeling the move “brazen” and warning the EU of consequences if...
What To Expect From Powell’s Fed Chair Swan Song
Jerome Powell faces what could be his final public remarks as Federal Reserve Chair ahead of this week’s FOMC meeting. The central bank is expected to keep policy rates unchanged while the March core PCE inflation figure is projected at...
Economy Could Suffer for Eight Months After Iran War Ends, Minister Says
Chief Secretary Darren Jones warned that the fallout from the Iran‑Israel‑US conflict will keep UK energy, food and airline prices elevated for at least eight months after the Strait of Hormuz reopens. The blockage of this key shipping lane has...
Hungary's Magyar to Meet EU's Von Der Leyen for Talks on EU Funds This Week
Hungary’s newly elected prime minister Peter Magyar will travel to Brussels on Wednesday for informal talks with European Commission President Ursula von der Leyen. The meeting aims to unlock roughly €10 billion (US$11.7 billion) of pandemic‑recovery funds frozen under Viktor Orban’s rule. Magyar’s centre‑right Tisza...
China Backs Myanmar’s Push to Ease Diplomatic Isolation, Stamp Out Telecoms Scams
China’s foreign minister Wang Yi pledged diplomatic backing for Myanmar’s newly installed junta, promising to help the country re‑engage with ASEAN and other multilateral platforms. The talks also included a commitment to eradicate telecom‑fraud and online gambling networks that have...
New Zealand to Sign FTA with India Tomorrow; Luxon Calls It ‘Once-in-a-Generation Deal’
New Zealand will sign a free‑trade agreement with India on Monday, a deal Prime Minister Christopher Luxon called “once‑in‑a‑generation.” The pact opens New Zealand exporters to India’s 1.4 billion‑person market, the world’s third‑largest economy. Luxon highlighted gains for key sectors such as kiwifruit,...
Hormuz Closure Through 2026 Triggers Inflation Surge
Baker Hughes warns Hormuz to stay shut thru all of 2026 That means the global economy grinds to a halt Tighter supply → higher inflation → no rate cuts "You get massive inflation, you just get really real, real inflation spike," says financial...
FCC Bans Sale of Non‑U.S. Made Home Routers, Upending Global Networking Market
The U.S. Federal Communications Commission has prohibited the sale of any new home router models that are not built in the United States. The ban, effective immediately, requires manufacturers to submit detailed on‑shoring plans or face exclusion from the U.S....
Vanguard's VEU ETF Gains Attention as Defensive Play Amid Global Uncertainty
Vanguard highlighted its FTSE All‑World ex‑US ETF (VEU) as a defensive diversification tool while announcing cash distributions for its Canadian ETFs. The fund’s 0.04% expense ratio, 2.9% dividend yield and exposure to 3,760 non‑U.S. stocks make it attractive amid geopolitical...
Azerbaijan Manat Holds Steady at 1.7000 per USD in Weekly Review
The Central Bank of Azerbaijan reported that the manat's exchange rate against the US dollar remained flat at 1.7000 this week, marking a rare stability episode. Small movements were noted against the euro, Russian ruble and Turkish lira, underscoring a...
US Begins Mine‑Clearing Operations in Strait of Hormuz, Targeting $5 Trillion Oil Flow
The United States announced it is clearing Iranian‑laid mines from the Strait of Hormuz, with the Pentagon estimating a six‑month timeline. The effort seeks to reopen a chokepoint that moves roughly a fifth of world oil and LNG, while Iran...
Polls Show Record Discontent as Iran War Fuels U.S. Gas Prices and Economic Anxiety
Recent polls reveal a surge in American pessimism over the economy, with 47% rating conditions poor and 73% saying the outlook is worsening. The backdrop is a costly Iran war driving U.S. gasoline prices higher, while President Trump touts tax...
South Korea's KOSPI Surpasses 6,500, Powered by Tech Earnings and Fed Outlook
The KOSPI topped 6,500 for the first time, buoyed by robust earnings from Samsung Electronics and other big‑tech firms, while foreign investors poured in. Analysts say the rally reflects profit momentum outweighing geopolitical risks and a hopeful Fed stance.
Top Links 1084 The New Normal in America's Political Economy. Syrian Property Deals & the Trumps. Burial at Sea and...
Adam Tooze’s latest "Top Links" note flags a shift in America’s political economy, beginning with U.S. inflation settling above the long‑held 2 percent target, a trend highlighted by Reuters analyst Mike Nolan. The piece also touches on opaque Syrian property deals...
Trump’s AI Chip Reversal Sets $50B China Trap
America just broke every rule of international trade: In 2022, NVIDIA was locked out of China's booming AI market. Yesterday, Trump lifted the ban on one BRILLIANT condition. When AMD saw the profits? They jumped in too. Here's the $50B trap Trump just set...
