Today's Global Economy Pulse
Australia's April CPI eases to 4.2% as fuel cuts mask rising core inflation
Australia's consumer price index slowed to a 4.2% annual increase in April, below the 4.4% forecast, driven by a temporary fuel excise cut that lowered transport costs. However, the trimmed‑mean core inflation gauge rose to 3.4% year‑over‑year, the highest since late‑2024, keeping pressure on the Reserve Bank of Australia to maintain its inflation target.
10-Year Yield Eyes 4.75 After Violent Breakout, Opening Risk Toward 5%
U.S. 10‑year Treasury yields surged past the 4.75% mark, reaching 52‑week highs and the strongest levels since early 2025. The breakout was sparked by geopolitical tension after President Trump’s China trip failed to secure an Iran breakthrough, keeping Brent crude near $110 and stoking inflation concerns. Combined with stubborn CPI and PPI data, markets now price a roughly 60% chance of an additional Federal Reserve hike before year‑end. Technical charts show the next resistance at 5.07%, a level that could intensify pressure on equities and emerging‑market currencies.
Low Money Growth Keeps Malaysia Inflation Near Target
Malaysia's March inflation is 1.72%/yr. Malaysia's money supply (M3) is growing at ONLY 5.5%/yr. That's well BELOW Hanke's Golden Growth Rate of 7.33%/yr, consistent with hitting Malaysia's inflation target of 3%/yr. THE INFLATION STORY = A MONEY SUPPLY STORY. https://t.co/SrGX0AEZwf
Zero‑rate Era Produced Massive Bond Issuance Worldwide
Where are they now? Globally, bonds issued when interest rates were near ZERO, 2015–2021, though total global long-term fixed-income issuance (per SIFMA) was higher (~$158 trillion cumulatively). - Grok https://t.co/XCQZy1Rgxn
Measuring Capital Account Openness: Why Intensity Matters
The IMF‑backed FinOpen index introduces a granular, intensity‑based measure of capital‑account openness, moving beyond the binary Chinn‑Ito and FKRSU scores. By merging narrative assessments with detailed policy actions, FinOpen assigns a 0‑1 score that reflects both the level and the...
When Energy Shocks Bite Harder: Non-Linear Inflation Dynamics
A new ECB‑backed study shows that euro‑area inflation reacts disproportionately to large energy price shocks, a non‑linear pattern that linear models miss. Using a hybrid Bayesian Additive Regression Trees (BART) and VAR framework, the authors identify medium‑sized shocks in April 2026...
‘Numbers Are Getting Worse’: The Head of the IMF on the Iran War Shock, Inflation, AI Risks, and More
IMF Managing Director Kristalina Georgieva warned that oil prices hovering above $100 a barrel are pushing inflation, borrowing costs and financial‑stability risks higher, threatening a slowdown in global growth. She highlighted the emerging Europe‑Gulf partnership, emphasizing deeper trade, defense cooperation...
Adventures in Conditional Forecasting
Acting CEA Chair Pierre Yared warned that consumer prices will only ease once the war in the Strait of Hormuz ends, but the timing remains uncertain. Market odds on Kalshi place a 50% chance the strait reopens by September 1, which...
Putin Is Pushing for a Blockbuster Oil and Gas Deal in China. Will He Get It?
Russian President Vladimir Putin arrived in Beijing seeking a multi‑billion‑dollar oil and gas partnership with state‑run China National Petroleum Corp. The talks focus on long‑term supply contracts, potential yuan‑based settlements, and a pricing formula tied to global benchmarks. Negotiations come...
Dispatch From Bucharest: NATO’s Center of Gravity Is Shifting Eastward
The Bucharest Nine and Nordic Allies summit in Romania underscored NATO’s eastern and northern flanks as a new strategic center of gravity. Leaders from Central‑Eastern Europe, the Nordics, NATO Secretary‑General Mark Rutte and Ukraine’s President Zelenskyy called for stronger air...
/file/attachments/orphans/ED_570742_361563.jpg)
TRANSPORT COSTS: SA Commuters Cut Back on Groceries as Taxi Fares Rise, Drivers Plead for Subsidies
Fuel prices in South Africa jumped by R6.53 per litre (about $0.34) after the US‑Israel war on Iran began, prompting the South African National Taxi Council to announce fare hikes of R2‑R6 for city trips and R10‑R30 for long‑distance routes....
