Global News Summary 23-29 May 2026
This week was defined by a sharp shift from warflation panic toward partial relief, as hopes of a possible US–Iran deal pushed oil lower and eased some pressure on global bond markets. In the US, April PCE inflation remained high at 3.8% y/y, while Q1 GDP was revised down to 1.6% annualised, showing that growth was still positive but softer than initially reported. In the UK, consumer pressure remained visible: April retail volumes fell 1.3% m/m, although volumes were still up 0.5% over the three months to April compared with the previous three months, and 1.1% higher than the same three-month period a year earlier. In the Eurozone, the focus shifted to renewed inflation pressure, with French inflation rising to 2.8% and markets watching whether the ECB may need to hike again. China remained split between external strength and domestic weakness, while also warning the EU against tougher trade-defence measures. Japan remained a global bond-market pressure point, with the BoJ still guiding rates around 0.75% and the 10-year JGB yield near 2.65%. Australia faced weak consumer momentum and cost pressure, while New Zealand received an updated RBNZ policy statement as inflation and growth risks stayed finely balanced. Singapore stood out again, with Q1 GDP revised up to 6.0% y/y, April CPI at 1.8%, core inflation easing to 1.4%, and total merchandise exports up 31.8% y/y. Switzerland remained the low-inflation safe-haven outlier, with April CPI at 0.6% y/y and policy still anchored near zero.
By country and theme
United States
Inflation / policy
April PCE inflation remained elevated at 3.8% y/y, up from 3.5% in March. That kept the Fed in a difficult position: growth is slowing, but inflation is still too high for a clean easing narrative.
Economic growth
The second estimate of Q1 GDP showed growth of 1.6% annualised, down from the earlier 2.0% advance estimate. That still points to expansion, but it confirms that the economy entered Q2 with less momentum than first thought.
Debt securities / markets
Bond markets were highly sensitive to oil and Iran-war headlines. As hopes of a US–Iran deal increased, Treasury yields fell over the final week of May, with the 10-year ending the month around 4.45% after dropping sharply during the week.
AI
AI remained a major support for equities. Dell surged after reporting a huge increase in AI-server demand, reinforcing the idea that AI infrastructure spending is still a powerful offset to macro uncertainty.
United Kingdom
Economic growth / consumption
April retail sales volumes fell 1.3% m/m, reversing the March rise, although volumes were still up 0.5% over the three months to April compared with the previous three months, and 1.1% higher than the same three-month period a year earlier. This points to household caution rather than outright collapse.
Inflation / households
Consumer pressure remained evident. Shop price inflation rose to 1.2% in May, and economists expected energy-related pressures to lift inflation again later in the year, even after April CPI fell to 2.8%.
Jobs / wages
The labour-market backdrop continued to soften. Wage growth slowed from 5.5% to 3.4%, and real wages fell 0.2% y/y in March, reinforcing the squeeze on household purchasing power.
Debt securities / policy
The Bank of England was expected to keep rates at 3.75% through the summer, with Governor Andrew Bailey signalling tolerance for temporarily high inflation in order to protect activity amid conflict-related uncertainty.
EU / Eurozone
Inflation
Inflation risks re-intensified in parts of the Eurozone. French harmonised inflation rose to 2.8% y/y in May from 2.5% in April, driven by energy inflation of 16.8%.
Economic growth / recession risk
France’s economy contracted 0.1% q/q in Q1, and surveys pointed to possible further weakness in Q2. That raised the risk of a technical recession in one of the bloc’s largest economies.
Debt securities / policy
Eurozone bond markets were pulled between weaker growth and renewed inflation risk. Markets increasingly watched whether the ECB might be forced to consider a rate hike if energy inflation persists.
ESG / energy security
The EU’s policy debate continued shifting from pure green-transition language toward industrial protection, energy security and trade defence. China warned the EU against tougher measures aimed at subsidised imports, particularly in strategic sectors such as clean technology and EVs.