U.S. Sanctions Zigzag in New World of Economic Warfare
Treasury Secretary Scott Bessent announced the United States would not extend the waiver permitting sales of Russian oil, with the existing exemption set to expire on May 16. After a brief 30‑day reprieve, the Treasury confirmed the waiver will not be...
Kenyan Banks Project Surge in Bad Loans on Impact of Geopolitical Tensions
Kenyan banks warn that non‑performing loans (NPLs) could climb above 16% of gross loans this year as fuel price spikes and Middle‑East tensions strain the economy. The Kenya Bankers Association notes NPLs have already edged up to 15.6% in March...
Starmer Credibility Dip Fuels Gilt Short‑sell Recommendation
Starmer faces credibility hit after Mandelson appointment; civil service strained, governance risk ahead of local elections may lift GBP and gilt volatility. Trading insight: sell short gilts. — Viktor Kopylov, PhD, CFA. More insights: t.me/si14Kopylov
Kevin Warsh Poised to Become 17th Fed Chair
Kevin Warsh is now on track to become the 17th chair of the Federal Reserve when Jay Powell's term concludes on May 15. https://t.co/mPaGC9If1n
Iran Refuses to Relinquish Strait of Hormuz Control
I am deeply shocked to learn that Iran has no intention of returning control of the Strait of Hormuz https://t.co/xQ2ZBHZVWi
China Shifts From Goods to Knowledge-Intensive Service Exports
FT op-ed: “No nation in the world exports as much merchandise as China. But having conquered global trade in goods, it is now rapidly moving up the international ranks as a leading exporter of knowledge-intensive services.” https://t.co/1hEm7NN3Bm
USD Swap Lines Weaponized: Past Freeze Boosted CIPS, Gold
RE: “Weaponizing USD swap lines” - last time the USD system rails were weaponized (2022 Russia FX reserves frozen), CIPS payments more than doubled in 2 years, and gold rose 3x in 4 years. Let’s watch. https://t.co/ydeBLxbx6r
Fed Expands QE Despite Record Markets and Persistent Inflation
The stock market is at an all-time high. Credit spreads are near all-time lows. And inflation has been above the Fed's target level for 61 consecutive months, averaging 4% per year since 2019. So why is the Fed expanding its balance sheet (QE)? Video:...
1-Year Inflation Swap Peaks; Stocks Hit All-Time Highs
The 1-year inflation swap is now at the highest level since last September Stocks all-time highs. @augurinfinity https://t.co/HrFvA54Sd7
Global Demand, Not US, Drives China's Export Surge
“Chinese exports are finding genuine new markets, not just new routes to America…Clearly the rest of the world wanted more Chinese items, too. American demand cannot explain away the bulk of China’s export boom over the past year.” https://t.co/HIZ20v7gcn
Eurozone GDP Steadies at 0.2%, Spain Leads Growth
Initial GDP readings due on Thursday are expected to reveal growth holding steady at 0.2% in the euro zone, with expansion in every large country, but led as usual by Spain https://t.co/856YLrOZ6o via @CraigStirling https://t.co/gm7VxRVbui
Oil Won’t Hit $150–200; US Iran Blockade Proving Effective
Here's my discussion with @paulkrugman from March 19 where I argued oil prices won't go to $150 or $200 and recommended the US blockade Iran. It's as relevant to global oil markets today as it was back then. The blockade...
Brent Surges 60%, Fuel Shortages Hit Global Markets
This week will bring a drumbeat of physical shortage stories. Here's the deal. Brent is up 60% from before the war. That's more than 3x the rise after Russia's invasion of Ukraine. The SoH is 3x Russia's oil exports to...
America Isn't the New Edwardian Britain, Reject 1914 Analogies
Hard-working hegemon? Why 21st-century America is not like Edwardian Britain. Thanks to the Hobsonian vision of @michaelxpettis and @M_C_Klein and the pervasiveness of the Thucydides trap argument we are haunted right now by analogies to the per 1914 moment. https://t.co/1lYqmbDzDY
Dollar's Surge Temporary; Peace Deal Could Cut 3%
The Dollar has risen sharply due to safe haven inflows, but as soon as we get a peace agreement, those flows will reverse. My best guess is that the Dollar will fall immediately by 3 percent on such an agreement....
Officially Open Strait, Yet Tankers Remain Stuck?
🔷If both Iran and the US officially announce the Strait of Hormuz is open, will the stranded tankers actually cross? 🔷Exactly. 🔷I rest my case.
Extreme Weather Fuels New Wave of Climate‑Driven Inflation
From food to insurance, prices are rising because of extreme weather, turning climate change into a new and growing source of inflation. Read how economists and central bankers are getting better at linking temperatures to price increases here: https://t.co/CUAF4152SD 🎨: Bryson Lee...
Iran Conflict Disrupts Global Food Supply Chains
How the Iran war is shaking up food supply chains https://t.co/KEOnyiHmdC via @AggieDeSousa @ElThorn22 @petrkozlov https://t.co/oFMf3yW1aI