Today's Global Economy Pulse
Australia's April CPI eases to 4.2% as fuel cuts mask rising core inflation
The consumer price index slipped to a 4.2% annual rise in April, missing the 4.4% forecast, helped by a temporary fuel excise cut that lowered transport costs. Meanwhile, 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 policy outlook.
NZIER Shadow Board Backs RBNZ Hold This Week (May 27) at 2.25% but Rate Rises Seen Ahead
The NZIER Monetary Policy Shadow Board largely recommends that the Reserve Bank of New Zealand keep the Official Cash Rate at 2.25% in the May 27 decision, citing subdued growth, spare capacity and external uncertainty from the US‑Israel‑Iran conflict. A minority of three members argue for an immediate hike, pointing to persistently low real rates and rising inflation pressures. All members concur the OCR will need to be higher within a year, with most projecting a range of 2.75%‑3.75%. The split highlights a timing debate rather than a directional one.
Fed Should Quiet Down, Embrace Meeting‑by‑Meeting Decisions
Warsh Wants the Fed to Shut Up. Less is more. The problem with Powell and Yellen was too many appearances and too much commentary. Every speech moved markets and created more volatility than necessary. Warsh’s approach is “less is more.” He believes...
European Gas Storage Can’t Survive 3 More Months of Hormuz
Europe’s gas storage sits at only 35‑37% of capacity, far short of the 50% seasonal norm and the EU’s 80‑90% winter target. A prolonged 1‑3‑month disruption in Hormuz shipping could push Dutch TTF prices to €90/MWh (about $98/MWh), forcing industrial...
DEUTSCHE BANK SAYS $8,000 GOLD: The Geopolitical Reserve Reordering, the Dollar's Collapse From 60% to 40%, and Why the Endgame...
Deutsche Bank Research reports that the U.S. dollar’s share of central‑bank reserves has dropped from over 60% to roughly 40%, while gold’s share has surged to 30% of global reserves. The bank attributes the shift to geopolitical realignment rather than...
U.S. Growth Set to Outpace Peers Through 2030
The Economist on the U.S. economy’s consistent growth outperformance relative to other advanced countries: “America’s outperformance began decades ago, but in the 2020s it has become vast. And it is likely to last. The latest IMF forecasts show American growth besting...
Newsquawk Week Ahead Highlights 25th – 29th May and Week in Review
The week ahead features a cluster of central‑bank events, with the Reserve Bank of New Zealand expected to keep its Official Cash Rate at 2.25% and the South African Reserve Bank likely raising its rate to 7% as inflation jumps to...
Nepal’s LDC Graduation Delayed to 2029 Amid Sluggish Growth and Informal Sector Reliance
The United Nations has signaled that Nepal’s graduation from Least Developed Country status will likely be postponed until 2029. The delay follows years of modest GDP growth—averaging 4% historically, slipping to 1.8% in 2023 and projected at 2.3% in FY26—and...
Hassett Says Ending Iran War May Create Room for Fed Rate Cut
Kevin Hassett, the White House’s chief economic adviser, told Fox News that a negotiated settlement with Iran would likely cause oil prices to plunge, giving the Federal Reserve room to cut interest rates. He highlighted that recent inflation spikes are...
Trump Says There’s No Rush as Deal to End Iran War, Reopen Strait of Horm...
U.S. and Iran are reportedly close to a deal that would end hostilities and fully reopen the Strait of Hormuz, according to the New York Times. The agreement would cease the ongoing war but postpone negotiations on Iran’s nuclear program. Final approval...
Panama Drops 5.5% Casino Winnings Tax to Boost Foreign Tourism
Panama's Ministry of Economy and Finance announced the removal of a 5.5% tax on casino and betting winnings, a move designed to attract foreign gamblers and revive a tourism sector that has seen declining visitor numbers and three consecutive years...
Powell’s Continued Board Seat Fuels Fed Policy Uncertainty, Opinion Says
In a recent Fox News opinion piece, Peter Navarro warned that former Fed Chair Jerome Powell’s decision to stay on the Board after Kevin Warsh’s swearing‑in as new Chair could give Powell a “shadow” majority. The column argues this dynamic...
