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.
Morning News: May 26, 2026
U.S. airstrikes against Iranian targets sparked a sharp rise in global crude prices, pushing Brent to roughly $84 a barrel and WTI to about $80, the highest levels in six weeks. The attacks also complicated ongoing diplomatic talks aimed at a broader Iran‑U.S. peace framework, creating uncertainty for energy markets. Analysts warn the price surge could tighten profit margins for airlines and manufacturers reliant on petroleum products. Meanwhile, the heightened tension is prompting investors to reassess exposure to oil‑related equities and commodities.
ECB Eyes June Rate Hike as Chief Economist Flags Forecast Upgrade
The European Central Bank is poised for a June rate hike, with chief economist Philip Lane indicating an upgraded inflation outlook for next month. Lane cited heightened upside risks from Middle East tensions and persistently high oil prices, suggesting inflation...
ECB Signals No Need to Correct Market Speculation of June Rate Hike
The European Central Bank’s chief economist, Philip Lane, told Nikkei that the market does not need extra guidance on speculation surrounding a possible June rate hike. He reaffirmed the ECB’s trajectory toward tighter policy and hinted at a further upward...
Interview with AGAGA
Alasdair Macleod’s May 2026 interview spotlights two geopolitical moves reshaping the precious‑metals market: India’s sudden call for citizens to limit gold and silver spending, and France’s decision to liquidate and repatriate its U.S.-held gold reserves. He also revisits his Substack...
NZD Slides on US‑Iran Tensions Ahead of RBNZ Rate Decision
The New Zealand dollar weakened sharply in Asian trading after the United States struck Iranian missile sites, reviving geopolitical risk. Traders also braced for the Reserve Bank of New Zealand’s policy decision, keeping the NZD under pressure.
EU Pushes Ahead with Digital Euro, Critics Warn of Hidden Capital Controls
The European Union is accelerating its digital euro project, targeting the rollout of digital wallets by the end of 2029 with a €3,000 (≈$3,250) balance limit. Bundesbank President Joachim Nagel defended the design, but analysts warn the centralised CBDC could...
Treasury Yields Drop as Iran Ceasefire Hopes Offset Fresh US Military Strikes
U.S. Treasury yields fell on Tuesday as bond markets reopened after the Memorial Day holiday, buoyed by optimism about a potential cease‑fire in the Middle East despite fresh U.S. strikes against Iran. The benchmark 10‑year note slipped to 4.51%, the...
The Bond Market Is Telling Us the Free Lunch Is Over
The era of cheap government financing is ending as the $145 trillion global bond market flashes red. Rising inflation, supply‑chain disruptions and massive fiscal spending have pushed long‑term yields higher, with the 30‑year U.S. Treasury at 5.06% and Japan’s at a...
In Beijing, the US and China Tiptoed Around Tech and Critical Minerals
The Xi‑Trump summit in Beijing marked a noticeably friendlier tone, signaling the start of a tentative US‑China reconciliation. Both sides agreed to establish separate boards to oversee bilateral trade and investment, though limited to non‑sensitive sectors. Recent court rulings have...
US Tariffs Strip Indonesia’s Plywood Exports of Their Biggest Market
Indonesia’s plywood exports fell 26% YoY in Q1 2026, driven by a 60% plunge in shipments to the United States after the Commerce Department imposed steep countervailing and anti‑dumping duties. Export volume to the U.S. dropped to 94,000 cubic metres...
Bond Issuance Surges as Buyers Retreat, Developing Economies Sell
Bond issuance is growing, driven by both big tech (FT below) and national governments. This arrives at a time when some traditional buyers are retreating, while an increasing number of developing economies are selling off their holdings to meet mounting FX...
Why China Keeps Selling U.S. Treasuries
In this episode of China Decode, hosts Alice Han and James King examine three major stories: the stalled Power of Siberia 2 gas pipeline linking Russia and China, China’s large‑scale sell‑off of U.S. Treasury securities, and the debut of the world’s...
