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.
Michael S Barr: Efficient and Effective Central Banking - Beyond the Balance Sheet
In a recent speech, Michael S. Barr warned that efforts to shrink the Federal Reserve’s balance sheet could backfire, weakening bank resilience and market functioning. He emphasized that the Fed’s footprint extends beyond balance‑sheet size to its roles in bank supervision, payment‑system operations, and fiscal agency. Proposals focused solely on balance‑sheet reduction may increase the Fed’s market involvement through more frequent lending and interventions. Barr called for an integrated, holistic approach to central banking that balances monetary policy with financial‑stability responsibilities.
IGOV: Bond Sell-Off On Prolonged Energy Issues Is Global As Expected
The iShares International Treasury Bond ETF (IGOV) carries a 7.43‑year effective duration, making it highly sensitive to rising global rates. A prolonged energy supply shock from the Hormuz crisis is pushing benchmark yields higher across the curve, amplifying potential capital...
Behind Turkey's Gold Sales: The Biggest Ever Plunge In Foreign Reserves
Turkey’s foreign‑exchange reserves suffered a record $43.4 billion plunge in March, the steepest monthly drop ever recorded. The decline coincided with a widening current‑account deficit that swelled to $9.7 billion as soaring oil and gas prices strained the lira. Ankara responded by...
US-China Summit: Policy, Trade Developments Last Week Cloud Outlook for Global Biofuel Feedstock Markets
During a two‑day summit on May 14‑15, U.S. President Donald Trump and Chinese President Xi Jinping signaled a willingness to re‑engage on trade, including agricultural commodities. However, no concrete commitments on soybean purchases or tariff adjustments were announced, leaving soybean,...
Indian Bond Yields Spike to Six-Week High as Crude Oil Price Rally Jolts Markets
Indian government bond yields surged to a six‑week high on Monday as global Treasury yields rose and crude oil prices spiked. The benchmark 6.48% 2035 bond climbed to 7.14%, while the rupee fell to a record low of 96.31 per...
Oil Prices Rise and Bonds Wobble as Iran War Stokes Inflation Fears
Oil prices jumped after an attack on a UAE nuclear plant and stalled US‑Iran peace talks, pushing Brent crude to $111.16 a barrel before easing to $110. Global bond markets reacted sharply, with the US 10‑year Treasury yield climbing to...
Japan Considers Compiling Supplementary Budget to Fight Fuel Costs
The Japanese government is weighing a supplementary budget for the current fiscal year to counter soaring fuel prices linked to the Middle East conflict. Officials say the war has disrupted oil trade routes, pushing energy costs higher and deepening Japan’s...
FX Daily: Bearish Yield Curve Steepening Hits Risk Assets
A bearish steepening of the U.S. yield curve is driving a sell‑off in long‑dated Treasuries, pushing 10‑year yields to their highest level since early 2025. The move follows a surprise 6% YoY rise in April PPI, the strongest inflation reading...
India-UAE Energy Push Offers Relief, but Global Risks Still Loom: Arnab Das
Prime Minister Narendra Modi’s recent visit to the United Arab Emirates resulted in agreements on strategic petroleum reserves and long‑term LNG supplies, offering India short‑term relief from soaring energy costs and balance‑of‑payments pressure. Global‑market strategist Arnab Das cautioned that the...
EU to Force Companies to Buy Components From Non-Chinese Suppliers, FT Reports
The European Union is drafting rules that will require companies to source critical components from at least three non‑Chinese suppliers, limiting any single supplier to 30‑40% of total purchases. The measure focuses on sectors such as chemicals and industrial machinery,...
India Poised for Strong Growth Revival Despite Global Risks: Morgan Stanley
Morgan Stanley’s new India Equity Strategy Playbook says the country is on the brink of a fresh growth cycle, driven by supportive fiscal and monetary policies, robust domestic demand, and a rebound in corporate earnings. Earnings growth is turning after...
EU Races to Find Deal Compromise as Trump Tariff Deadline Looms
The European Union is accelerating negotiations to strike a compromise on a pending trade deal as President Donald Trump’s deadline for imposing tariffs on EU steel and aluminium approaches. EU officials are balancing industry pressure with political demands, aiming to...