Kevin Warsh Sworn In as Fed Chair, Signaling Shift in Monetary Policy
Kevin Warsh took the oath of office as Federal Reserve Chairman in a White House ceremony, pledging a reform‑oriented agenda and a departure from traditional policy frameworks. The appointment, backed by President Trump, has sparked immediate debate among market participants...
Inflation, Hikes And Hawks
The US will release its personal income and spending report alongside the core PCE inflation figure, which economists expect to have risen 0.3% month‑over‑month and 3.3% year‑over‑year in April – the highest YoY rate since October 2023. New Fed chair...
Now the Pain Begins
The protracted US‑Iran war is pushing global oil prices higher, straining the Philippines’ import‑heavy economy. Inflation surged from 4.1% to 7.2% year‑on‑year in April, prompting the Bangko Sentral ng Pilipinas to lift its policy rate to 4.5% and signal further...
Dollar Surge Temporary; Post‑war Fed Likely to Cut Rates
Rate differentials have moved massively in favor of the Dollar (black) and are lifting it against the G10 (blue). But this is a false dawn for the greenback. If the war ends, we'll go right back to pricing cuts for...
Trade Wars Yield No Winners, Export Bans Backfire
Excellent essay from Soumaya Keynes in the weekend FT "You can see why the line “no one wins a trade war” is so appealing. It’s basically correct. Export restrictions are cumbersome weapons, with unpredictable effects that can easily spiral out of...
Only 5% of Top U.S. Companies Cite Tariff Refunds as Trump-Era Duties Remain Unsettled
A Bloomberg review shows only about 150 of the 3,000 largest U.S. public companies have mentioned tariff refunds in recent filings, reflecting hesitation as Trump-era tariffs stay illegal and under litigation. The silence signals uncertainty over profit margins and inflation...
Nigeria's Central Bank Keeps Policy Rate at 26.5% as Union Bank Court Fight Escalates
Nigeria's Central Bank of Nigeria (CBN) left its Monetary Policy Rate unchanged at 26.5% as inflation stays above 15% and election‑year spending looms. At the same time, a Federal High Court judgment nullified the CBN's 2024 dissolution of Union Bank's...
Pakistan's Forex Crunch Deepens as FDI Falls 33% and $4.8 Bn Debt Repayments Loom
Pakistan is confronting an acute foreign‑exchange crisis as it prepares to repay roughly $4.8 bn of external debt while foreign direct investment has slumped 33% in FY26. The twin pressures are eroding confidence in the rupee and raising alarms across South...
Mexico's Food Prices Surge as Global Input Costs Spike, Threatening Growth
Mexico's staple prices have jumped sharply as global fuel and fertilizer costs rise, lifting the basic food basket by 8.1% in March and squeezing low‑income households. The price shock coincides with a 0.8% GDP contraction in Q1 and 4.45% annual...
Can Currency Swaps Make China a Lender of Last Resort? Ex-PBOC Official Weighs In
Former PBOC deputy governor Zhu Min said China should position the yuan as an international lender of last resort, leveraging its growing network of currency‑swap agreements. China now has swap lines with 32 countries, allowing rapid yuan access for crisis‑hit...
India, US Trade Deal: Both Countries Looking at Firming up Pact Soon
U.S. Secretary of State Marco Rubio announced that India and the United States are close to solidifying a comprehensive trade agreement. The talks, held with Indian External Affairs Minister S. Jaishankar, span trade, critical minerals, energy and defence. Rubio emphasized...
Iran War Cripples Petrodollar System, Triggers Oil Shock and Inflation in Emerging Markets
The Iran‑US‑Israel war has shut the Strait of Hormuz, disrupting 20% of global oil flows, hitting 38 commercial ships and leaving more than 20,000 crew members stranded. The resulting oil‑price surge is eroding the petrodollar framework and feeding inflation in...
Egyptian Central Bank Forecasts Inflation Spike Through Q3 2026 Before Gradual Decline
The Central Bank of Egypt (CBE) projects annual headline inflation to accelerate to roughly 15% by the third quarter of 2026 before tapering toward its 7%±2% target in 2027. The Monetary Policy Committee kept the overnight deposit and lending rates...
