Argentina in Talks to Extend China Currency Swap Even as Repayments Near Completion
Argentina is negotiating an extension of its currency swap with China as it nears full repayment of the activated portion, now down to about $675 million from a $5 billion peak. The swap, originally signed in 2009 and renewed in 2023, provides a contingent credit line of up to $19 billion, though only a fraction has been used to bolster reserves. Central bank chief Santiago Bausili rejected rumors of termination, emphasizing talks to keep the facility beyond its July expiry. The negotiations occur amid U.S. pressure on President Javier Milei to curb reliance on Beijing’s financing.
Weak Rupiah Puts Pressure on Strategic Projects
Indonesia’s weakening rupiah is inflating the cost of imported inputs for its National Strategic Projects, prompting contractors to warn of tighter margins. Projects such as the trans‑Sumatra toll road and the Giant Sea Wall, which rely heavily on steel, bitumen...
Benign UK Inflation Data Reduces Chance of June Rate Hike
UK inflation eased to 2.8% in April, below consensus, driven by lower regulated prices and a dip in travel costs. The modest 0.5‑point energy price lift was offset by an 0.8‑point reduction in administrative charges. Analysts now see inflation hovering...
Brits Aren’t Spending Enough – Time for Splash Out to Help Out
UK households are now saving at a 10% ratio and spending only 0.8% annually, the lowest growth in decades, while household debt has fallen to 117.5% of income. Business investment remains stagnant, with the Gross Capital Formation rate at a...
Conservatives Have the Right Diagnosis, but Can They Cure Britain’s Ailments?
Shadow Chancellor Mel Stride used a Centre for Policy Studies keynote to stress Britain’s fragile fiscal credibility, noting public debt now sits at about 100% of GDP and markets remain jittery. He argued that the Conservative Party must rebuild trust...
Inside Jay Powell’s Turbulent Eight Years Leading the Fed
Jerome Powell took the Federal Reserve helm in February 2018 and spent eight turbulent years steering U.S. monetary policy through a pandemic‑driven recession, soaring inflation, and intense political scrutiny. He weathered repeated public attacks from former President Donald Trump, who...
China to Buy 200 Boeing Jets and Ease Rare Earth Curbs in US Trade Breakthrough
China announced a sweeping trade package that includes a purchase of 200 Boeing jets, a review of rare‑earth export licences for civilian use, and reciprocal tariff cuts on at least $30 billion of goods each way. The deal also restores registration...
10-Year Yield Eyes 4.75 After Violent Breakout, Opening Risk Toward 5%
U.S. 10‑year Treasury yields surged past the 4.75% mark, reaching 52‑week highs and the strongest levels since early 2025. The breakout was sparked by geopolitical tension after President Trump’s China trip failed to secure an Iran breakthrough, keeping Brent crude...
Measuring Capital Account Openness: Why Intensity Matters
The IMF‑backed FinOpen index introduces a granular, intensity‑based measure of capital‑account openness, moving beyond the binary Chinn‑Ito and FKRSU scores. By merging narrative assessments with detailed policy actions, FinOpen assigns a 0‑1 score that reflects both the level and the...
When Energy Shocks Bite Harder: Non-Linear Inflation Dynamics
A new ECB‑backed study shows that euro‑area inflation reacts disproportionately to large energy price shocks, a non‑linear pattern that linear models miss. Using a hybrid Bayesian Additive Regression Trees (BART) and VAR framework, the authors identify medium‑sized shocks in April 2026...
‘Numbers Are Getting Worse’: The Head of the IMF on the Iran War Shock, Inflation, AI Risks, and More
IMF Managing Director Kristalina Georgieva warned that oil prices hovering above $100 a barrel are pushing inflation, borrowing costs and financial‑stability risks higher, threatening a slowdown in global growth. She highlighted the emerging Europe‑Gulf partnership, emphasizing deeper trade, defense cooperation...
Putin Is Pushing for a Blockbuster Oil and Gas Deal in China. Will He Get It?
