Global News Summary : 10-16 January 2026
The second full week of 2026 was dominated by inflation persistence, interest-rate discipline, and uneven global momentum. In the United States, inflation remained stable but not weak enough to trigger urgency from the Federal Reserve, keeping long-term yields elevated and reinforcing the message that policy easing will be gradual. Europe showed modest but welcome signs of activity resilience, with production and retail data improving at the margin. China delivered a striking external milestone with a record trade surplus, underlining how much growth still depends on exports rather than domestic demand. In the UK, growth surprised positively, but labour-market fragility continued to temper optimism. Japan remained a focal point for global markets as rising government bond yields reinforced its role as a driver of global funding costs.
United States
Inflation
US inflation held steady. Headline CPI for December remained at 2.7% year-on-year, while core inflation eased slightly to 2.6%, confirming continued disinflation but not yet a clear return to price stability.
Debt Securities
Treasury yields remained elevated, reflecting the market’s reassessment of how quickly policy can ease. By mid-January, the 10-year yield hovered around 4.0%, while the 30-year remained near 4.8%, continuing to act as a valuation constraint for long-duration assets.
United Kingdom
Economic Growth
UK growth data surprised on the upside. Monthly GDP rose by 0.3% in November, reversing the previous month’s decline. Manufacturing and services contributed positively, though construction activity remained weak.
Jobs
Despite the better growth reading, labour-market conditions continued to soften. Unemployment was widely assessed around 5.1%, and the number of payrolled employees had declined since the autumn, keeping concerns about labour-market slack alive.
Eurozone
Economic Growth
Economic activity showed incremental improvement. Industrial production rose by approximately 0.7% month-on-month, while retail sales edged up by around 0.2%, suggesting the economy entered 2026 with modest forward momentum.
Inflation (Pipeline)
Upstream price pressures ticked slightly higher, with producer prices increasing around 0.5% month-on-month, a signal worth monitoring but not yet problematic.
Debt Securities / External Balance
The euro area continued to run a goods trade surplus of roughly €10 billion, supporting growth and helping anchor bond-market confidence.
China
Economic Growth (External Channel)
China reported a record annual trade surplus of nearly US$1.2 trillion for 2025, with exports reaching around US$3.77 trillion and imports about US$2.58 trillion. This highlighted the economy’s continued reliance on external demand.
Export patterns continued to shift, with shipments to the United States falling sharply while exports to regions such as Southeast Asia and Africa increased.
Japan
Debt Securities
Japan remained a key source of global rate sensitivity. Ten-year government bond yields traded around 2.17%, levels not seen in decades, as markets continued to price further policy normalisation.
Australia
Jobs
Australia’s labour market showed signs of cooling. The unemployment rate stood at around 4.3%, with employment falling and underemployment rising, consistent with a gradual slowdown rather than a sharp downturn.
Switzerland
Economic Growth
Swiss authorities revised up their outlook slightly, with 2026 GDP growth now expected around 1.1%, reflecting improved external conditions and reduced trade friction.
Singapore & New Zealand
No major economic releases during the week materially altered the outlook for either economy. Both remained characterised by stable inflation, cautious growth dynamics, and policy continuity.
What This Week Signalled
Interest rates remain the dominant macro force, particularly in the US and Japan
Disinflation is intact, but not fast enough to justify aggressive easing
Europe is improving slowly, without generating strong upside momentum
China’s strength remains export-driven, exposing a domestic-demand gap
Labour markets are cooling, especially in Anglo economies, but without triggering recession signals