Global News Summary 30 May - 5 June 2026
This week was dominated by a renewed rates shock after stronger US jobs data, even as the Iran-war oil shock showed signs of partial relief. In the US, May payrolls rose 172,000, well above expectations, unemployment stayed at 4.3%, and wage growth remained around 3.4% y/y, pushing Treasury yields higher and reviving rate-hike risk rather than rate-cut hopes. In the UK, housing remained under pressure, with Halifax reporting house prices down 0.1% m/m in May and only 0.5% y/y, while business price expectations rose to 4.0%, showing that inflation anxiety had not disappeared. In the Eurozone, May inflation rose to 3.2%, while revised Q1 data showed the bloc contracting 0.2% q/q, distorted heavily by Ireland’s sharp GDP fall. China improved at the margin, with non-manufacturing PMI back above 50 at 50.1, although manufacturing remained soft around 50.0. Japan remained central to global duration risk, with the BoJ still guiding rates around 0.75% and the 10-year JGB yield near 2.67%. Australia faced a wage-policy shock, with the minimum wage rising 4.75% and the lowest-paid workers receiving 6%, while New Zealand remained caught between weak growth and inflation risk. Singapore continued to benefit from AI-linked electronics demand, with PMI rising to 51.0 and electronics PMI to 51.9, while Switzerland remained the low-inflation safe haven, with CPI around 0.6% and rates near zero.
United States
Jobs / growth
The US labour market surprised strongly to the upside. May payrolls rose 172,000, far above forecasts of around 80,000 to 85,000, while unemployment stayed at 4.3%. Job gains were led by leisure and hospitality, local government, and healthcare, while financial activities weakened. Prior months were also revised higher, adding further evidence that the labour market was more resilient than feared.
Inflation / policy
The strong jobs report made it harder for the Fed to justify rate cuts. Inflation was still around 3.8%, while wage growth was around 3.4% y/y, meaning inflation remained above wage growth and still well above target. Markets increasingly discussed whether the Fed may need to hike later in 2026 rather than cut.
Debt securities
Treasury yields rose sharply after the jobs data. The 2-year Treasury yield rose to 4.160%, its highest level since February 2025, while the 10-year yield rose to 4.537%. The move reflected a clear repricing toward higher-for-longer rates and possible Fed tightening risk.
AI / markets
US equities sold off despite strong employment data, with tech and AI-linked stocks under pressure. The Nasdaq fell sharply as investors questioned whether higher yields would hurt long-duration growth stocks, even while AI remained a structural support for investment.
United Kingdom
Housing / household demand
The UK housing market remained weak. Halifax reported that average house prices fell 0.1% m/m in May, the third consecutive monthly decline, with the average home price at £298,806 and annual growth only 0.5%. Higher mortgage costs and uncertainty linked to the Middle East conflict continued to weigh on affordability.
Inflation / business pricing
Business inflation expectations worsened. A Bank of England survey showed firms expected to raise prices by 4.0% over the next year, up from 3.8% in April, while expected wage growth slowed to 3.4%. This points to cost pressure remaining high, but pricing power becoming more uneven.
Economic growth / consumption
Retail conditions improved slightly in May as warm weather helped high-street activity, but the recovery remained fragile. One survey showed high-street sales up 3.4% y/y, while broader footfall still fell 2.6% y/y, indicating that consumer activity remained uneven rather than strong.
Debt securities / policy
The UK remained sensitive to imported inflation and fiscal credibility concerns. Inflation had fallen to 2.8% in April, but expected energy-price increases later in the year continued to keep gilt and mortgage markets cautious.
EU / Eurozone
Inflation
Eurozone inflation rose again. The flash estimate for May showed annual inflation at 3.2%, up from 3.0% in April, keeping inflation above the ECB’s 2% target for a third consecutive month.
Economic growth / recession risk
The Eurozone growth picture worsened because of revisions. Q1 GDP was revised to a 0.2% contraction, mainly due to a sharp 12.1% fall in Ireland’s GDP, linked to volatility in multinational activity. Excluding Ireland, the bloc looked more stable, but the headline number increased recession concerns.
Debt securities / policy
The ECB moved closer to a possible tightening discussion. With inflation rising and growth weakening, markets increasingly expected the ECB to raise rates at its June meeting, even though the growth backdrop remained fragile.
ESG / energy security
Europe’s focus remained practical rather than ideological: energy security, fuel availability, transport resilience and industrial competitiveness. EU officials said there was no immediate jet-fuel shortage, but high prices and route disruptions continued to matter for airlines and logistics.
China
Manufacturing / services
China’s May PMI picture improved modestly but remained uneven. Official manufacturing PMI eased to around 50.0, signalling stagnation rather than a strong expansion, while non-manufacturing PMI rose to 50.1 from 49.4, returning services and construction to marginal expansion.