Russian President Vladimir Putin arrived in Beijing seeking a multi‑billion‑dollar oil and gas partnership with state‑run China National Petroleum Corp. The talks focus on long‑term supply contracts, potential yuan‑based settlements, and a pricing formula tied to global benchmarks. Negotiations come...
Dispatch From Bucharest: NATO’s Center of Gravity Is Shifting Eastward
The Bucharest Nine and Nordic Allies summit in Romania underscored NATO’s eastern and northern flanks as a new strategic center of gravity. Leaders from Central‑Eastern Europe, the Nordics, NATO Secretary‑General Mark Rutte and Ukraine’s President Zelenskyy called for stronger air...
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TRANSPORT COSTS: SA Commuters Cut Back on Groceries as Taxi Fares Rise, Drivers Plead for Subsidies
Fuel prices in South Africa jumped by R6.53 per litre (about $0.34) after the US‑Israel war on Iran began, prompting the South African National Taxi Council to announce fare hikes of R2‑R6 for city trips and R10‑R30 for long‑distance routes....
Investors Fear Another Surge in Inflation
Global bond markets are spiking, with 30‑year government yields hitting record levels: Japan above 4%, the United States over 5%, and Britain nearing 6%. Higher yields translate into steeper borrowing costs for governments and push mortgage rates upward for consumers....
After the Iran War, the Gulf’s Next Economic Phase Awaits
The Atlantic Council warns that after the Iran‑related conflict, GCC nations must rebuild growth by shifting from oil‑centric models to diversified economies. Disruptions to the Strait of Hormuz highlighted the vulnerability of crude, LNG and chemicals flows, while sovereign wealth...
Political Interference in the Fed Could Backfire, Push Rates Higher: Expert
Johns Hopkins political‑science professor Nicolas Jabko warns that political pressure on the Federal Reserve could backfire, driving inflation and mortgage rates higher. He points to Russia and Turkey, where government interference led to 14.5% and 37% policy rates, as cautionary examples....
Inflation Fears Cloud G7 Economic Agenda as Iran War Persists
The G7 finance ministers and central bank governors met in Paris and pledged to work together to blunt the inflationary impact of the ongoing Iran war on global energy and food prices. They emphasized restoring safe transit through the Strait...
How Global Economic Imbalances Resemble an Ancient Parable
International Monetary Fund deputy chief Gita Gopinath warned that today’s global imbalances echo the U.S.-Japan tensions of the 1980s and the pre‑2008 buildup, but with a different risk profile. She highlighted that surplus economies like China continue to export savings...
Kevin Warsh’s First Meeting as Fed Chair
Kevin Warsh, President Trump’s nominee, took the helm of the Federal Reserve on May 19, 2026, and convened his first policy meeting amid a volatile macro backdrop. Inflation readings have softened, yet remain above the 2% target, while the labor...
UK Wage Growth Slows and Unemployment Rate Rises as Companies React to Iran War – as It Happened
UK wage growth has decelerated while the unemployment rate jumped to 5%, the highest level in six years. The labour market shed 100,000 jobs, marking the steepest monthly decline since 2020. Economists say the weaker payroll data reduces the likelihood...
EU Mulls Rules to Reduce Reliance on China for Critical Components
The European Union is drafting legislation to curb its reliance on Chinese suppliers for critical components such as semiconductors, rare‑earth minerals and advanced batteries. The European Commission’s proposal introduces stricter import vetting, a €10 billion fund to spur domestic production, and...
US Treasuries Losing the Control They Had
U.S. 10‑year Treasury yields have broken the historic 4.5% support, climbing toward a 4.75% overshoot as real yields rise, not inflation expectations. The surge follows net selling after the US‑China summit and heightened geopolitical tension around the Strait of Hormuz....
Statistics Canada Reveals April Inflation Figures
Canada’s annual inflation rose to 2.8% in April 2026, up from 2.4% in March, as gasoline surged 28.6% year‑over‑year and broader energy prices rebounded after the 2025 carbon‑levy removal. The jump was partly offset by slower rent growth, though rents...
