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.
What China Can Learn From Japan About Escaping Deflation
Japan has finally emerged from its two‑decade deflationary slump through a mix of aggressive monetary easing, targeted fiscal stimulus, and structural reforms. China, meanwhile, is slipping back into deflation as its property sector falters and external shocks, such as the Gulf conflict, dampen demand. The article argues that China can avoid Japan’s prolonged stagnation by adopting a calibrated policy response and modernising its labour and technology base. It highlights the divergent paths the two economies have taken since the pandemic and the war in Ukraine.
Britain’s Politicians Need to Worry Less About the Bond Markets – and More About the Bank of England | Daniela...
British politicians are urged to shift focus from bond‑market panic to the Bank of England’s role in shaping borrowing costs. The BoE has sold roughly £134 bn ($167 bn) of gilts since 2022, adding a 0.7 percentage‑point “Bailey premium” to UK debt rates,...
BoE's Taylor: Probably Correct to Expect Need for Rate Hikes Under BoE's Scenario C
Bank of England chief economist Huw Taylor said Scenario C, the most adverse outlook, likely requires rate hikes to 5.25% by early 2027 amid a prolonged energy shock with oil above $120 per barrel. He noted that current policy is already 100...
Chancellor Rachel Reeves Statement to Parliament
Chancellor Rachel Reeves told Parliament that the UK posted the fastest G7 growth in Q1 2024 at 0.6%, beating OBR forecasts and prompting an IMF upgrade. She highlighted a £20 billion ($25 billion) reduction in borrowing, a faster‑than‑expected fall in inflation and a...
US Firms Commit over USD 60 Bn Investment in Last 6 Months: Piyush Goyal
Commerce Minister Piyush Goyal announced that U.S. companies have pledged more than $60 billion in investment in India over the past six months, highlighted by large data‑centre projects from Amazon and Google. He emphasized India’s trusted IP regime, deep talent pool...
What Happens to Oil if Iran Permanently Taxes Hormuz Traffic?
Analysts say a permanent tax on Strait of Hormuz traffic would likely cause a modest rise in crude prices and slightly lower shipping margins. Exporters would seek alternate routes, spurring pipeline projects through the Red Sea, Syria, Iraq and Turkey....
What a Kevin Warsh-Led Fed Could Mean for the Big Bank Stocks
Kevin Warsh has taken over the Federal Reserve, signaling a shift toward aggressive balance‑sheet reduction and deregulation. While his interest‑rate stance mirrors Jerome Powell’s, Warsh plans to sell Treasury and mortgage holdings, pulling liquidity from the banking system. He also...
US Growth Nowcast for Q2 Holds Firm as Inflation Risks Mount
The median nowcast from CapitalSpectator shows U.S. real GDP growing 2.4% in Q2, up from 2.0% in Q1. The revision follows a previous 2.2% estimate and reflects stronger payroll, industrial production and retail sales data. Inflation risks are rising due...
Fed Rate Cuts Expose Fragile Risk Asset Dependence
Sock Puppets to Stocks? Crude, Gold, Commodities, Bitcoin, Bonds The Federal Reserve's 2025 rate cuts, despite the most inflated stock market vs. GDP since before the Great Depression, may have reinforced how dependent most risk assets are on the beta tide...
Fed Delay May Ignite Inflation Like 1928 Bubble
Adding Fuel to Inflation Fire May Not Fare Well Federal Reserve easing in 2025, despite the greatest stock market inflation since 1928-29, may be a top force buttressing consumer prices and what parabolic rallies in gold and silver sniffed out. History...
Stocks Slip Before the Open as Oil Rises on U.S.-Iran Peace Deal Uncertainty, PMI Data in Focus
U.S. equity futures opened lower, with the S&P 500 down 0.40% and the Nasdaq 100 down 0.55%, as oil prices surged over 2% on fresh Iran‑related geopolitical tension. The rise in WTI crude pushed the 10‑year Treasury yield to 4.62%, reviving...
Malaysia's Trade Hits Record RM1.127 Trillion in Jan‑Apr 2026, Up 15.3% YoY
Malaysia's external trade surged 15.3% year‑on‑year to a historic RM1.127 trillion ($248 bn) in the first four months of 2026, with exports jumping 19% to RM609.31 bn. The boom, led by AI‑enabled electronics and a push into African and Eastern European markets, underscores...