Economic growth / domestic demand
China’s recovery remained split. Private-sector activity looked stronger, with the RatingDog composite PMI rising to 54.0, its highest since February, but weak domestic demand, overcapacity and property pressure continued to weigh on confidence.
Inflation / policy
Inflation remained relatively subdued compared with the US and Europe. Policy remained supportive but targeted, with authorities still balancing export strength, domestic weakness and property-sector risk.
Trade tensions
Trade tensions with Europe continued to matter, especially around clean technology, EVs and industrial subsidies. This added risk to China’s export-led resilience.
Japan
Debt securities / policy
Japan remained one of the most important global bond-market pressure points. The Bank of Japan continued guiding the uncollateralised overnight call rate around 0.75%, while the basic loan rate remained 1.0%.
Bond market
The 10-year JGB yield held around 2.67% on 5 June, 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.
Jobs / wages / inflation
Japan’s real wages rose 1.9% y/y in April, marking a fourth straight month of growth and supporting the case for further BoJ tightening later in 2026.
Economic growth
Growth remained fragile because higher imported energy costs continued to pressure households and companies, even as wage momentum improved.
Australia
Wages / households
Australia delivered a major wage-policy development. Around 2.7 million award workers will receive a 4.75% pay rise, while around 100,000 of the lowest-paid workers will receive a 6% increase. The national minimum wage rises from A$24.95 to A$26.44 per hour, or almost A$1,005 per week for a 38-hour week.
Inflation / policy
The wage increase helps real incomes but may complicate the RBA’s inflation fight. Inflation was still around 4.2% to 4.6%, and business groups warned that higher labour costs could add to price pressure.
Economic growth
Australia’s Q1 GDP growth slowed to 0.3% q/q, down from 0.9% in the prior quarter and below expectations. Net exports were a drag, while data-centre investment stood out as a bright spot.
Debt securities / recession risk
The RBA remained hawkish because inflation risks were still tilted upward, but weaker growth increased the risk of a policy mistake.
New Zealand
Inflation / policy
New Zealand remained finely balanced between inflation risk and weak growth. The RBNZ’s May Monetary Policy Statement continued to frame the outlook around elevated inflation risks, weaker near-term activity and uncertainty linked to the Middle East conflict.
Economic growth / confidence
Domestic demand remained fragile, and confidence indicators continued to suggest that firms were cautious on margins, hiring and investment. The economy remained more demand-constrained than inflation-overheated.
Debt securities / recession risk
The RBNZ stayed cautious. The key issue is not strong growth, but whether imported energy inflation and weaker demand combine into a stagflation-style squeeze.
Singapore
Economic growth / trade
Singapore remained one of the clearest outperformers. Official indicators still showed Q1 GDP growth of 6.0% y/y, April total merchandise exports up 31.8% y/y, and CPI at 1.8%.
Manufacturing / AI
The manufacturing cycle strengthened. Singapore’s manufacturing PMI rose to 51.0 in May from 50.7, the highest reading since December 2024, while electronics PMI rose to 51.9 from 51.7, supported by new orders, exports, output and employment.
Inflation / policy
Inflation remained comparatively contained, but import and export price pressures were visible. Manufactured products and domestic supply price indices rose in April, reflecting energy and trade-cost pass-through.
ESG / energy security
Singapore’s policy mix remained pragmatic: preserve energy resilience, support high-value manufacturing, maintain exchange-rate discipline, and continue positioning around AI-linked electronics demand.
Switzerland
Inflation / policy
Switzerland remained the low-inflation safe-haven outlier. CPI was around 0.6%, still far below the US, UK and Eurozone, while the SNB policy rate remained at 0%.
Debt securities / currency
The Swiss franc continued to act as a safe-haven currency, and the 10-year Swiss yield was around 0.42%, far below yields in the US, UK and Japan.
Economic growth / recession risk
Switzerland’s growth outlook remained subdued but stable. Official forecasts still pointed to below-average 2026 growth around 1.0%, with the Middle East conflict raising energy-price and uncertainty risks.
Deflation risk
The deflation narrative has softened as inflation rose from near zero, but Switzerland remains the cleanest low-inflation developed-market economy.
What this implied for markets
Three themes stood out.
First, the US jobs surprise changed the global rates tone. Instead of relief from falling oil, markets had to confront the possibility that the Fed may stay tighter for longer, or even hike again if inflation remains stubborn.
Second, global bond markets remained the key pressure point. US Treasuries, gilts, Eurozone bonds and JGBs all remained sensitive to the same combination: inflation, energy prices, fiscal credibility and central-bank caution.
Third, global divergence remained wide: the US looked resilient but inflation-sensitive, the UK stayed household- and housing-sensitive, Europe faced rising inflation with weak growth, China improved at the margin but remained domestically uneven, Japan stayed central to global duration, Australia faced wage and inflation pressure, New Zealand remained fragile, Singapore continued to outperform through AI-linked manufacturing, and Switzerland remained the low-inflation safe-haven outlier.