Oil Crisis to Become a Full-Blown Catastrophe
Global oil stockpiles have buffered disruptions from the U.S.-Israel war with Iran and the near‑stop of shipping through the Strait of Hormuz. However, stalled peace talks and rising U.S. inflation are eroding that cushion, prompting analysts to warn of rapidly...
Thai Q1 GDP Grows 2.8% Y/Y, Above Forecast
Thailand’s economy expanded 2.8% year‑on‑year in Q1 2026, outpacing the Reuters median forecast of 2.2%. On a seasonally adjusted quarterly basis, growth was 0.7%, far above the 0.1% analysts expected. The National Economic and Social Development Council kept its 2026...
Japanese Investors Dump $29.6 Bn of U.S. Treasuries in Q1, Biggest Quarterly Sell‑off Since 2022
Japanese investors sold a net ¥4.67 trillion (about $29.6 bn) of U.S. government, agency and municipal bonds in the first quarter of 2026, the biggest quarterly reduction in nearly four years. The outflow, driven by a faster‑than‑expected tapering of Bank of Japan...
China April Retail Sales +0.2% Y/Y (Exp 2%) & Industrial Prduction +4.1% Y/Y (Exp 5.9%)
China’s April economic data revealed a sharp miss on growth expectations. Retail sales rose only 0.2% year‑over‑year, far below the 2% forecast, while industrial production expanded 4.1% YoY, missing the 5.9% consensus. Fixed‑asset investment turned negative, falling 1.6% YTD, and...
Iran War Economic Toll Deepens as Global Oil Stocks Near Exhaustion
The Iran‑U.S. conflict is deepening its economic toll, with more than 23,000 Iranian factories hit and over one million jobs lost, while the UNDP warns up to 4.1 million more citizens could slip into poverty. At the same time, global oil...
Japan's 10-Year Bond Yield Hits 1996 High as Fresh Debt Plans Emerge. Extra Budget Coming
Japan’s benchmark 10‑year government bond yield jumped to 4.2%, the highest level since 1996, after a government source confirmed fresh debt issuance to fund a supplementary budget aimed at cushioning households from soaring energy costs linked to the Iran war....
Managed Trade Is Back, and Australian Agriculture Is Exposed
The United States secured a new agreement for China to purchase at least $17 billion of U.S. agricultural commodities annually from 2026‑2028, a figure that looks strong against the $8 billion low‑point in 2025 but is modest compared with the $33‑$38 billion China...
PBOC Sets USD/ CNY Reference Rate for Today at 6.8435 (Vs. Estimate at 6.8086)
The People’s Bank of China (PBOC) set today’s USD/CNY reference rate at 6.8435, slightly above the Reuters consensus of 6.8086. The central bank maintains a +/-2% daily fluctuation band around the benchmark. It also injected 1 billion yuan into the market...
US Treasury Yields Spike to Multi‑Year Highs as US‑Iran Tensions Ignite Bond Sell‑off
Global bond markets plunged on Friday as US‑Iran tensions lifted the 10‑year Treasury yield to 4.595% and the 30‑year to 5.127%, the highest levels since 2007. Investors now price a near‑50% chance of a Federal Reserve rate hike later this...
CGFS 2026 Report Flags Rising Foreign‑Currency Funding Risks
The Committee on the Global Financial System’s 2026 report warns that foreign‑currency funding remains a systemic vulnerability, with the U.S. dollar shouldering most cross‑border liquidity needs. The study draws on balance‑sheet data, confidential derivatives positions and a banking‑sector survey to...
Ghana Posts Fastest Post‑IMF Recovery, GDP Hits $118 Bn as Inflation Falls to 3.2%
Ghana has completed its $3 bn IMF Extended Credit Facility, posting the quickest post‑program rebound in its history. GDP reached roughly $118 bn, inflation slid to 3.2% and the debt‑to‑GDP ratio fell to 45.3% after a series of fiscal and structural reforms...
UK 30‑Year Gilt Yield Hits 5.86%, Highest Since 1998 Amid Political Turmoil
The 30‑year British gilt jumped 20 basis points to 5.86% intraday, its loftiest level since 1998. The surge coincided with heightened scrutiny of Labour leader Keir Starmer’s fiscal credibility, prompting investors to demand a steeper risk premium. Analysts warn the move...