Despite Summit Pledges, Don’t Expect US-China Trade to Improve
At a Beijing summit, U.S. President Joe Biden and Chinese President Xi Jinping pledged a stable, constructive relationship and unveiled joint trade and investment councils, sparking optimism for easing long‑standing tensions. Yet recent U.S. actions—including an investigation into revoking China’s...
How China’s Trade Is Holding Back Developing Countries (Episode 215)
In the latest Trade Talks episode, PIIE economists Chad Bown and Arvind Subramanian argue that China’s export‑driven model is increasingly constraining growth prospects for developing economies. They point to massive subsidies, overcapacity in sectors such as steel and solar, and...
For the ECB, the only Way Is Up
The European Central Bank is poised to raise interest rates at its June 11 meeting as persistently high energy prices keep inflation above its March baseline. ECB chief economist Philip Lane highlighted that a global energy shock—such as a closure of...
Trump Delays Iran Strike After Gulf Allies Push for Diplomacy
President Donald Trump announced a postponement of a planned U.S. strike on Iran after Saudi Arabia, Qatar and the United Arab Emirates urged the United States to give diplomacy more time. The delay prompted a modest pullback in crude prices,...
European Shares Rise on Trump’s Iran Comments
European equities edged higher on Tuesday as the Stoxx 600 rose 0.2% to 611.22 points following President Donald Trump’s comment that a "very good chance" exists for a deal to limit Iran’s nuclear programme. Oil prices slipped about 2% but remained...
No Feelgood Factor for Reeves as Iran War Snuffs Out Economic Upturn
UK unemployment rose back to 5% in March, the first set of figures directly impacted by the Iran war, erasing a brief dip to 4.9%. Pay‑rolled jobs fell by 100,000 in April, marking the third‑largest monthly decline since 2014, while...
Dreadful UK Jobs Report Questions Need for Rate Hikes
The latest UK jobs report shows a headline drop of 100,000 in payroll employment, a rise in the unemployment rate to 5.0%, and private‑sector wage growth slowing to an annualised 0.6%, the weakest since 2015. While the employment decline is...
UK Job Cuts Accelerate as Iran War Casts Shadow on Outlook
UK employers shed 100,000 jobs in April, the sharpest payroll decline since the pandemic began, pushing total cuts to over 140,000 in the past three months. Unemployment rose to 5.5% in March, the highest rate since 2015, while vacancies fell...
Fears of New China Shock as EU Industry’s Reliance on Imports Grows
Europe is confronting a renewed "China shock" as imports of Chinese components surge, threatening local factories and prompting fears of de‑industrialisation. Data show the EU sources 88% of amino acids and 96% of polyhydric alcohols from China, while Germany’s machinery...
What China’s Purchase of US Farms Means for Global Trade
China has pledged to buy at least $17 billion of U.S. agricultural products each year, on top of existing soybean commitments, for the next three years. The deal could lift total U.S. farm exports to $28‑30 billion annually, well above last year’s...
LEI for the Euro Area Fell in April
The Conference Board reported that the Euro Area Leading Economic Index (LEI) fell 0.4% in April 2026 to 97.5, extending a six‑month decline of 1.2%—a slower pace than the previous half‑year’s 1.4% drop. The Coincident Economic Index (CEI) held steady...
The Bond Market Has a Warning for the Fed: Get Serious About Inflation and Potential Rate Hikes ASAP
The Treasury market, encompassing roughly $30 trillion of U.S. debt, is seeing yields climb sharply as investors dump bonds worldwide. Fed officials have a narrow window before the June policy meeting to signal a tougher stance on inflation, especially given heightened...
China's April Consumption, Factory Output Growth Slowest in Years
China’s April retail sales rose a mere 0.2% year‑on‑year, the weakest gain since December 2022, while industrial production expanded 4.1%, its slowest pace since July 2023. The data underscore a widening gap between tepid domestic demand and a still‑robust export sector that...
Oil Prices Fall as Trump Postpones Iran Strike, Easing Supply Disruption Fears
Oil prices slipped on Tuesday after President Donald Trump announced a delay to a planned strike on Iran, calming concerns of a supply shock in the Gulf. Brent July futures fell more than 2% to $109.15 a barrel, while WTI...
