Weekly Outlook
What Happened This Week?
Global
- Escalating tensions in the Middle East continued to pressure the global economy, lifting inflation risks and forcing economists to lower growth expectations.
- The United Nations cut its 2026 global growth forecast to 2.5% from 2.7%, while raising its global inflation estimate to 3.9% from 3.1%.
- Rising energy prices are increasingly being seen as a major supply shock for global markets, with concerns growing over second-round inflation effects.
- The U.N. warned that the conflict threatens to drive another 45 million people into acute food insecurity, pushing the global total to 363 million.
- Global business activity remained uneven in May, with the U.S. showing resilience while Europe and Asia slowed sharply.
United States
- U.S. business activity remained relatively solid in May despite growing geopolitical uncertainty and rising oil prices.
- Federal Reserve officials increasingly shifted discussions toward the possibility of rate hikes rather than cuts as inflation risks intensified.
- Richmond Fed President Thomas Barkin said supply-driven inflation shocks are difficult for monetary policy to address, though persistent pressures may still require a response.
- Fed policymakers expressed concern that inflation remaining above target for years could destabilize long-term inflation expectations.
- The Philadelphia Fed manufacturing index fell sharply to -0.4 in May from 26.7 previously, signaling renewed contraction in factory activity.
- New orders and shipments weakened significantly, although business optimism for future activity improved.
- U.S. jobless claims declined to 209,000, pointing to continued labor market resilience.
- Mortgage rates climbed to 6.51%, the highest level since August, slowing housing demand during the spring buying season.
- High borrowing costs and elevated home prices continued to keep many buyers on the sidelines.
- Pending home sales rose 1.4% in April, beating expectations, with gains across most regions except the Northeast.
- National Association of Realtors Chief Economist Lawrence Yun said housing demand remains supported by buyer optimism despite economic uncertainty.
- Incoming Federal Reserve Chair Kevin Warsh is set to take office Friday, inheriting an environment marked by stubborn inflation and policy divisions within the Fed.
- Warsh is expected to push for changes in inflation measurement, a smaller Fed balance sheet, and a less interventionist central bank approach.
- President Donald Trump will host an unusual White House swearing-in ceremony for Warsh, reviving a tradition last seen during Alan Greenspan’s appointment in 1987.
Eurozone
- Economic momentum weakened further across the euro area, with the eurozone PMI falling to 47.5, signaling contraction.
- Slowing activity and persistent inflation reinforced concerns about stagflation risks across the region.
- Businesses across Europe faced mounting pressure from rising energy costs linked to the Middle East conflict.
United Kingdom
- U.K. inflation cooled more than expected in April, with annual consumer prices rising 2.8%, down from 3.3% previously.
- The decline was largely driven by government measures that reduced household energy costs.
- Inflation is nevertheless expected to accelerate again as oil and gas prices rise.
- Bank of England policymaker Alan Taylor said the current 3.75% interest rate is restrictive enough to contain inflation without immediate additional hikes.
- Taylor warned rates may still need to rise if oil prices remain near $130 per barrel for an extended period.
- U.K. unemployment increased to 5.0% in the three months through March, while wage growth slowed and payrolls dropped by 100,000 in April.
- A BDO survey showed 30% of midsize British companies are considering hiring freezes due to higher energy costs linked to the Iran conflict.
Japan
- Japan’s exports surged 14.8% year-over-year in April, exceeding forecasts thanks to strong global demand and yen weakness.
- Petroleum imports from the Middle East plunged 67.2%, while imports from the United States jumped 38.8% as Japan diversified energy supplies.
- Economists expect export momentum to weaken in coming months as higher oil prices weigh on the economy.
- Bank of Japan officials increasingly warned that rising crude prices could push inflation above target.
- BOJ policymaker Junko Koeda said underlying inflation is already near 2% and energy prices may remain elevated.
- Markets increasingly expect the BOJ to consider further interest-rate increases despite concerns about slowing corporate activity.
- Japan’s government bond market showed signs of stress as rising yields reflected investor concerns about fiscal sustainability.
- Prime Minister Sanae Takaichi’s plans for additional fiscal spending revived concerns over Japan’s public finances.
Switzerland
- Switzerland’s economy expanded 0.5% in the first quarter after 0.2% growth in late 2025.
- The recovery remains fragile as rising energy prices threaten investment activity.
- The KOF Swiss Economic Institute warned that the watchmaking, machinery, and electronics sectors are particularly exposed to weaker global demand and higher costs.
- KOF forecasts Swiss GDP growth at 1.0% for 2026 and 1.7% for 2027 under its baseline scenario.
Canada
- Canadian inflation accelerated to 2.8% in April, reaching its highest level since May 2024.
- Energy prices surged 19.2% year-over-year, becoming the main driver of headline inflation.
- Core inflation measures monitored by the Bank of Canada slowed to an average of 2.05%, the weakest pace since early 2021.
- Travel-related prices declined sharply, partially offsetting broader inflation pressures.
