Global News Summary 9-15 May 2026

This week was dominated by bond-market stress, inflation persistence and the uneven resilience of global growth. In the US, April CPI rose 0.6% m/m and 3.8% y/y, while core CPI rose 0.4% m/m and 2.8% y/y, keeping the Fed cautious as bond yields climbed and equities sold off late-week. In the UK, March GDP data were better than expected, with GDP up 0.6% over the three months to March, but gilt yields rose sharply, with the 10-year around 5.15%, reflecting fiscal and inflation anxiety. In the Eurozone, Q1 GDP slowed to 0.1% q/q, while March industrial production rose only 0.2% m/m, showing weak but positive momentum. China delivered a strong trade surprise, with April exports up 14.1% y/y and imports up 25.3%, though services weakened as non-manufacturing PMI fell to 49.4. Japan remained a global rates concern, with wholesale inflation hitting a near three-year high and the BoJ still holding policy around 0.75%. Australia stayed under inflation pressure, with wages up 3.3% y/y but real wages squeezed by 4.6% inflation. New Zealand remained fragile, with business confidence at -10.6 and two-year inflation expectations around 2.53%. Singapore remained one of the clearest AI-trade beneficiaries, with Q1 GDP at 4.6% y/y and April NODX later reported up 12.4% y/y. Switzerland saw inflation rise to 0.6%, still low but no longer near zero.

United States

Inflation
April CPI rose 0.6% m/m and 3.8% y/y, the highest annual rate since May 2023. Core CPI rose 0.4% m/m and 2.8% y/y, showing that the inflation problem was not purely energy-related.

Debt securities / policy
Bond markets sold off as inflation anxiety deepened. The 30-year Treasury yield rose to its highest level since 2007, while markets began discussing whether the Fed may eventually need to hike rather than cut if the energy shock persists.

Jobs / growth
The US economy still looked resilient, but household pressure was rising. Mortgage rates eased slightly to 6.36%, but housing demand remained soft, and consumer inflation pressure continued to weigh on sentiment.

AI
AI remained a support for longer-term investment and equity leadership, but this week markets were dominated more by inflation, oil and bond yields than by fresh AI-specific news.

United Kingdom

Economic growth
UK GDP grew 0.6% in the three months to March 2026, compared with the previous three months. Services rose 0.8%, and GDP was 1.0% higher than the same three-month period a year earlier.

Inflation / households
UK inflation was expected to ease toward 3.0% in April from 3.3% in March, partly because of lower regulated household energy bills, but petrol and diesel prices remained a major offsetting pressure.

Debt securities / policy
UK assets came under pressure. The pound fell to a five-week low, and 10-year gilt yields reached around 5.15%, reflecting fiscal credibility concerns, political uncertainty and imported inflation risk.

Recession risk
The GDP data looked better, but bond-market stress and weak household confidence kept the UK in a fragile position. The issue is still not immediate collapse, but low growth with high borrowing costs.

EU / Eurozone

Economic growth
Eurozone Q1 GDP rose 0.1% q/q, slowing from 0.2% in Q4 2025. Year-on-year growth slowed to 0.8%, showing a weak but still positive expansion.

Industrial activity
Industrial production rose 0.2% m/m in March, while EU industrial production rose 0.8%. However, Germany remained weak, with industrial output falling 1.2%, limiting confidence in a broad recovery.

Debt securities / policy
Eurozone bond markets stayed sensitive to energy and inflation risk. The ECB remains caught between weak growth and the possibility that higher energy prices keep inflation above target.

ESG / energy security
The region’s policy focus continued shifting from long-term ESG goals alone toward immediate energy security, logistics resilience and industrial competitiveness.

China

Economic growth / trade
China delivered a strong external-sector surprise. April exports rose 14.1% y/y to a record US$359.4bn, while imports rose 25.3% to about US$274.6bn. The trade surplus widened to roughly US$84.8bn.