Bank of Russia Cuts Official Dollar Rate to 72.35 Rubles, Easing Currency Pressure
The Bank of Russia lowered the official dollar‑ruble rate for May 19 to 72.3497 rubles, a drop of 77.78 kopecks from the previous day's level. The move also saw the euro and yuan rates trimmed, underscoring a broader easing of the...
China’s Q2 Growth Stalls as Domestic Demand Falters and Iran War Drives Energy Costs
China’s April figures revealed industrial output rising 4.1% YoY, retail sales edging up just 0.2%, and fixed‑asset investment falling 1.6% in the first four months, signalling a stall in Q2 momentum. Officials blamed a “complex and severe” global environment and...
Investors Fear Another Surge in Inflation
Global bond markets are spiking, with 30‑year government yields hitting record levels: Japan above 4%, the United States over 5%, and Britain nearing 6%. Higher yields translate into steeper borrowing costs for governments and push mortgage rates upward for consumers....
US-China Summit: What Happens Next?
In this episode of ComBank View Economics and Markets, host Mandy Drury and senior geoeconomics analyst Madison Cartwright dissect the outcomes of President Trump's summit with President Xi in Beijing. They note that the agreements were modest—200 Boeing jets, $17 billion...
After the Iran War, the Gulf’s Next Economic Phase Awaits
The Atlantic Council warns that after the Iran‑related conflict, GCC nations must rebuild growth by shifting from oil‑centric models to diversified economies. Disruptions to the Strait of Hormuz highlighted the vulnerability of crude, LNG and chemicals flows, while sovereign wealth...
Political Interference in the Fed Could Backfire, Push Rates Higher: Expert
Johns Hopkins political‑science professor Nicolas Jabko warns that political pressure on the Federal Reserve could backfire, driving inflation and mortgage rates higher. He points to Russia and Turkey, where government interference led to 14.5% and 37% policy rates, as cautionary examples....
OPEC+ and the Business World: What’s the Connection?
OPEC+ production decisions continue to steer global oil prices, creating ripple effects across transportation, manufacturing, consumer spending, and financial markets. When the cartel cuts output, fuel costs climb, squeezing margins for retailers, airlines, and logistics firms. Higher energy prices raise...
Kansas City Fed's Schmid Calls Inflation Top Risk as PCE Near 4%
Kansas City Federal Reserve President Jeffrey Schmid said inflation is the most pressing risk to the U.S. economy, noting the personal consumption expenditures price index was 3.5% in March and may have neared 4% in April. His remarks, delivered at...
Inflation Fears Cloud G7 Economic Agenda as Iran War Persists
The G7 finance ministers and central bank governors met in Paris and pledged to work together to blunt the inflationary impact of the ongoing Iran war on global energy and food prices. They emphasized restoring safe transit through the Strait...
G7 Finance Ministers Commit to Cut China Dependence on Critical Minerals
Finance ministers and central bank governors of the G7 met in Paris and agreed to push EU regulations that would limit any single supplier to 30‑40% of critical mineral purchases. The move, backed by EU Trade Commissioner Maroš Šefčovič, signals...
US Dollar Gains on Inflation Fears and Iran Tensions, Then Stabilizes
The US dollar surged as investors priced in a possible Fed rate hike to curb energy‑driven inflation and weighed Iran‑related geopolitical risk. After President Donald Trump announced a pause to a planned strike on Iran, the currency steadied, with the...
Thailand Posts 2.8% Q1 Growth – Fastest in 11 Years, Yet Oil Shock Fuels Inflation Risk
Thailand’s economy expanded 2.8% year‑on‑year in the January‑March quarter, the fastest pace in 11 years, driven by a surge in exports and private investment. Finance Minister Ekniti Nitithanprapas warned that persistent oil price spikes linked to the Middle‑East war could...
Iran Tensions Lift US Treasury Yields, Curve Steepens to Decade-High Levels
U.S. Treasury yields rose on Monday as stalled US‑Iran talks and rising oil prices revived fears of higher borrowing costs. The 10‑year yield hit 4.60%, steepening the curve and echoing levels last seen in the early 2000s. Market participants linked...
