Global Economy & Markets, Weekly Roundup 12/05/26
Investors focus on US–China leaders’ meeting for potential progress on key issues, including trade relations and Iran
Global equity markets climbed to fresh record highs on the back of broad based very robust corporate results for Q1:2026. Investors also appeared to take a constructive view on the prospect of an easing of the acute energy supply disruptions in the Middle East, albeit respective optimism posted signs of partly fading in the past days.
Considering media reports, a common ground between the US and Iran for an end to their conflict which could lead to a restoration of naval trade flows through the Strait of Hormuz, still appears distant. At the same time, some on-field military tensions have re-emerged, while the conflict in Lebanon shows signs of heating up.
Respective brinkmanship had led to seesawing prices of major energy commodities, with Brent crude oil (July 2026 futures contract) oscillating between $100 and $115 per barrel. That development fed through to higher government bond yields in the current week. Meanwhile, a substantial rise has taken place for UK Gilt yields, in view of renewed political uncertainty, to the highest level since July 2008 (10-Year: 5.10%).
Attention now also turns to the official visit in China of US President Trump, commencing on Wednesday May 13th. Talks with China’s President Xi Jinping will likely include a wide array of issues, including trade, AI, and broader economic relations between the two countries, the situation in Iran and matters related to Taiwan.
Recall that after the Supreme Court of the US stroke down in late February 2026, the “Reciprocal Tariffs and the Trafficking and Immigration Tariffs”, which President Trump had imposed in 2025 invoking the International Emergency Economic Powers Act (IEEPA), the (unfavorable) discrepancy in the treatment of goods imports from China against other trading partners moderately narrowed.
Meanwhile, US economic data have remained resilient entering Q2:2026. Specifically, headline job creation (non-farm payrolls) was up by +115k in April, exceeding consensus estimates for +65k. Stripping out the particular volatility witnessed in recent months, the 6-month average came out at +55k in April, having improved from a trough of +6k in February 2026.
At the same time, the unemployment rate held steady at 4.3% in April, c. at the mid-point of the range of 4.0% to 4.5% it has hovered in since June 2024. Having said that, the U-6 unemployment rate (which includes the unemployed, part-time workers for economic reasons and those marginally attached to the labor force), which is considered a broader measure of slack, rose by +0.2 pps mom to 8.2% in April.
On US inflation, the annual growth of CPI accelerated substantially anew in April, to +3.8% from +3.3% in March and +2.4% in February prior to the spike in Energy prices (+17.9% yoy in April from +0.5% yoy in February). The respective pace of the core CPI accelerated by +0.2 pps to 2.8%, albeit due to the dominant shelter component (+0.3 pps mom to +3.3% yoy), as the pass-through of energy costs to the rest components of the core CPI usually takes place with a significant lag. Both the headline and the core somewhat exceeded consensus for 3.7% & 2.7%, respectively.
Global equity markets climbed to fresh record highs on the back of broad based very robust corporate results for Q1:2026. Investors also appeared to take a constructive view on the prospect of an easing of the acute energy supply disruptions in the Middle East, albeit respective optimism posted signs of partly fading in the past days.
Considering media reports, a common ground between the US and Iran for an end to their conflict which could lead to a restoration of naval trade flows through the Strait of Hormuz, still appears distant. At the same time, some on-field military tensions have re-emerged, while the conflict in Lebanon shows signs of heating up.
Respective brinkmanship had led to seesawing prices of major energy commodities, with Brent crude oil (July 2026 futures contract) oscillating between $100 and $115 per barrel. That development fed through to higher government bond yields in the current week. Meanwhile, a substantial rise has taken place for UK Gilt yields, in view of renewed political uncertainty, to the highest level since July 2008 (10-Year: 5.10%).
Attention now also turns to the official visit in China of US President Trump, commencing on Wednesday May 13th. Talks with China’s President Xi Jinping will likely include a wide array of issues, including trade, AI, and broader economic relations between the two countries, the situation in Iran and matters related to Taiwan.
Recall that after the Supreme Court of the US stroke down in late February 2026, the “Reciprocal Tariffs and the Trafficking and Immigration Tariffs”, which President Trump had imposed in 2025 invoking the International Emergency Economic Powers Act (IEEPA), the (unfavorable) discrepancy in the treatment of goods imports from China against other trading partners moderately narrowed.
Meanwhile, US economic data have remained resilient entering Q2:2026. Specifically, headline job creation (non-farm payrolls) was up by +115k in April, exceeding consensus estimates for +65k. Stripping out the particular volatility witnessed in recent months, the 6-month average came out at +55k in April, having improved from a trough of +6k in February 2026.
At the same time, the unemployment rate held steady at 4.3% in April, c. at the mid-point of the range of 4.0% to 4.5% it has hovered in since June 2024. Having said that, the U-6 unemployment rate (which includes the unemployed, part-time workers for economic reasons and those marginally attached to the labor force), which is considered a broader measure of slack, rose by +0.2 pps mom to 8.2% in April.
On US inflation, the annual growth of CPI accelerated substantially anew in April, to +3.8% from +3.3% in March and +2.4% in February prior to the spike in Energy prices (+17.9% yoy in April from +0.5% yoy in February). The respective pace of the core CPI accelerated by +0.2 pps to 2.8%, albeit due to the dominant shelter component (+0.3 pps mom to +3.3% yoy), as the pass-through of energy costs to the rest components of the core CPI usually takes place with a significant lag. Both the headline and the core somewhat exceeded consensus for 3.7% & 2.7%, respectively.