European Shares Edge Higher as Middle East Tensions Loom, Close Brothers Posts Solid Q3
European equity indices inched up on May 21 as investors weighed the fallout from the Iran‑Israel war and the UAE‑Israel diplomatic frictions. The UK‑based specialist lender Close Brothers posted a solid third‑quarter performance, while Italy’s push for a $22 bn trade...
Indonesian Rupiah Hits Record Low as Commodity‑Control Policy Fuels Market Anxiety
The Indonesian rupiah slid to a record 17,600 per US$1, breaking the 17,500 psychological barrier, as President Prabowo Subianto unveiled a state‑run export regime for palm oil, coal and ferroalloys. The move sparked parliamentary grilling of Bank Indonesia’s governor, calls...
Goldman Sachs Flags Record 8.7 Million‑Barrel Daily Oil Drawdown, Shrinking Global Reserves
Goldman Sachs said global crude and product stockpiles fell by a record 8.7 million barrels per day in May, almost twice the average drawdown since the Middle East conflict began. The rapid depletion of strategic reserves signals tighter supply and could...
War Weighs on Global Growth With Inflation Worries Intensifying
Global growth is losing steam as the war‑driven energy crunch pushes inflation higher for a third month. Purchasing‑manager surveys show manufacturing contraction across Europe, with France and Germany leading the decline, while the UK’s output fell for the first time...
RBI Rate Hikes to Start in June, Says Standard Chartered
Standard Chartered economists expect India’s central bank to begin tightening as early as June, with a total 50 basis‑point increase split between June and August. The move is driven by rising inflation risks from higher crude oil prices, global yield...
EU Cuts Growth Forecasts as Iran War Drives up Inflation
The European Commission lowered its 2024 growth projection to 0.2%, down from 0.7%, while raising the inflation outlook to 5.3% from 4.9%. The downgrade reflects heightened energy costs and supply‑chain disruptions linked to the escalating Iran‑Israel conflict. Analysts warn that...
War Weighs on Global Growth With Inflation Worries Intensifying
Global growth is losing steam as a war‑induced energy crunch pushes inflation higher for a third consecutive month. Purchasing‑manager surveys from Australia to Europe show manufacturing activity slowing or contracting in May, with the sole exception of the United Kingdom....
Euro-Zone Growth Is Buckling Under Weight of War Impact
The European Commission has sharply lowered its euro‑area growth forecast to 0.9% for 2026, down from 1.4% last year and below the November consensus. Inflation is set to accelerate to the fastest rate since 2023 as energy costs surge amid...
The Other China Shock
The article examines the emerging "other China shock," where rising wages and tighter regulations in China are prompting multinational manufacturers to relocate labor‑intensive production to neighboring Asian economies such as Vietnam, Bangladesh, and Mexico. It traces the historical pattern of...
GBP/CHF Rebounds as UK Fiscal Worst-Case Fears Fade, Head-and-Shoulders Bottom Forming?
Sterling rallied this week as fears of a UK fiscal crisis receded, driven by Andy Burnham’s market‑friendly remarks and an IMF upgrade to the 2026 growth outlook. The softer political tone and lower oil prices trimmed the UK risk premium,...
Euro-Zone Business Activity Shrinks at Fastest Since 2023
Euro‑area business activity contracted sharply in May, with the S&P Global composite PMI dropping to 47.5 from 48.8, the fastest slowdown in 2½ years. Manufacturing held steady thanks to precautionary inventory builds, while the services sector fell sharply. Input‑cost and price inflation...
Starmer Crisis and Iran Shock Combine to Shrink UK Private Sector
British private sector output fell for the first time in over a year as the S&P Global PMI slipped to 48.5 in May, well below the 51.6 forecast and the 50 growth threshold. The decline reflects a perfect storm of...
UK Agrees £3.7bn Trade Deal with Six Gulf States
The United Kingdom has sealed a trade agreement with the Gulf Cooperation Council’s six members—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates—valued at roughly £3.7 bn (about $4.6 bn). The pact eliminates an estimated £580 m ($725 m) in annual tariffs...