Markets Are Jittery as the Global Oil Crisis Bleeds Into a Global Debt Selloff, While Trump Weighs New Military Options...
U.S. stock futures slipped on Sunday as the Strait of Hormuz remained closed, pushing oil prices higher and sparking a broader market sell‑off. Brent crude rose to $110.70 a barrel and U.S. crude to $107.26, while the 30‑year Treasury yield...
This Is Not a Short War
Two months after the Iran‑Russia conflict began, oil prices have surged, but the real impact is now shifting from headline‑level spikes to tangible shortages and supply chain disruptions. The author warns that these disruptions are already feeding into broader economic...
UK Firms Halt Investments and Hiring as Iran War Pushes up Costs, Bosses Warn
A new Guardian survey reveals UK firms are suspending investment projects and freezing hiring as the Iran‑Israel conflict drives up input costs and fuels broader economic uncertainty. Companies are shifting focus from growth to cost‑control, with many executives citing rising...
Macroeconomics of Tariffs with Global Production and Finance Networks
A new framework integrates global production networks into the New Keynesian open‑economy model, showing that tariffs function as both demand and supply shocks. By incorporating price rigidities, financial frictions and network propagation, the model predicts that even short‑lived tariffs can...
Stocks Waver as Doubts Over US-Iran Deal Lift Oil: Markets Wrap
Oil prices fell on news of a possible US‑Iran waiver, easing market pressure. Brent crude slipped to $108 per barrel after Iranian media reported Washington’s temporary sanctions waiver proposal. The dip in oil helped the S&P 500 recover modestly after its...
U.S. Stock Futures Slip, Oil Prices Push Higher as Iran War Remains Stuck in Stalemate
U.S. stock‑index futures slipped modestly on Sunday as West Texas Intermediate crude surged toward $107 a barrel, reflecting heightened tension in the Iran‑Hormuz standoff. The conflict has pushed U.S. gasoline to $4.51 per gallon, stoking inflation worries that rose to...
Has the Time Come for Dollarization in the Americas?
A Cato Institute panel convened last week to examine the prospect of dollarization in Latin America, with a focus on Argentina’s persistent monetary turmoil. Featuring economist Emilio Ocampo, former World Bank president David Malpass, and moderator Ian Vásquez, the discussion...
Trump Clinches Historic China Deal on Rare Earths
Fact Sheet: President Donald J. Trump Secures Historic Deals with China, Delivering for American Workers, Farmers, and Industry China will address U.S. concerns regarding supply chain shortages related to rare earths and other critical minerals, including yttrium, scandium, neodymium, and...
Russian SME Closures Accelerate in 1Q26 as Economy Contracts
Russian small‑and‑medium‑enterprise closures surged in Q1 2026, with about 209,000 firms shutting down – a 9 percent increase year‑over‑year. The wave follows a real‑terms contraction, a 14.5 percent policy rate, a two‑point VAT hike and inflation that outpaces the official 5.9 percent headline. Retail,...
Washington Week Ahead: China Deals, Tomatoes and Midterms in Focus
President Donald Trump’s meeting with Xi Jinping secured a new Chinese commitment to buy at least $17 billion in U.S. agricultural commodities each year for the next three years, adding to existing soybean purchases and reviving poultry and beef exports. The...
Mexican Peso Slides to Multi‑Month Lows as Dollar Gains on Fed Rate Hike Odds
The Mexican peso closed at 17.34 per dollar on Friday, marking a 0.67% daily drop and a 0.87% weekly loss, its steepest slide in weeks. The slide reflects rising U.S. inflation, higher oil prices and market pricing of a December...
S&P Global Affirms Romania’s BBB‑/A‑3 Sovereign Rating with Negative Outlook, Citing Coalition Split
S&P Global Ratings affirmed Romania’s sovereign credit rating at BBB‑/A‑3 on May 16, 2026, but attached a negative outlook as the governing coalition disintegrates. The agency warned that political instability could hinder efforts to narrow the country’s twin current‑account and...
