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.
Air Canada Posts Q1 Revenue Surge, Halts Outlook Amid Middle East Conflict
Air Canada reported a 11% rise in first‑quarter operating revenue to C$5.785 bn and a swing to a C$48 m net profit, driven by strong demand and pricing. The airline, however, suspended its annual outlook, citing the volatile Middle East conflict that could affect travel demand.
China’s Soft Power Play in Africa
China has eliminated import tariffs for 53 African countries, effective today, positioning the move as a soft‑power initiative that contrasts with the United States' more punitive trade stance. The policy excludes Eswatini because of its ties to Taiwan, underscoring Beijing’s...
Ghana’s Foreign Reserves Jump to $14.5 Bn as Central Bank Stabilises Economy
The Bank of Ghana lifted international reserves to $14.5 bn, up from $9.1 bn a year earlier, while cutting the policy rate to 14% and reducing public‑debt‑to‑GDP to 45%. The moves have spurred cheaper credit, revived growth and lifted consumer confidence in...
AI Fuels Growth as Middle‑Class Struggles Intensify in U.S. Economy
U.S. GDP grew 2% annualized in Q1 and business equipment outlays jumped 10.4%, underscoring AI’s role in boosting productivity. At the same time, the savings rate fell to its lowest level since 2022 and consumer sentiment hit a record low,...
Bank of England Holds Rate at 3.75% Amid Energy Shock Risks
The Bank of England’s Monetary Policy Committee voted 8‑1 to leave the bank rate unchanged at 3.75% on April 30, citing the risk of material second‑round effects from an energy price shock tied to the Middle East war. The decision...
Treasury Yields Rise as Valero Issues $850M 10‑Year Notes and Adamas Launches $90M Senior Bonds
Valero Energy Corp sold $850 million of 10‑year notes at a 5.15% coupon and Adamas Trust issued $90 million of senior unsecured notes due 2031 as Treasury yields rose. The issuances came as Tradeweb reported over‑50% market share in institutional U.S. Treasuries...
Bank of England Holds Rate at 3.75% Amid Energy Shock Risks
The Bank of England’s Monetary Policy Committee voted 8‑1 to keep the bank rate at 3.75%, citing the risk that the ongoing energy‑price shock from the Middle East war could generate material second‑round inflation effects. The decision signals a cautious...
Red Sea Tanker Transits Jump 66%, Eclipsing Pre‑crisis Levels
Red Sea tanker transits surpass pre-Houthi crisis levels in rush to secure Saudi barrels ▶️379 crude oil tanker transits recorded in March, up 66% month on month ▶️Dark transits surge as many tanker operators opt to disable AIS while sailing past Houthi-controlled...
The Iran War Doesn’t Have to Be a Rerun of ‘That ’70s Show’
The Wall Street Journal op‑ed warns that the Iran‑Israel conflict could push crude to near $100 a barrel, reviving the oil‑price shock that helped trigger the 1970s stagflation. However, the United States now runs a net oil export surplus and...
Agriculture Ministry Yet to Clear Cotton Duty Relief Despite Textile Sector Pressure
The Indian Textile Ministry has asked for a temporary removal or reduction of import duties on raw cotton to lower input costs for apparel exporters amid the West Asia crisis. The Agriculture Ministry, however, has not yet approved the proposal,...
War Sparks Massive Commodity Surge, Stocks Rise, Volatility Falls
Since the start of the Iran war... Jet Fuel: +80% Sulfur: +68% Heating Oil: +56% WTI Crude Oil: +55% Brent Crude Oil: +52% Diesel: +48% Gasoline: +47% Urea: +47% European Nat Gas: +44% Fertilizer: +23% Coal: +13% Palm Oil: +13% Iron Ore: +8% Wheat: +6% S&P 500: +5% $VIX: -15%
Big Money Prints Don't Guarantee Immediate Gold Gains
The point of this statement is massive money creation can cause inflation and asset gains. But owning assets expecting a "big print" isn't necessarily a great idea. The biggest print in history in 2021 and gold took 2...
Namibia Holds Key Interest Rate as Iran War Darkens Outlook
Namibia’s central bank left its main repo rate unchanged at 6.50% for the third consecutive meeting, citing a deteriorating growth and inflation outlook linked to the Iran war. Inflation eased to 2.1% in March, the lowest since 2020, but the...
Are the Ryukyu Islands an Overlooked Flashpoint in the Indo-Pacific?
The Ryukyu Islands, a 55‑island chain linking Taiwan and Japan, are emerging as a strategic flashpoint in the Indo‑Pacific. Beijing views the archipelago as a gateway to extend its naval reach, pressure Taiwan, and secure submarine transit beyond the First...
China Tightens Screws on Rare Earth Production
China’s Ministry of Industry and Information Technology announced draft regulations that would impose strict production quotas and licensing requirements on rare‑earth miners. The measures target over‑production that has depressed global prices and aim to stabilize the market ahead of President...
