Global News Summary: 25 April–1 May 2026

This week was defined by central banks holding steady while energy-driven inflation pressures intensified, even as equity markets remained supported by strong AI-led earnings. In the US, the Fed held rates at 3.50%–3.75% in an 8–4 split decision, while March PCE inflation rose to 3.5% y/y and Q1 GDP came in around 2.0% annualised, supported by business investment but with softer underlying consumer demand. In the UK, the Bank of England held at 3.75% by an 8–1 vote, warning that inflation could rise further if oil remains elevated. In the Eurozone, the ECB held rates as April inflation rose to 3.0% and growth slowed to 0.1% q/q, reinforcing stagflation concerns. China showed a split recovery, with manufacturing PMI at 50.3 but services slipping into contraction at 49.4. Japan delivered a “hawkish hold,” keeping rates at 0.75% while sharply raising its inflation forecast and cutting growth expectations. Australia faced a renewed inflation surge to 4.6%, while New Zealand saw a sharp collapse in business confidence despite CPI holding at 3.1% and the OCR at 2.25%. Singapore remained resilient with inflation around 1.7–1.8% and strong industrial activity, while Switzerland stayed the low-inflation outlier at 0.3% CPI, keeping deflation risk in focus.

United States

Inflation / policy
The Federal Reserve held its policy rate at 3.50%–3.75% in an 8–4 vote, marking the highest number of dissents in decades. March PCE inflation rose 0.7% m/m and 3.5% y/y, with core PCE at 3.2% y/y, reinforcing a cautious stance as inflation remains above target.

Economic growth / AI
Q1 GDP grew around 2.0% annualised, supported by business investment, particularly in AI infrastructure. However, underlying consumer demand was softer, with real spending growth modest and increasingly affected by higher prices.

Jobs / recession
Initial jobless claims fell to around 189,000, one of the lowest readings in decades, signalling continued labour-market resilience. The economy remains slowing but still expanding.

Debt securities
The 10-year Treasury yield moved toward 4.4%, reflecting reduced expectations of near-term rate cuts and persistent inflation concerns.

United Kingdom

Debt securities / policy
The Bank of England held Bank Rate at 3.75%, with an 8–1 vote, highlighting internal concern about inflation persistence.

Inflation / recession
Inflation remained elevated at 3.3%, with warnings that sustained high oil prices could push inflation significantly higher over the coming year.

Economic growth / households
Growth remained fragile, with forecasts around 0.4% for 2026. Household demand stayed weak as higher energy costs weighed on real incomes.

Debt markets
The 10-year gilt yield traded around 5.0%, near multi-year highs, reflecting inflation risk and expectations that rates may stay elevated.

EU (Eurozone)

Inflation
April inflation rose to 3.0%, driven mainly by energy, reversing earlier disinflation progress.

Economic growth
Q1 GDP slowed to 0.1% q/q, with year-on-year growth around 0.8%, highlighting weak underlying momentum.

Debt securities / policy
The ECB held its deposit rate at 2.0%, maintaining flexibility as it balances inflation pressures with weak growth.

Energy / structural risk
Policy focus continued shifting toward energy security and resilience, reflecting the impact of external shocks on inflation and growth.

China

Economic growth
Manufacturing PMI held at 50.3, remaining in expansion, while the private-sector PMI rose to 52.2, indicating stronger activity in export-oriented sectors.

Services / domestic demand
Non-manufacturing PMI fell to 49.4, entering contraction, highlighting weakness in domestic demand. The composite PMI edged down to around 50.1, signalling a fragile recovery.

Policy / inflation
China maintained a steady policy stance, balancing rising input costs with weak consumption and ongoing property-sector challenges.

Japan

Debt securities / policy
The Bank of Japan held its policy rate at 0.75% in a 6–3 vote, with three members calling for a hike to 1.0%, reflecting increasing internal pressure to tighten.

Inflation / forecasts
The BoJ delivered a hawkish shift, raising its FY2026 core CPI forecast to 2.8% from 1.9%, while cutting its growth forecast to 0.5% from 1.0%.

Economic sensitivity
Japan remains highly exposed to imported energy costs, making the policy outlook increasingly sensitive to global developments.

Australia

Inflation / policy
Inflation surged to 4.6% y/y in March, driven largely by fuel and transport costs.

Debt securities / RBA
With the policy rate at 4.1%, markets increasingly expect further tightening if inflation pressures persist.

Economic growth / risk
Australia faces rising stagflation risk, as higher costs begin to weigh on consumption and growth.

New Zealand

Inflation / policy
Annual CPI held at 3.1% in the March quarter, with upward risks from energy costs. The RBNZ maintained the OCR at 2.25%.

Economic growth / business confidence
Business confidence dropped sharply to -10.6, with activity expectations weakening significantly and firms reporting falling profitability.

Recession risk
The economy appears increasingly vulnerable, with weakening demand and rising cost pressures.

Singapore

Inflation / policy
Core inflation remained around 1.7%, with headline inflation at 1.8%. MAS tightened policy earlier in April and raised its inflation forecast to 1.5%–2.5%.

Economic growth / trade
Manufacturing output rose 4.7% m/m, supported by electronics and AI-related demand. Investment flows remained strong.

AI / energy risk
The AI cycle continues to support growth, though policymakers flagged energy and transport costs as rising risks.

Switzerland

Inflation / policy
Inflation remained very low at 0.3% y/y, with core inflation around 0.4%, keeping Switzerland in a low-inflation regime.

Debt securities / currency
Policy rates remained near 0%, with the central bank maintaining flexibility and readiness to manage currency strength.

Recession / deflation risk
Switzerland continues to face deflationary pressure, driven by a strong currency and subdued domestic inflation.

What this implied for markets

Three key themes stood out. First, the Iran war has shifted central banks into a holding pattern, delaying easing and raising the risk of further tightening in some regions. Second, AI-driven investment continues to support equities, particularly in the US and parts of Asia, even as inflation pressures build. Third, the global economy is becoming more fragmented: the US is growing with inflation, Europe and the UK face stagflation risk, China shows uneven recovery, Singapore remains resilient, Australia faces a sharp inflation shock, New Zealand is weakening through confidence, and Switzerland remains the clearest low-inflation outlier.