Trump Announces Draft Iran Deal to Reopen Strait of Hormuz, Citing 100 Vessel Redirection
Former President Donald Trump announced approval of a draft agreement with Iran that would largely reopen the Strait of Hormuz, noting that 100 commercial vessels had already been redirected by the U.S. The move comes as both sides discuss a...
Mortgage Rates Jump to 6.5% as Treasury Yields Surge and Credit Tightens
U.S. mortgage rates climbed to an average 6.5% for 30‑year loans by late May, up roughly 9% since January. The rise mirrors a sharp increase in Treasury yields, including a 30‑year note above 5%—its highest level in 19 years—while credit...
Bitcoin’s Fed Cut Trade Flips as Bond Market Turns Into the Risk
Bond traders now price a roughly 58% probability of a Federal Reserve rate hike by year‑end, pushing the 10‑year Treasury yield to 4.69%, its highest since January 2025. Fed Governor Christopher Waller dismissed any near‑term cut, calling the idea "crazy,"...
Do U.S. Automakers Have a Future in Canada?
U.S. automakers that once dominated Canada’s auto sector are now in retreat as President Trump’s tariffs and trade tensions bite. At their peak, GM, Ford and Stellantis accounted for roughly 40% of Ontario’s exports, but recent duties have slashed cross‑border...
Iran Deal Is ‘Largely Negotiated’ as Trump Teases Strait of Hormuz Re-Opening
President Trump announced that a peace deal with Iran is "near" and that the Strait of Hormuz could reopen within days. The tentative framework includes a 60‑day cease‑fire, limited sanctions relief for Iranian oil and a requirement for Iran to...
Fossil Fuel Investments Are a Fiduciary Risk
The Iran war has underscored fossil‑fuel exposure as a geopolitical liability for investors, especially in Africa where oil price spikes depress local currencies and strain public finances. Trustees, directors and asset managers face fiduciary pressure to manage this volatility, as...
India Should Now Focus on FTA Implementation, Utilisation by Exporters: Experts
India’s trade policy focus must shift from signing free‑trade agreements to ensuring their practical use, experts say. Current utilisation of FTAs hovers around 25%, far below the 70‑80% rates seen in developed economies, leaving a large gap between negotiated market...
Retail Fuel Price Hike 'Inevitable' If Global Oil Pressures Persist: BPCL's Director HR
BPCL’s HR director Raj Kumar Dubey said a further retail fuel price increase is inevitable if global oil market volatility continues. He outlined three policy options: pass the hike to consumers, absorb losses within petroleum firms, or fund the gap...
Iran War Is Exposing South Africa’s Dependency on Diesel: What Went Wrong
The ongoing Gulf war has triggered a sharp diesel price surge in South Africa, with diesel up nearly 60% in Q2 2026 versus a 25% rise for petrol. Because diesel fuels freight, mining, agriculture and backup generators, the higher cost...
IMF Warns EU Debt Could Hit 130% of GDP by 2040, Raising Euro‑Stock Market Risks
The International Monetary Fund warned EU finance ministers that, without policy changes, average public debt could climb to 130% of GDP by 2040 – roughly double current levels. The IMF paper urges reforms, fiscal consolidation and joint borrowing, while member...
Goldman Sachs Forecasts Stronger Dollar as Global Gaps Widen
Goldman Sachs' latest global research report projects a firmer U.S. dollar as growth slows in China and Europe, energy disruptions persist, and AI‑driven investment fuels the American economy. The bank warns that the trend could tighten financing for emerging markets...
U.S. Inflation Gauge Nears 4% as Iran Conflict Fuels Energy Price Surge
The U.S. personal consumption expenditures price index is expected to climb 3.8% year‑over‑year in April, edging close to the 4% mark. The jump reflects a war‑driven surge in energy costs tied to the Iran conflict, marking the fastest two‑month acceleration...
German Export Surge Boosts Q1 Growth, Lifts Euro‑Zone Stocks
Germany reported a 0.3% rise in Q1 2026 GDP, driven by a sharp rebound in exports and a €6 billion ($7 billion) Siemens share‑buyback. The data gives a brief lift to euro‑zone growth outlooks and nudges equity markets higher, even as consumer...