Global Markets: Australia Shares End Lower as Inflation, Iran Peace Deal Concerns Weigh
Australian shares ended lower on Tuesday, with the S&P/ASX 200 slipping 0.4% to 8,658 as investors weighed stubborn inflation and renewed doubts over a U.S.–Iran peace deal. The banking sub‑index led the declines, falling 0.7% after Commonwealth Bank of Australia edged...
Global Growth Slows as Shocks Spread - Weekly Roundup: 26 May
UNCTAD’s Trade and Development Foresights 2026 warns global growth will decelerate to 2.6% in 2026, with merchandise trade slowing to 1.5‑2.5% after a 4.7% surge in 2025 and developing economies facing higher energy, food and financing pressures. Meanwhile, Australian equities...
Sri Lanka Delivers Full-Point Rate Hike to Crimp Inflation
Sri Lanka’s central bank lifted its overnight policy rate by a full percentage point to 8.75%, marking the first tightening since March 2023. The move targets inflation that has breached the 5% target, driven by soaring energy costs linked to the...
Bank of Ghana Holds Rate at 14% and Raises Cash Reserve Ratio to 20% to Boost Economic Resilience
The Bank of Ghana’s Monetary Policy Committee kept the policy rate unchanged at 14% and announced a uniform 20% cash reserve ratio for banks effective June 4. The move reflects a strategic pivot toward economic resilience as external shocks and...
RBI Signals Readiness to Intervene as Rupee Slides 6% and Seen Undervalued
Reserve Bank of India Governor Sanjay Malhotra told the Mint newspaper that the rupee may be undervalued after a 6% slide since the West Asia conflict began. He pledged that the RBI will do “whatever is required” to curb excessive...
Vanguard Shifts to Longer Duration as 10‑Year Treasury Yields Near 4.7%
Vanguard, managing $479 bn of active fixed‑income assets, announced a move to add duration exposure after 10‑year Treasury yields climbed to about 4.67% in May. The shift reflects higher inflation expectations, a geopolitically‑driven energy shock and a market that now prices...
Oil and LNG Tankers Resume Strait of Hormuz Transit, Easing Global Supply Bottlenecks
U.S. and Iranian negotiators have cleared the way for oil and LNG tankers to resume transit through the Strait of Hormuz after a three‑month shutdown. The reopening has already nudged Brent crude below $98 a barrel and eased pressure on...
Myanmar Military Launches Rare‑earth Offensive in Kachin, Chin and Karen Border Zones
Myanmar’s armed forces, led by new chief Gen. Ye Win Oo, have launched fresh assaults on border towns in Kachin, Chin and Karen states, targeting mining belts that supply roughly half of the world’s heavy rare earths. The push threatens regional stability...
Gas Hippopotomus Crushes Reservation Again
The Australian government released a draft framework for its LNG reservation system, mandating that exporters allocate 20% of their LNG output to the domestic market. The policy aims to boost local energy security while assuring that existing export contracts with...
ECB Flags Record‑High Euro‑Area NBFI Derivatives, Warns of Systemic Risk
The European Central Bank warned that derivative exposure to non‑bank financial institutions (NBFIs) in the euro area surged to all‑time highs in Q4 2025, with claims reaching $477.5 bn and liabilities $210.7 bn. The spike, driven by a 32% rise in cross‑border...
U.S. Treasury Yields Top 4.5% as Market Pushes Back on Trump’s Spending Plans
U.S. Treasury yields on the benchmark 10-year note climbed above 4.5%, prompting warnings from market strategists and raising anxiety in the White House about higher borrowing costs for mortgages, credit cards and business loans. The surge comes as President Trump...
Fed Minutes Signal Potential Rate Hike, Push Treasury Yields Higher
Federal Reserve minutes released Tuesday revealed that most officials see a need for additional rate hikes if inflation stays above target. Swap markets now price a 25‑basis‑point increase by year‑end, while 10‑year Treasury yields rose sharply, underscoring heightened bond‑market volatility...
Chevron CEO Warns of 1970s‑style Oil Shortage, Sparking Retail Stock Concerns
Chevron chief Mike Wirth warned at a Milken Institute forum that a closure of the Strait of Hormuz could trigger physical oil shortages comparable to the 1970s crisis. He said economies may have to slow, a scenario that analysts say...