Bond Market Pressures ECB to Hike Despite Credibility Doubts
🇪🇺 Olli Rehn is basically giving up to the idea that the ECB "needs to hike" to "preserve credibility". The bond market is doing part of the heavy lifting for the central bank, but it’s also forcing their hand because...
Trump’s Policies Drain US Economy Amid AI Boom
Some fun/depressing napkin-math from The Economist on how much Trump's trade & immigration policies - and chaotic policymaking overall - are costing the otherwise-solid US economy (thanks mainly to the AI boom): https://t.co/sAdCJvmSaF https://t.co/cDUJmNpHrW
Where Inflation Is Highest In Europe In 2026
Inflation across Europe has eased from peak levels but remains elevated, with Romania topping the chart at 9.0% annual price growth in early 2026. Kosovo (6.5%) and Bulgaria (6.2%) round out the three highest rates, highlighting persistent pressure in the...
Who Holds Federal Debt As of March 30
The latest Treasury data shows the public debt‑to‑GDP ratio climbing, with a detailed split of holders. Foreign non‑official investors now own roughly 15% of the debt, while foreign official central banks are essentially saturated. The Federal Reserve’s portfolio, shown as...
China’s Anti-Dumping Investigation on Pork Imports From Europe: A Calibrated Retaliation
China has launched an anti‑dumping investigation into EU pork, focusing on Spanish offal, as a calibrated retaliation for the EU’s anti‑subsidy probe into Chinese electric vehicles. The move is designed to pressure Spain, a pivotal EU Council vote‑caster, by exploiting...
China’s Yuan Hits 3-Year High as Global Banks Issue Bullish Forecasts
China’s central bank set the yuan’s daily reference rate at its strongest level since early 2023, pushing the currency to a three‑year high against the US dollar. Global banks are now issuing bullish forecasts, expecting further appreciation as China’s monetary...
BOJ Should Raise Policy Rate at Appropriate Pace, Says Board Member Junko Koeda
Bank of Japan board member Junko Koeda signaled support for raising the policy rate, noting that underlying inflation could exceed 2% and that a hike may be appropriate as early as the June 16 meeting. She voted with the majority...
China and Russia Seal Over 40 Agreements, Boosting Multipolar Trade
President Vladimir Putin and President Xi Jinping signed over 40 agreements in Beijing, covering economics, energy, transport and a joint declaration for a multipolar world. The deals deepen trade ties worth $240 bn and shift settlements to rubles and yuan, signaling...
UN and IMF Cut 2026 Global Growth Forecasts to 2.5% and 3.1% Amid Middle East War
The United Nations and International Monetary Fund have each trimmed their 2026 global GDP growth forecasts—UN to 2.5% and IMF to 3.1%—citing the war in the Middle East, soaring energy costs and heightened inflation. The downgrade threatens emerging‑market economies that...
ECB Poised for June Rate Hike as Inflation Stays Above Target, July Remains Uncertain
European Central Bank policymakers are signaling a near‑certain interest‑rate increase in June as inflation runs at 3%, well above the 2% target. At the same time, the bank is expected to stay non‑committal about a follow‑up move in July, preserving...
Dollar Slides as Iran Cease‑fire Hopes Rise; Yen Nears 160 per Dollar
The U.S. dollar fell 0.12% to 99.19 on the dollar index, marking its steepest weekly decline since January after President Donald Trump signaled progress on a cease‑fire with Iran. At the same time, the Japanese yen rose to 158.88 per...
Philippines Treasury Auction Fails as All Bids Rejected, Yield Spike Triggers Liquidity Concerns
The Philippine Treasury rejected every bid for its 10‑year reissued bond auction on Tuesday, despite demand of PHP 33.7 billion (≈$602 million) against a PHP 30 billion (≈$535 million) offer. Investors demanded yields above 7.9%, far higher than recent secondary‑market rates, signaling stress in sovereign debt...
US Gas Prices Hit $4.48/gal Ahead of Memorial Day, Near All‑Time Highs
GasBuddy projects the national average regular‑gas price to reach $4.48 per gallon this Memorial Day, 42% higher than a year ago and the second‑highest on record. The surge, driven by the Iran‑Hormuz crisis and record‑low U.S. oil inventories, is pushing...