Factory Activity Slows Globally as War‑Driven Inflation Persists
S&P Global’s latest indexes reveal that factory activity slowed or contracted across all major economies except the United Kingdom and the United States. The downturn reflects three months of inflation pressure tied to a war‑induced energy crunch, underscoring the fragility...
Global Bond Yields Surge as Inflation and Debt Risks Prompt Repricing
Analysts say a sharp sell‑off in global bond markets has pushed US 30‑year Treasury yields to 5.19%, the highest since the 2007 crisis, as inflation expectations and sovereign debt‑risk premiums are being re‑priced. The move threatens equities, credit markets and...
ECB Rejects Euro Stablecoin Push, Citing Bank Lending Risks and Digital Euro Tensions
The European Central Bank rebuffed proposals to ease rules for euro‑denominated stablecoins, warning that wider issuance could drain bank deposits, curb lending and complicate interest‑rate policy. The stance deepens a rift with banks and fintech groups as the ECB also...
From Openness to Vulnerability: Mapping the EU’s Foreign Dependencies and Geopolitical Exposure
A new EU study maps foreign‑dependent products, finding 835 items that represent 16% of imports and roughly $440 billion in value. China supplies 47% of these products and now accounts for 80% of renewable‑energy inputs, while the United States provides 11% of...
Strait of Hormuz Disruption Threatens Global Food and Fertilizer Supplies
Analysts warn that a prolonged blockage of the Strait of Hormuz would drive natural‑gas‑based fertilizer prices higher and strain global food supply chains into 2027. The risk is amplified by rising oil prices, El Niño forecasts and already tight margins for...
ECB Weighs First Rate Hike Since 2023 as May Inflation Data Looms
The European Central Bank may raise rates in June after inflation in France, Italy, Germany and Spain stays above target, pitting price‑stability goals against a fragile euro‑zone recovery. The decision will shape euro performance and global FX markets.
Gulf Nations Keep High-Grade Credit Ratings Amid Iran War Tensions
Fitch Ratings and Moody's affirmed high‑grade sovereign credit ratings for the UAE, Saudi Arabia, Qatar, Kuwait and Bahrain as the US‑Iran war escalates. The agencies cite robust fiscal buffers, strong oil export revenues and resilient external positions as the main...
More War-Driven Inflation Seen in Fed’s Favored Gauge
The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index, is projected to have risen 3.8% year‑over‑year in April, pushing the headline rate close to 4%. The jump is driven largely by a war‑induced surge in energy...
U.S. Debt Is the ‘Elephant in the Room’ Amid Bond Market Rout as Fed-Fueled Interest Costs Could Drive Even Larger...
Bank of America warns that a resurgence of “bond vigilantes” is driving a sharp sell‑off in U.S. Treasuries, pushing the 30‑year yield to 5.18%, the highest since 2007. The rally is tied not only to hot inflation and geopolitical tension...
EPU and News Sentiment Since the War
The latest chart from the San Francisco Fed shows a clear split between the Shapiro‑Sudhof‑Wilson News Sentiment Index and Economic Policy Uncertainty (EPU) from 2024 through mid‑2026. After Jan 20 2025, news sentiment dropped noticeably while EPU climbed, a pattern confirmed by...
The Fed’s Worst Inflation Fears May Be Coming True as Consumers Lose Faith in Long-Term Prices—And Even Trump Supporters Doubt...
The University of Michigan’s latest consumer sentiment survey shows inflation expectations climbing, with the year‑ahead outlook rising to 4.8% and long‑run expectations jumping to 3.9%, both above the Federal Reserve’s 2% target range. The uptick is tied to higher energy...
EU's 20th Sanctions Package Forces Kyrgyzstan's Hand on Russia Trade
The European Union’s 20th sanctions package labeled Kyrgyzstan a country of concern after an 800% surge in specialized electronics imports, many linked to drone production, suggested the Central Asian state was facilitating Russia’s war‑economy. In response, Kyrgyzstan’s Justice Ministry suspended...
U.S.-China Summit Leaves Rare‑Earths Policy in Limbo, New Trade Boards Formed
President Donald Trump and Chinese President Xi Jinping concluded a week‑long summit in Beijing without a clear agreement on rare‑earth export controls, leaving U.S. defense and tech firms uncertain. The two sides announced two bilateral mechanisms—a Board of Trade and...