Analysis: Indonesia Finds Little Comfort From Xi-Trump Summit
The May 14‑15 Xi‑Trump summit in Beijing produced a brief pause in the broader US‑China rivalry but failed to deliver concrete solutions for the Iran nuclear dispute, the Middle East, or Ukraine. Indonesia’s President Prabowo Subianto, who has built his...
Gold Declines as Gulf Strikes Cloud Interest Rate Outlook
Gold’s price fell about 1.1% on May 25, 2026, slipping to just above $4,500 an ounce. The drop followed U.S. strikes in the Strait of Hormuz that targeted Iranian missile launch sites and mine‑laying vessels. The attacks revived worries that the vital...
The Global Week Ahead
US‑Iran negotiations show progress but face Republican criticism of a proposed 60‑day cease‑fire extension, with President Trump defending the talks while adjusting draft terms. Meanwhile, Pope Leo XIV issued an encyclical warning of AI risks and urging regulation, and Chinese President...
Marco Rubio’s India Tour Aims to Revive $500B Trade Deal and Boost Quad Unity
U.S. Secretary of State Marco Rubio arrived in India on May 23 for a four‑day visit that includes talks with Prime Minister Narendra Modi and External Affairs Minister S. Jaishankar. The mission targets a stalled $500 billion trade agreement and aims to reinforce the...
Fed Governor Says Iran War Causing More Uncertainty Than Tariffs
Federal Reserve Governor Christopher Waller told a Frankfurt audience that the central bank will keep the policy rate steady for now, citing the need for clearer inflation improvement or a significant labor‑market slowdown before any cuts. He noted that the...
InvestingLive Americas FX News Wrap 25 May: Diplomacy Hopes Hit Oil, Lift Risk
U.S. and Iranian negotiators are inching toward a preliminary memorandum that could include a 60‑day cease‑fire and the reopening of the Strait of Hormuz. The talks also touch on limited sanctions waivers, temporary oil export permissions, and the contentious enriched‑uranium...
Govt Open to Views on Capital Gains Tax Cuts Amid FPI Outflows: Sitharaman
Finance Minister Nirmala Sitharaman said the Indian government will consider stakeholder input on lowering the 20% short‑term and 12.5% long‑term capital gains taxes on equities to make the market more attractive to foreign portfolio investors (FPIs). FPIs have withdrawn a record...
U.S. Administration Signals Economic Relief in Iran Peace Talks, Aims to Reopen Strait of Hormuz
President Donald Trump announced that a peace agreement with Iran is largely negotiated, pledging to lift sanctions and reopen the Strait of Hormuz, which has been shut since late February and cut 10‑12 million barrels per day from world supply. The...
Beef Farmers Say Their Questions About New Trade Talks Fall on Deaf Ears
Canadian beef producers are warning that upcoming trade talks with Mercosur could dramatically increase beef imports, potentially as a bargaining chip for Canadian export access. Farmers say they have received little communication from federal negotiators, prompting local MP Alex Ruff...
Analysts Warn Taiwan's Chip Dominance Threatens Global Supply Chains if China Takes Control
Fox News analysts warned that Taiwan’s control of advanced semiconductor manufacturing, led by TSMC, underpins smartphones, AI and precision‑guided munitions. A Chinese takeover would give Beijing a stranglehold on supply chains worth trillions and erode U.S. technological advantage.
US Dollar Holds Near Six‑Week Highs as Inflation Fears and Fed Hints Spur Market Tension
The U.S. dollar stayed close to a six‑week high on Friday, with the Dollar Index edging to 99.24. Fed officials hinted at a possible rate increase while consumer sentiment plunged to a record low, keeping markets on edge about future...
World Bank Deploys $20‑$25 B Emergency Funding for 27 Nations Amid Iran War
The World Bank has unlocked $20‑$25 billion in rapid‑response financing for 27 developing nations after the Iran war upended global energy markets. The move taps the Rapid Response Option, allowing countries to draw up to 10% of undisbursed World Bank funds...
Singapore Keeps 2026 Growth Outlook at 2‑4% as Inflation Holds at 1.8%
Singapore's Ministry of Trade and Industry confirmed on May 25 that the city‑state will grow between 2.0% and 4.0% in 2026, unchanged from its February upgrade. Consumer price inflation remained steady at 1.8% YoY in April, providing a clear macro...