Australia Jobless Rate Hits Highest Since 2021 in April
Australia’s unemployment rate climbed to 4.5% in April, the highest level since 2021, as the labour market showed its first signs of cooling. The Australian Bureau of Statistics reported a loss of 18,600 jobs, reversing March’s 17,900‑job gain, while full‑time...
Inflation Jumps to 3.8% as New Fed Chair Kevin Warsh Faces Immediate Test
Consumer prices climbed 3.8% year‑over‑year in April, the strongest pace since May 2023, while wholesale prices surged 6%—the biggest 12‑month rise since December 2022. The data arrive just days after the Senate confirmed Kevin Warsh as the next Federal Reserve...
Indonesian President Announces Plan to Centralize Control of Key Commodity Exports
Indonesian President Prabowo Subianto announced a plan to place Indonesia’s key commodity exports—palm oil, thermal coal and nickel—under direct state control. A new sovereign‑wealth‑backed enterprise, Danantara Sumberdaya Indonesia, will own 99% of the export entity and exporters must deposit all...
U.S. Treasury Yields Hit Multi‑Year Peaks, Dragging Down U.S. and Australian Markets
U.S. Treasury yields jumped to 4.67% on the 10‑year and 5.18% on the 30‑year, their highest levels in years, prompting sharp declines in major equity indices on both sides of the Pacific. Analysts cite stubborn inflation, Fed rate‑risk and Middle‑East...
US‑Israel Conflict Threatens Iran’s Oil Market Stability
Fabulous work explaining the oil consequences of the US/Israel War on Iran here — featuring @eurasiagroup colleague @gregbrew24. https://x.com/Phil_Mattingly/status/2057127031020695987/video/1
Powell’s Eight-Year Fed Tenure: Inflation Shocks and Independence Fight
From the FT article, “Inside Jay Powell’s turbulent eight years leading the Fed: Central bank chair’s tenure was marked by inflation shocks and his battle to protect the institution’s independence.” #economy #inflation #markets
Colombia's April FDI Slumps 8.7% to $921 Million, Oil and Mining Still Dominate
Colombia's central bank reported that foreign direct investment fell 8.7% in April to $921 million, down from $1.009 billion a year earlier. Oil and mining absorbed roughly 80% of the total, while non‑traditional exports grew 13%. The decline reflects policy uncertainty, a...
Brazil's Money Supply Outpaces Golden Growth, Fuels Inflation
#BrazilWatch🇧🇷: Brazil's CPI accelerated to 4.4%/yr in April. Brazil’s M4 is growing at 10.8%/yr. That is ABOVE Hanke’s Golden Growth Rate of 7.1%/yr, a rate consistent with hitting its 3.0%/yr inflation target. INFLATION STORY = A MONEY SUPPLY STORY. https://t.co/fXT7WuR6yE
Inflation Stays Above 2% Target for 62 Months
This is an all-time great line from today's FOMC minutes. Can someone please remind the Fed that inflation has been above their 2% target for...62 straight months.
Woodside CEO Says Iran War Will Drag Down Global LNG Supply Longer Than Expected
At the Australian Energy Producers Conference in Adelaide, Woodside Energy CEO Liz Westcott warned that the war in Iran will depress global liquefied natural gas (LNG) supply far longer than markets anticipate. She said the industry and consumers are underestimating...
Europe Has Its Own Version of the Inflation Reduction Act That Could Impact US Manufacturers
The European Union’s Industrial Accelerator Act (IAA), unveiled in March 2026, embeds "Made in EU" and low‑carbon requirements into public procurement and state‑aid rules, effectively turning market access into an industrial‑policy tool. Unlike the U.S. Inflation Reduction Act, which subsidizes...
Fertilizer Prices Surge as Iran War Triggers EU Aid and US Farmer Crisis
The European Commission announced emergency funding for farmers as the Iran war pushes global fertilizer prices up 67%, while a new American Farm Bureau survey finds 70% of U.S. producers cannot afford the fertilizer they need. The twin shocks threaten...