The Devil Is in the Tail: How Firms' Beliefs About Rare Macroeconomic Disasters Shape Investment
A new paper by Menkhoff (2026) uses the German ifo Business Survey, an RCT, and scenario experiments to show that firms’ beliefs about rare macroeconomic disasters directly shape their investment plans. CEOs assign a median 50% probability to a 5%...
Odds Against Rate Cuts High as New US Fed Chair Set for Swearing In
Kevin Warsh was confirmed by the Senate and will be sworn in as the next Federal Reserve chair, replacing Jerome Powell. Prediction‑market platforms now price a 38.2% chance of a Fed rate cut before 2027, down sharply from February’s near‑certain...
The Strait of Hormuz Crisis Is Cracking the Petrodollar System
The 13‑week closure of the Strait of Hormuz has cut roughly one‑fifth of Gulf oil exports, forcing Asian importers to seek direct, often opaque, agreements with Gulf producers and Iran. Tankers are slipping through the waterway with AIS off, while...
The Oil Market Is Reaching a ‘Tipping Point’ that Could Create Problems for Stocks, According to This Wall Street Legend
Wall Street veteran Roger Altman warned that a rapid rise in oil prices could spark a second decade‑long inflation shock, threatening the equity market’s recent resilience. Brent crude jumped 1.4% to over $110 a barrel and WTI rose 1.3% to...
Bond Markets Overpowering the AI Trade
Investors are still chasing AI‑driven equities while bond markets regain dominance. U.S. 10‑year Treasury yields have risen to 4.63% and Japan’s 30‑year government bond yield topped 4.2%, ending a decade of ultra‑low rates. Higher sovereign yields threaten the cheap‑capital environment...
How Much Is Donald Trump Costing America’s Economy?
The Economist estimates the economic drag from Donald Trump’s policy volatility by comparing U.S. growth to peer economies. In 2025, America’s GDP expanded 2.1% while Britain, France, Japan each hovered around 1% and Germany stagnated. Despite trade wars, deportations and...
Emerging Markets Debt Blended Total Return Monthly Strategy Update
Loomis Sayles released its April 2026 Emerging Markets Debt Blended Total Return update, highlighting a 2.1% month‑over‑month gain in the blended EM debt index. The report notes a modest reduction in Turkish sovereign exposure and ongoing credit spread compression in Brazil...
Revenue for Russian LNG Exports Decreases as Shift to Asia Doubles Costs
Russia’s LNG revenue is set to fall as it redirects shipments from Europe to Asia, where logistics costs are at least twice as high. The EU will fully phase out Russian LNG by 2027, prompting Moscow to seek long‑term contracts...
Markets Set to Open Down After Record Week as Iran Negotiations Continue
U.S. equity futures pointed lower on Monday, extending a record‑setting week that ended with the steepest single‑day losses in the S&P 500, Dow and Nasdaq since March. Brent crude hovered near $110 a barrel and WTI above $106, reflecting heightened Iran‑U.S....
Keeping Close Watch on Supply Shock, Impact on Inflation: RBI Guv Sanjay Malhotra
Reserve Bank of India Governor Sanjay Malhotra said the RBI is closely monitoring supply shocks to see if they become entrenched in inflation, while maintaining a neutral stance since June 2025. He highlighted a 200‑basis‑point tolerance band around the 4% inflation...
Is the Economy Ln Better Shape than CFOs Think?
Fifth Third Bank chief economist Jeffrey Korzenik told CFO Brew that, despite headlines of high oil prices and rising inflation, the U.S. economy is more resilient than many CFOs assume. He highlighted that consumer debt relative to disposable income sits...
Japan's Finance Minister Katayama Seeing Speculative Moves in the Financial Markets
Japan’s finance minister Shunichi Katayama warned of speculative activity and oil‑price‑driven forex volatility, urging G7 cooperation on global imbalances and China’s export controls. He signaled readiness to act against USD/JPY swings but declined to confirm any intervention. The pair remains...