India Aligns RoDTEP Schedules with Amended Customs Tariff Structure
India has updated its Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to align with the amended customs tariff structure introduced by the Finance Act 2026. Effective May 1, 2026, the revision adds 142 new tariff lines, removes 50,...
View From The Hill: Albanese Sensitive on One Tax Reform that Won’t Be in the Budget
Prime Minister Anthony Albanese pushed back on calls to index income‑tax brackets in the May 12 budget, saying the reform is not a priority. Economists warn that without indexation, inflation‑driven “bracket creep” could lift the average tax rate from 22.8% to...
Contentious EU-Mercosur Trade Deal Takes Provisional Effect
After 25 years of talks, the EU‑Mercosur free‑trade agreement entered provisional application on Friday, despite a pending legal challenge at the EU Court of Justice. The deal removes most tariffs, linking a market of over 700 million consumers across the EU...
Europe Needs Ukraine as It Looks to Counter Growing Russian Threat
European leaders are shifting from viewing Ukraine as an aid recipient to treating it as a core security partner. Ukraine’s armed forces, now the largest and most modern in Europe, lead in drone warfare and are training troops across the...
War‑driven Inflation Could Force More Rate Hikes, Dissenters Warn
In explaining their dissents this week, Kashkari and Hammack cite resurgent inflation risks stemming from the Iran War. Kashkari (below) says a "series" of hikes might be needed if the Strait of Hormuz stays closed, "even at the risk of...
Unexpectedly
Euro‑area growth stalled in Q1 2026, with GDP edging up just 0.1%, far below expectations. Weak industrial orders and a drop in output in Germany, alongside a 0.7% fall in French production, underscored the slowdown, while soaring energy costs from...
Gulf Resolution Needed, Says DHL Chief Fearing for Asia-Europe Trade
DHL chief Tobias Meyer praised the rapid relocation of its Middle‑East express operations after the U.S./Israel strikes on Iran forced a seven‑week closure of Bahrain’s airspace. The company shifted its hub to Muscat and Riyadh, using over‑land trucking backed by...
Kashkari Urges Fed to Keep Policy Flexible Amid Iran War
Minneapolis Fed President Neel Kashkari: "Why I dissented" He says the policy statement should signal the next rate move could be a cut or a hike given the broader range of outcomes from the Iran war. He lays out two modalities: a...
Not So Strait-Forward
Global markets face heightened stagflation risk as the Strait of Hormuz remains closed, keeping energy prices elevated. In the United States, the Federal Reserve is expected to hold rates steady with only a single cut later in the year, while...
Sell in May and Go Away? Maybe Not
U.S. equities have surged, with the S&P 500 up 9.2% through April and on track for its strongest April performance since 2020. The rally is fueled by easing Iran tensions, expectations of the Strait of Hormuz reopening, and solid Q1 earnings....
Powell Is Right to Stay at the Fed; the Central Bank Needs Continuity
Jerome Powell announced he will remain on the Federal Reserve Board after his chairmanship ends on May 15, citing ongoing legal threats and political pressure. The move breaks the usual tradition of stepping down to preserve continuity amid a Justice...
Households Shift to Short-Term Bonds After 2024 Rate Cuts
"Since the Fed started cutting interest rates in 2024, households have been buying the front end of the yield curve and selling the long end" -Apollo Slok
German Unemployment Hits 6.4%, Over 3 Million Jobless
Good Morning from Germany, where econ stagnation is increasingly weighing on the labor market, despite demographic change. In April, the unemployment rate rose to 6.4%, and the seasonally adj number of unemployed climbed above 3 million for 1st time since...
Box Lines’ Return to Suez Would Open ‘Release Valve’ to Overcapacity
Analysts warn that the container market’s current tightness is largely artificial, sustained by vessels rerouted around the Red Sea rather than genuine demand. A faster‑than‑expected return of box‑line ships to the Suez Canal could unleash a sudden capacity surge, acting...
USTR's Section 301 Roadmap Lacks Targeting and Metrics
"The road map the USTR has presented in the most important Section 301 investigation, looking into 'excess capacity' in other nations, is neither targeted nor aimed solely at abusive trade partners. It is also not based on any defensible metric"...
Post‑COVID US Consumer Spending Surge: Will It Last?
Since COVID, the US has been riding a sustained surge in consumer spending. Will it continue? Today's Chartbook Top Links just dropped, check it out: https://t.co/6zzy84M54y
Iran War: Trump Mulls Kinetic Options, Mojtaba Warns, US Consumers Suffer
President Trump received a CENTCOM briefing outlining possible kinetic options against Iran, amid growing pressure from his inner circle and Zionist advocates for limited air strikes. While he previously favored maintaining a naval blockade of the Strait of Hormuz, the...