BRICS and De-Dollarization: Is the Global Financial Order Really Changing?
The article examines how BRICS’s recent expansion and growing push for de‑dollarization are reshaping the global financial order. While China, Russia and other members are increasing yuan‑ and ruble‑based trade and diversifying reserves, the U.S. dollar remains dominant because of...
How Global Economic Imbalances Resemble an Ancient Parable
International Monetary Fund deputy chief Gita Gopinath warned that today’s global imbalances echo the U.S.-Japan tensions of the 1980s and the pre‑2008 buildup, but with a different risk profile. She highlighted that surplus economies like China continue to export savings...
Stocks Rise as Bond Yields Normalize for Growth
Everyone is freaking out about rising government bond yields...except for the stock market Rising yields on 30 year govt bonds and rising stock prices in both Japan and the US What if bond yields are just normalizing for a higher growth/inflation world?...
Kevin Warsh’s First Meeting as Fed Chair
Kevin Warsh, President Trump’s nominee, took the helm of the Federal Reserve on May 19, 2026, and convened his first policy meeting amid a volatile macro backdrop. Inflation readings have softened, yet remain above the 2% target, while the labor...
UK Wage Growth Slows and Unemployment Rate Rises as Companies React to Iran War – as It Happened
UK wage growth has decelerated while the unemployment rate jumped to 5%, the highest level in six years. The labour market shed 100,000 jobs, marking the steepest monthly decline since 2020. Economists say the weaker payroll data reduces the likelihood...
EU Mulls Rules to Reduce Reliance on China for Critical Components
The European Union is drafting legislation to curb its reliance on Chinese suppliers for critical components such as semiconductors, rare‑earth minerals and advanced batteries. The European Commission’s proposal introduces stricter import vetting, a €10 billion fund to spur domestic production, and...
US Treasuries Losing the Control They Had
U.S. 10‑year Treasury yields have broken the historic 4.5% support, climbing toward a 4.75% overshoot as real yields rise, not inflation expectations. The surge follows net selling after the US‑China summit and heightened geopolitical tension around the Strait of Hormuz....
Global 10y10y Forward Yields Surge Amid Bond Sell‑off
We've officially reached the "brutal" stage in the global bond market sell-off. The 10y10y forward yield (red) is making new highs all over the place. Japan's 10y10y forward has risen 30 basis points in just a few days. Even Swiss...
Kevin Warsh Takes Helm of the Fed Amid Inflation Pressures
Kevin Warsh is set to be sworn in as chair of the Federal Reserve, inheriting an economy where inflation sits above the 2% target and the benchmark 10‑year Treasury yield has surged to its highest level in a year. The...
Mortgage Rates Top 6% as Middle East Conflict Sends Shockwaves Through Housing Markets
U.S. 30‑year fixed mortgage rates climbed to 6.36% and German 10‑year home‑loan rates rose to 3.6% as the Iran‑Israel war fuels higher borrowing costs and oil price worries. The surge threatens to tighten financing for residential investors across the United...
Ghana Leaves IMF Programme, Shifts to Policy Coordination Instrument
Ghana has formally exited the International Monetary Fund’s Extended Credit Facility and entered a Policy Coordination Instrument, signalling a transition from crisis‑driven aid to a rules‑based fiscal framework. The move follows a sharp drop in inflation to 5.4% and a...
Statistics Canada Reveals April Inflation Figures
Canada’s annual inflation rose to 2.8% in April 2026, up from 2.4% in March, as gasoline surged 28.6% year‑over‑year and broader energy prices rebounded after the 2025 carbon‑levy removal. The jump was partly offset by slower rent growth, though rents...
Despite Summit Pledges, Don’t Expect US-China Trade to Improve
At a Beijing summit, U.S. President Joe Biden and Chinese President Xi Jinping pledged a stable, constructive relationship and unveiled joint trade and investment councils, sparking optimism for easing long‑standing tensions. Yet recent U.S. actions—including an investigation into revoking China’s...
How China’s Trade Is Holding Back Developing Countries (Episode 215)
In the latest Trade Talks episode, PIIE economists Chad Bown and Arvind Subramanian argue that China’s export‑driven model is increasingly constraining growth prospects for developing economies. They point to massive subsidies, overcapacity in sectors such as steel and solar, and...
