The Producer Price Index (PPI) increased 1.4% monthly in April 2026, its largest advance since 2022, following increases of 0.7% in March and 0.6% in February. On an annual basis, the index grew 6.0%, its highest level since December 2022. The increase was driven by both services (+1.2%) and goods (+2.0%), with strong growth in energy (+7.8%) and gasoline (+15.6%) standing out. The core index excluding food, energy, and trade advanced 0.6% monthly and 4.4% annually.

Our Take

The sharp PPI rebound confirms a significant acceleration of inflationary pressures in the US economy, driven by energy, transportation, and services. Furthermore, the advance of the core component suggests that pressures are no longer limited solely to energy shocks but are beginning to spread more broadly. In this context, the geopolitical environment and rising production costs increase the risk of a larger pass-through to consumer inflation, reinforcing the need for the Federal Reserve to maintain a cautious monetary stance.

Everything is now set for Donald Trump's visit to China. Several topics will be at the center of the meeting: the evolution of the Middle East conflict, especially due to the energy shock; tariffs under the truce in force since August 2025, when the US cut the fentanyl tariff from 20% to 10% and China suspended its mineral and rare earth export controls for one year; Taiwan; artificial intelligence (AI) and the semiconductor war, given the US tightening of restrictions on advanced chip exports to China.

Our Take

Although no major agreements are expected, this visit could be crucial in defining expectations for the trajectory of relations between the world's two dominant economic and geopolitical powers, not just for the coming quarters, but potentially for years ahead.

According to the International Energy Agency's monthly report (corresponding to April), the war in Iran and the closure of the Strait of Hormuz led to an accumulated supply loss from Gulf producers of more than one billion barrels of oil in March and April, the equivalent of 14 million barrels per day of crude (world production is around 100 million barrels per day).

Our Take

More than ten weeks after the start of the war in the Middle East, the growing supply losses through the Strait of Hormuz are depleting global oil inventories at a record pace. This is an unprecedented supply crisis, one against which the world is finding some relief alternatives: the remaining producing countries are pumping at full capacity and consumers have adjusted demand.

According to the second estimate of the data, released by European statistics agency Eurostat, Eurozone GDP increased 0.1% in Q1 2026 relative to the preceding quarter (+0.2% in Q4 2025). The figure was in line with its first estimate and with what analyst consensus had expected. The pace of expansion was the slowest since that recorded in the second quarter of 2025. On an annual basis, the region's GDP expanded 0.8%.

Our Take

Markets thus absorb weaker growth and higher inflation data that materialize the latent concerns about the effects of the war in Iran, and which will create significant challenges for central banks in their decision-making.

Eurozone industrial production grew +0.2% monthly in March 2026, following a downward revision of the February figure (from +0.4% to +0.2%), and below market expectations, which had anticipated an increase of +0.3%. On an annual basis, industrial activity fell 2.1%, a larger deterioration than analysts had expected, who were forecasting a 1.7% contraction.

Our Take

Today's data confirms that the industrial recovery in the Eurozone is fragile, uneven, and disappointing. After January's setback (-1.5%), the February rebound turned out to be more modest than initial estimates suggested, and March barely adds any ground. Despite significant trade instability, Eurozone industry had shown some resilience throughout 2025, but hopes for a broad-based recovery have been frustrated.

Corporate News

According to Bloomberg reports, Anthropic is in early conversations with investors to raise at least US$30 billion in its largest funding round to date, at a valuation above US$900 billion. The close could occur as soon as the end of May. The company is also considering an IPO as soon as October 2026. The capital will be used to expand its computing infrastructure amid growing demand for Claude, which this week agreed to access an additional 300 megawatts at SpaceX's data centers. Google has committed up to US$40 billion, and Amazon up to US$25 billion more on a gradual basis.

SoftBank reported Q1 2026 earnings of around US$11.6 billion, broadly exceeding consensus estimates, with most of the result explained by valuation gains on its investment in OpenAI. SoftBank has committed to raising its total investment in OpenAI to US$64.6 billion by the end of 2026. Cumulative returns on the OpenAI investment total $45 billion since the initial entry.

Alibaba reported an operating loss of around US$125 million in Q1 2026, its first loss since 2021, with revenues growing 3% year-on-year, below estimates. However, the cloud division was the standout of the report: revenues growing 38% year-on-year. CEO Eddie Wu projected that annualized recurring revenues from AI models and services will surpass US$1.47 billion in the second quarter and US$4.4 billion by year-end.

The to-do list

Today's quote…

"Don't be afraid of the storm; learn to dance in the rain." — Vivian Greene