Mexico
- Moody's downgraded Mexico’s sovereign credit rating to Baa3 from Baa2 while revising the outlook to stable.
- The downgrade reflected weakening fiscal conditions and continued financial support for state-owned oil producer Petróleos Mexicanos.
- Moody’s expects Mexico’s economic growth to remain subdued in the near term despite relative macroeconomic stability.
Indonesia
- Bank Indonesia raised its benchmark rate by 50 basis points to 5.25%, the first hike since April 2024.
- Governor Perry Warjiyo said the move was designed to stabilize the rupiah amid heightened geopolitical tensions and inflation risks.
This Week’s Market Movers
Forex
EUR/USD:
YTD: -1.12%
Weekly: -0.04%
USD/JPY:
YTD: +1.52%
Weekly: +0.28%
GBP/USD:
YTD: -0.20%
Weekly: +0.82%
AUD/USD:
YTD: +7.16%
Weekly: -0.04%
USD/CAD:
YTD: +0.58%
Weekly: +0.33%
EUR/CHF:
YTD: -1.87%
Weekly: +0.01%
- The GBP/AUD and USD/RON are up more than 1.3%.
- The USD/JPY and USD/CAD are up more than 0.5%.
- The EUR/RUB is down more than 3%.
- The AUD/USD is down more than 1%.
- The USD/RUB is down more than 2.5%.
Commodities
Gold:
YTD: +4.93%
Weekly: -2.63%
Brent:
YTD: +70.79%
Weekly: -2.48%
WTI:
YTD: +69.12%
Weekly: -4.81%
Copper:
YTD: +11.97%
Weekly: -3.08%
- Aluminium prices are up more than 2%.
- US Soybeans, Orange Juice and Natural Gas prices are up more than 1%.
- WTI prices are down more than 7%.
- US Cocoa prices are down more than 6%.
- US Coffee prices are down more than 4%.
Indices
Dax40:
YTD: +0.44%
Weekly: +1.56%
S&P 500:
YTD: +8.25%
Weekly: +0.01%
NASDAQ:
YTD: +11.97%
Weekly: +0.02%
DOW JONES:
YTD: +4.53%
Weekly: +0.71%
FTSE 100:
YTD: +5.16%
Weekly: +0.66%
BOVESPA:
YTD: +10.26%
Weekly: -0.39%
- The Stoxx 50 and UK 100 index are up more than 1%.
- The Bist 100 index is down more than 9%.
- The VIX index is down more than 6%.
Shares
Tops
- ARM: +36.90%
- DexCom: +21.82%
- IG Group: +21.66%
- International Business Machines: +17.36%
- Fair Isaac: +15.96%
- CrowStrike: +15.82%
- ServiceNow: +14.17%
- EPAM Systems: +13.31%
- Brava Energia: +11.70%
SAP: +10.23%
Flops
- Intuit: -17.38%
- Albemarie: -14.19%
- Vertiv Holdings: -12.65%
- Fresnillo: -12.04%
- Analog Devices: -10.85%
- Scout24: -10.63%
- Endeavour Mining: -10.57%
Important Events to Follow
Wednesday 27 May
- 01:30 AM - Australian - Inflation Rate YoY (April)
- Previous: 4.6%
- Forecast: 5.1%
- 02:00 AM - New Zealander - RBNZ Interest Rate Decision (April)
- Previous: 2.25%
- Forecast: 2.25%
Thursday 28 May
- 12:30 PM - American - Core PCE Price Index MoM (April)
- Previous: 0.3%
- Forecast: 0.3%
- 12:30 PM - American - Durable Goods Orders MoM (April)
- Previous: 0.8%
- Forecast: 0.4%
- 12:30 PM - American - GDP Growth Rate QoQ 2nd Est (Q1)
- Previous: 0.5%
- Forecast: 2.0%
- 12:30 PM - American - Personal Income MoM (April)
- Previous: 0.6%
- Forecast: 0.5%
- 12:30 PM - American - Personal Spending MoM (April)
- Previous: 0.9%
- Forecast: 0.6%
Friday 29 May
- 05:00 AM - Japanese - Consumer Confidence (May)
- Previous: 32.2
- Forecast: 31.5
- 06:45 AM - French - Inflation Rate YoY Prel (May)
- Previous: 2.2%
- Forecast: 2.6%
- 12:00 PM - German - Inflation Rate YoY Prel (May)
- Previous: 2.9%
- Forecast: 3.1%
- 12:30 PM - Canadian - GDP Growth Rate Annualized (Q1)
- Previous: -0.6%
- Forecast: 0.7%
- 12:30 PM - Canadian - GDP Growth Rate QoQ (Q1)
- Previous: -0.2%
- Forecast: 0.1%
Major Earnings Reports to Watch
Wednesday 27 May
- Salesforce
Thursday 28 May
- Photronics
- Weibo Corporation
- Dell
- Dollar Tree
- Best Buy
- Costco
Source: The Wall Street Journal, Investing, Trading Economics, Reuters, TradingView and ActivTrades’ Data as of May 22, 2026
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