For the ECB, the only Way Is Up
The European Central Bank is poised to raise interest rates at its June 11 meeting as persistently high energy prices keep inflation above its March baseline. ECB chief economist Philip Lane highlighted that a global energy shock—such as a closure of...
Rising Misery Index Signals Mounting Economic Pressure
The Misery Index – the sum of inflation and unemployment – rose to 8.1% in April, the highest level in three years, as inflation accelerates amid the Israel‑Iran conflict. Unemployment remains steady at 4.4%, but supply‑side energy shocks could push...
The Daily Feather — Margin Squeeze Cycle Far From Resolution
The Daily Feather notes that the current margin‑squeeze cycle in U.S. corporate earnings shows no sign of ending. Rising input costs, tighter credit conditions, and persistent inflation are compressing profit margins across sectors. Meanwhile, the 24/7 digital news cycle amplifies...
Asia and Europe Were More Skeptical About Developments in the Strait of Hormuz than the US
The United States announced it will not carry out the planned air strike on Iran, prompting the dollar to claw back most of its earlier losses and pushing 10‑year Treasury yields above 4.6%. Oil prices remained firm, with July WTI...
Japan Plans Massive Bond Issue to Fund Gasoline Subsidies, JGB Yields Spike to 2.8%
Prime Minister Sanae Takaichi ordered Finance Minister Satsuki Katayama to draft a supplementary budget that will be financed by a multi‑trillion‑yen sovereign bond issuance for gasoline subsidies. The move sent Japan’s 10‑year government bond yield to 2.8%, its highest level...
India’s 4% Fuel Price Hike Fuels Rupee Slide and Market Volatility
India raised retail petrol and diesel prices by Rs 3.91 per litre (about 4.4%), the smallest increase among major economies. The move came as the rupee slumped to a fresh all‑time low near ₹96.40 per dollar and equity markets swung wildly, underscoring the...
Morgan Stanley Forecasts New Growth Cycle for India Amid Geopolitical Risks
Morgan Stanley’s latest equity strategy predicts a new growth cycle for India, driven by policy stimulus and strong consumer demand, even as the country wrestles with a $690‑$697 bn foreign‑exchange squeeze and $50 bn of foreign portfolio outflows. The bank sees India...
Trump Delays Iran Strike After Gulf Allies Push for Diplomacy
President Donald Trump announced a postponement of a planned U.S. strike on Iran after Saudi Arabia, Qatar and the United Arab Emirates urged the United States to give diplomacy more time. The delay prompted a modest pullback in crude prices,...
European Shares Rise on Trump’s Iran Comments
European equities edged higher on Tuesday as the Stoxx 600 rose 0.2% to 611.22 points following President Donald Trump’s comment that a "very good chance" exists for a deal to limit Iran’s nuclear programme. Oil prices slipped about 2% but remained...
No Feelgood Factor for Reeves as Iran War Snuffs Out Economic Upturn
UK unemployment rose back to 5% in March, the first set of figures directly impacted by the Iran war, erasing a brief dip to 4.9%. Pay‑rolled jobs fell by 100,000 in April, marking the third‑largest monthly decline since 2014, while...
Dreadful UK Jobs Report Questions Need for Rate Hikes
The latest UK jobs report shows a headline drop of 100,000 in payroll employment, a rise in the unemployment rate to 5.0%, and private‑sector wage growth slowing to an annualised 0.6%, the weakest since 2015. While the employment decline is...
UK Job Cuts Accelerate as Iran War Casts Shadow on Outlook
UK employers shed 100,000 jobs in April, the sharpest payroll decline since the pandemic began, pushing total cuts to over 140,000 in the past three months. Unemployment rose to 5.5% in March, the highest rate since 2015, while vacancies fell...
Weaponizing Supply Chains: How Iran and China Drive Strategic Food Insecurity in Modern Conflict
Iran’s coordinated mine deployment and fast‑boat attacks forced the Strait of Hormuz to close, while Beijing simultaneously imposed sweeping export bans on urea and NPK fertilizers. The dual choke‑points halted roughly one‑third of global seaborne fertilizer trade and cut up...