ET Graphics: BoP Stability Tested by Outflows & Rupee Fall
India’s balance‑of‑payments is under strain as the current‑account deficit widens and capital‑account surplus contracts, prompting heightened outflows. The rupee has slipped roughly 11% over the past year and about 5% since the US‑Iran conflict began, amplifying external vulnerabilities. The Reserve...
Why the US, UK and NZ Haven't Raised Interest Rates in Years
Australia’s Reserve Bank lifted its cash rate to 4.35% in May, while the United States, United Kingdom and New Zealand have left policy rates unchanged since 2023. The three countries cite weaker labour markets, higher unemployment and volatile currencies as reasons...
Power Rationed, Medical Supplies in Doubt as Fuel Crisis Lingers for Millions
The Iran‑Israel conflict has triggered a global fuel shock, pushing diesel to a peak of $3.30 per litre and inflating transport costs worldwide. Governments from Japan to Australia are scrambling with multi‑billion‑dollar aid packages, while Russia’s crude exports surged to...
Taking a Long View of the Dollar
Larry Greenberg notes that despite the geopolitical shock of the U.S. war on Iran, the dollar has remained resilient, buoyed by capital inflows that prioritize return of investment. The trade‑weighted dollar index hovers near 99.27, close to its historic 100...
Why Shouldn’t Yields Rise?
U.S. 10‑year Treasury yields jumped 10 basis points on Friday, pushing the rate close to the 5% threshold that has rattled investors. The rise coincides with a continued climb in debt held by the public, now surpassing 100% of GDP...
Tight Treasury Yields and Credit Spreads Signal Imminent Break
Here's the contradiction nobody's discussing — 10-year Treasury yields sit at 4.59%, above the long-term average of 4.25%. That signals tight monetary policy or term premium expansion. At the same time high-yield credit spreads are at 276 basis points, near...
Concentrated Chinese Manufacturing: Efficient yet Risky, Partners Must Manage Trade
Good piece "It’s no longer controversial to say that while having so much manufacturing concentrated in one place might be efficient, it is also dangerous" China's trading partners are increasingly concluding that their trade with China needs to be managed --
Peso, Politics Seen Pressuring Equities
The Philippine Stock Exchange index closed at 5,976.77, modestly up week‑on‑week but still below the 6,000 resistance level. A record‑weak peso at P61.72 per dollar is inflating import costs and stoking inflation fears. Combined with elevated oil prices, lingering interest‑rate...
10Y Yield
10Y at 4.59% above long-term avg of 4.25%. HY spreads at 276 bps tight to history. Bond market priced for perfection on both sides of the curve.
Oil Surges Past $109 as Iran Toll Threat and US Waiver Expiry Tighten Supply
Crude oil jumped above $109 a barrel on Tuesday after Iran announced tolls on Strait of Hormuz traffic and the United States let a temporary Russian‑oil waiver expire. The moves have spiked import bills and inflation pressures for oil‑importing emerging...
Citi Says Japan Could Deploy Up to ¥30 Trillion in Yen‑Buy Interventions
Citi estimates Tokyo has already spent roughly ¥10 trillion ($63 bn) buying yen in recent weeks and could raise that to as much as ¥30 trillion ($190 bn) if reserves are tapped. The analysis highlights the scale of Japan’s intervention capacity and its potential...
S&P Upgrades Nigeria’s Sovereign Rating to B, First Rise Since 2012
S&P Global Ratings raised Nigeria’s long‑term sovereign rating to B from B‑, its first upgrade in 14 years. The agency cited higher oil prices, expanded refining capacity and a liberalised exchange rate as drivers of stronger growth and balance‑of‑payments fundamentals.
Gov’t Infra Spending Plunges 44% as Graft Crackdown Halts Projects
The Philippines’ infrastructure outlays plunged 43.5% in Q1, falling to ₱147.8 billion (≈ $2.7 bn) from ₱261.8 billion a year earlier. March spending halved to ₱59.1 billion (≈ $1.1 bn) as the Department of Public Works and Highways tightened billing validation after a flood‑control graft scandal. Total...
India Taps Oman to Rescue $11.8 Billion Food Exports to West Asia
India is turning to Oman’s ports and land corridors to sustain its $11.8 billion annual food export pipeline to West Asia after the Strait of Hormuz became impassable. The Agricultural and Processed Food Products Export Development Authority has been negotiating with...