Manufacturing / services
Official manufacturing PMI held in expansion at 50.3, but non-manufacturing PMI fell to 49.4, showing renewed weakness in services and domestic demand. The composite PMI eased to around 50.1.

Inflation / policy
The broader picture remained mixed. Strong exports support growth, but weak services and property-related caution mean policy is likely to remain targeted rather than aggressively tight.

Japan

Inflation / policy
Japan’s wholesale inflation rose to its highest level in nearly three years, driven by higher energy and commodity prices linked to the Iran oil shock. The BoJ kept policy around 0.75%, but markets continued to price the risk of a June rate hike.

Debt securities
Japanese bond yields remained globally important. Japan’s 30-year yield rose above 4% during the global bond sell-off, reflecting broader pressure from inflation fears and term-premium repricing.

Growth / recession risk
Japan remains exposed to imported energy costs and yen weakness. The BoJ’s own April outlook warned that higher crude prices are likely to hit corporate profits and household real income.

Australia

Inflation / wages
Australian wages rose 0.8% q/q and 3.3% y/y, but real wages were squeezed because inflation had surged to 4.6%. This means workers are receiving nominal pay increases but losing purchasing power.

Debt securities / policy
The RBA’s May Statement emphasised that the Iran-related energy shock had already lifted inflation. March headline inflation was 4.6%, with higher fuel prices contributing around 0.8 percentage points.

Economic growth / recession risk
Australia’s budget assumptions turned more cautious. Treasury warned that in an extreme oil scenario, inflation could exceed 7%, GDP could contract, and unemployment could rise toward 5%.

New Zealand

Inflation / policy
New Zealand remained in a fragile but not collapsing position. Annual CPI was still around 3.1%, and two-year inflation expectations were around 2.53%, close enough to target to avoid immediate panic but high enough to keep the RBNZ cautious.

Business confidence / growth
Business confidence remained weak at -10.6, after collapsing from +32.5 in March. Firms reported weaker profit expectations, softer hiring intentions and higher cost expectations.

Recession risk
New Zealand’s problem remains weak domestic demand rather than overheating. It is more exposed to confidence and margin pressure than Australia, where the inflation shock is more severe.

Singapore

Economic growth / trade
Singapore remained resilient. Q1 GDP grew 4.6% y/y, supported by manufacturing and trade-related services.

Exports / AI
April NODX was later reported up 12.4% y/y, with electronics exports up 23.5%, highlighting Singapore’s continued link to the AI and semiconductor cycle.

Inflation / policy
MAS had already tightened policy through the exchange-rate channel and raised its inflation forecast range to 1.5%–2.5% because of imported energy risks.

ESG / energy security
Singapore’s policy stance remains pragmatic: maintain currency strength to contain imported inflation, preserve energy resilience, and continue investing in high-value manufacturing and technology.

Switzerland

Inflation / policy
Swiss CPI rose 0.3% m/m in April and 0.6% y/y, up from 0.3% in March. Inflation is still low by global standards, but it is no longer near zero.

Debt securities / currency
The SNB remains at 0%, but higher imported energy costs and safe-haven franc volatility complicate the outlook. Markets now see less room for further easing.

Deflation / recession risk
Switzerland remains the low-inflation outlier, but the deflation narrative has softened. The key issue is the balance between imported energy inflation and a strong franc restraining domestic price pressure.

What this implied for markets

Three themes stood out. First, global bonds became the pressure point, with inflation fears pushing long yields higher in the US, UK and Japan. Second, AI and export strength continued to support parts of the global economy, especially the US, China and Singapore, even as households faced higher fuel costs. Third, global divergence became sharper: the US remained resilient but inflation-sensitive, the UK looked fiscally fragile, the Eurozone slowed, China and Singapore benefited from trade and technology, Australia faced a real-income squeeze, New Zealand weakened through confidence, and Switzerland remained the low-inflation safe-haven outlier.