China
Economic growth / trade
China remained split between strong external demand and weaker domestic momentum. Earlier April trade strength remained supportive, but recent commentary pointed to weaker retail sales, softer private investment and property-related drag.
Manufacturing / services
The prior PMI picture still mattered: manufacturing remained more resilient, while domestic services and consumption stayed weaker. The key China story remained uneven recovery rather than broad reflation.
Policy / trade tensions
Trade tensions with Europe increased as China threatened to launch investigations if the EU advanced new trade-defence measures against subsidised foreign imports. This added another risk layer for China’s export-led support story.
Japan
Debt securities / policy
Japan remained a central global rates story. The BoJ continued guiding the uncollateralised overnight call rate around 0.75%, with the basic loan rate at 1.0%.
Bond market
The 10-year JGB yield eased to around 2.65% on 29 May, while earlier in the month the 10-year had reached around 2.8% and the 30-year around 4.15%. These are still historically elevated levels for Japan and remain important for global duration markets.
Inflation / growth
Tokyo inflation stayed below the BoJ’s 2% target for a fourth month, helped by subsidies for fuel, utilities and education, even as global energy costs remained elevated.
Australia
Inflation / households
Australian retailers faced a difficult mix of rising input costs and weak demand. Retail turnover growth was forecast to slow to 1.8% in 2026 from 2.3% in 2025, while discretionary spending growth was expected to slow to 0.7%.
Costs / real wages
Input costs were estimated to have risen directly by 2.1% due to fuel, energy, plastics and fertiliser pressures. Real wages fell 1.3% to March, continuing the squeeze on households.
Debt securities / policy
The RBA’s May policy statement continued to stress that inflation risks were tilted to the upside and that capacity pressures remained elevated.
New Zealand
Inflation / policy
The RBNZ released its May Monetary Policy Statement during the week, keeping attention on the balance between elevated inflation risks and weakening activity.
Economic growth / confidence
The broader New Zealand picture remained fragile: domestic demand was weak, confidence had deteriorated, and inflation risks were still not fully resolved.
Recession risk
New Zealand continued to look more demand-constrained than Australia. Its risk is not overheating, but weak activity meeting imported cost pressure.
Singapore
Economic growth / trade
Singapore remained one of the strongest economies in the weekly set. MTI kept the 2026 growth forecast at 2%–4%, while Q1 GDP was revised to 6.0% y/y, up from the earlier advance estimate and stronger than the previous quarter’s 5.7%.
Inflation
April headline CPI stayed at 1.8% y/y, unchanged from March, while core inflation eased to 1.4%. CPI fell 0.3% m/m in April.
Trade / AI
Total merchandise exports rose 31.8% y/y in April, reinforcing Singapore’s role as a key beneficiary of electronics, AI-linked hardware demand and regional trade resilience.
Energy security / policy
MTI warned that downside risks had risen significantly because of the Middle East conflict, even while maintaining the growth forecast. That keeps Singapore in a strong but externally exposed position.
Switzerland
Inflation / policy
Switzerland remained a low-inflation outlier. April CPI was 0.6% y/y, up from 0.3% in March, with the CPI index rising to 101.10.
Debt securities / currency
The Swiss franc continued to act as a safe haven. The SNB remained near 0%, and the main policy concern was still currency strength and external demand rather than domestic overheating.
Recession / deflation risk
The deflation narrative softened as inflation rose, but Switzerland remained far below the inflation levels seen in the US, UK and Eurozone.
What this implied for markets
Three themes stood out.
First, the Iran-war transmission channel began to shift from pure inflation panic toward relief hopes, as oil fell on expectations of a possible US–Iran deal.
Second, bond markets remained the central pressure point, but falling oil helped yields ease late in the week.
Third, global divergence stayed wide: the US remained inflation-sensitive but AI-supported, the UK stayed household- and gilt-sensitive, Europe faced renewed inflation and growth risk, China remained export-supported but domestically uneven, Japan stayed central to global duration, Australia and New Zealand remained squeezed by costs and confidence, Singapore continued to outperform, and Switzerland remained the low-inflation safe-haven outlier.