Reviewing Our Economic History Can Help Us Weather Economic Crises
The Philippines has breached the P60 per USD threshold (≈$1.09), pushing import costs higher and stoking stagflation fears. The author recalls four past economic cycles—from the 1980s peso surge and 50% inflation to the 1997 Asian crisis and the pandemic—showing how...
Steadying the PH Economy Amid Gathering Headwinds
Entering the second half of 2026, the Philippines remains one of Southeast Asia’s more resilient economies, buoyed by strong domestic consumption, remittances, and ongoing infrastructure spending. However, rising geopolitical tensions and a volatile domestic political climate pose fresh risks, especially...
Debt Servicing Climbs to $2.1 Billion in 2 Months
The Philippines’ external debt‑service bill jumped to $2.13 billion in January‑February 2026, a 32% year‑on‑year increase. Principal repayments more than doubled to $884 million, while interest outlays were essentially flat at $1.24 billion. The debt‑service‑to‑export‑shipments ratio rose to 17.5%, reflecting a higher burden...
RMPOs ≠ QE, BUT DO STOCKS KNOW THAT?
The piece argues that Reserve Management Purchase Operations (RMPOs) are not the same as quantitative easing, yet equity markets often treat them as equivalent. It highlights the persistent debate among investors about the Fed’s balance‑sheet expansion and its impact on...
Thailand's Trade Deficit Offset by Tourism‑driven Current Surplus
Thailand is bleeding cash on physical goods, but it is making just enough back through tourism and services to keep the overall balance positive. i.e. Current account. Additionally, Thailand’s import of around 300 billion baht worth of gold in the...
Mexico's April Trade Surplus Surges to 1980 High
“Mexico’s trade surplus widened far more than expected in April to $4.52 billion, well above the median estimate of $476.35 million in a Bloomberg survey, as exports climbed to the highest since the data began in 1980.” Carney Asada in action...
The Fertilizer Shock Could Be Far Worse than the Oil Shock – by Amanda Van Dyke (Substack – May 25,...
Industrial fertilizers—nitrogen, phosphate, and potash—support roughly half of global food production, making their supply chains critical to civilization. Recent geopolitical tensions in the Gulf, a major fertilizer export hub, have exposed a looming “fertilizer shock” that could eclipse the current...
Temporary
New @nberpubs: "Unlocking Mortgage Lock-In: Equilibrium Effects in a Spatial Housing Ladder Model" https://t.co/JzXAeBI1wS "A temporary rate hike causes lock-in, increasing aggregate house prices by 4.4% and rents by 1.5% relative to a counterfactual without lock-in" https://t.co/55VqtrmtJP
Higher Labor Market Fluidity Boosts Wages and Productivity
"Labor Market Fluidity, On-the-Job Learning, and Career Growth Across Countries" https://t.co/NSlsUMzcs5 "Moving from a low- to a high-fluidity country... raises life-cycle wage growth by 19.4 log points and output per worker by 33.4 log points." https://t.co/zUN0TnZw1e
Shifting From Fossil Fuels Will Fail without Funding for African Industry and Energy Infrastructure
African leaders warned that the shift to renewable energy will falter without substantial financing for clean‑energy infrastructure, industrialisation and local mineral processing. At the April 2026 Conference on Transitioning Away from Fossil Fuels in Colombia, they highlighted a $2.5 trillion climate‑finance...
US‑Iran Peace Deal Hopes Push Oil to Two‑Week Lows, Spark Global Market Rally
President Trump announced that a US‑Iran peace agreement is largely negotiated, raising expectations that the Strait of Hormuz will reopen. The prospect has pulled oil down to two‑week lows, lifted gold and equities across Europe, Asia and the United States,...
Five EU Countries Call for Tougher Trade Weapons to Tackle China
A France‑led coalition of five EU members—France, Italy, Spain, the Netherlands and Lithuania—has urged the European Commission to broaden the use of tariffs and other trade‑defence tools against unfair practices, implicitly targeting China. The non‑paper calls for more frequent safeguard...