M2 Growth May Have Followed, Not Fueled Economy
What if over the last 50 years M2 grew WITH the nominal economy and didn't CAUSE the growth of the nominal economy?
Becoming
I might even be a little more hawkish than this Hammack statement, where I’m no longer as sure about the downside risks to growth and employment: https://t.co/uk3gVJjAZQ
May Day: Market Looks for US Leadership
US markets entered Friday with the dollar weakening after a probable ¥5.4 trillion ($34.5 bn) yen intervention by Japanese authorities. The euro climbed toward $1.1750 while sterling rebounded above $1.36, reflecting shifting expectations after five G10 central banks met. Futures now price...
Strong Trade Ties Help Keep Nations at Peace
"economists have swooped in with a smattering of new studies arguing that yes, strong trade ties are pacifying." https://t.co/cBadyzUCSb https://t.co/h2JB5bvK4N
BOJ's Massive Yen Intervention Yields Little Effect
From our latest @ForwardGuidance…”throwing good money after bad”… BOJ intervention >2x the size of recent Yen purchases with minimal impact. https://t.co/Unck13wfjJ
Law without Borders? Extraterritorial Regulation and Unilateral Action
National and regional powers are increasingly using extraterritorial regulations to control cross‑border economic activity, challenging the multilateral order. The United States, China, and the EU are deploying unilateral measures in sanctions, digital policy, supply chains, competition law, and data protection....
Geopolitics, Fed Legacy, and Dollar Surge Dominate Podcast
On this week's podcast: 1) Is the Iran crisis close to a tipping point? 2) What is Powell's legacy? 3) Is US exceptionalism back and the dollar about to rip? And an unusual amount of bickering because @freyabeamish just wont stop talking about abstract...
Yellen Pushes Massive Fiscal Spending Despite Recent Money Surge
Yellen (USTreasury then) said it’s “time to go big” fiscal — and of course gets a complete free pass from financial media, why? *Over 40% of all dollars ever created were done so in 2020-2021. cc @NickTimiraos
Inventories Acting as Shock Absorber of Global Oil System
J.P. Morgan analysts say global oil inventories are now the primary shock absorber amid war‑driven supply disruptions. The world entered 2026 with 8.4 billion barrels in storage, 6.6 billion on‑shore and 1.8 billion afloat, but only about 0.8 billion barrels are readily usable without...
Dollar Softens as Markets Await US Leadership
May Day: Market Looks for US Leadership: In holiday-thinned markets, the dollar is mostly softer as North American leadership is awaited. In light of yesterday’s surge in the yen, and contrary to our expectation, it does appear that Japanese officials…...
Derivatives Trim BoC Rate Outlook by 22bps, Hikes Discounted
5 G10 central banks met this week and they all delivered to varying extents hawkish holds. The derivatives market adjusted expectations for this year’s course by 22 bp for the Bank of Canada. Two hikes are now...
Uncertainty Delays Decisions, Dampening Economic Growth
Why do economists obsess over uncertainty? Because waiting is easy. If the news might clear soon, firms delay big irreversible decisions. Multiply that across the economy and growth softens. https://t.co/qHrOYGLij5
Taiwan: World's Most Perilous Chokepoint Threatening Global Stability
NEW ODD LOTS: Taiwan is the world's most perilous chokepoint @tracyalloway and I talk to @eyckfreymann, author of the new book 'Defending Taiwan: A Strategy to Prevent War with China, about the high stakes and high risk if China moves on Taiwan...
Blockade Squeezes Iran yet Fuels Its Resilience
The blockade squeezes Iran—and props it up at the same time. By lifting oil prices it also funds Iranian resilience and strains the global economy It’s a slow, leaky tool, not a decisive one. https://t.co/2HUjqpRXMj #OilMarkets #Hormuz #Geopolitics #EnergyCrisis #Sanctions
China's Q1 Gold Demand Hits Record 362 Tons
China's gold demand in Q1 just hit a RECORD HIGH of 362 tons. BUY GOLD, WEAR DIAMONDS. https://t.co/i4imHfn9jj
Japan Likely Intervened Heavily; Fed Remains Sole Cut Prospect
It is looking more likely that Japan did materially intervene yesterday and for a bit more than it did on average in 2024. Today's holiday has thinned activity. US leadership sought. Fed is still only major central bank where mkt...
Economic Fury Misses: No Shock, No Inflation, No Uprising
Bessent's Economic Fury has failed No sustained supply shock, no inflation surge, no public backlash. When the pressure doesn’t move prices, people, or politics, it’s not a strategy—it’s a miss. #OilMarkets #Geopolitics #EnergyCrisis #Inflation #Strategy
Japan's FX Interventions: Temporary Fixes Mask Denial
There's 2 problems with Japan's FX interventions. First, they're only a temporary fix and never reverse the falling trend of the Yen. Second, they signal a gov't that keeps repeating a failed strategy instead of doing what's right, i.e. they...