Latest Finance-Economy News
Investors Focus on Upcoming US Inflation Data and Fed Policy Path
Global investors are awaiting new US consumer price index data that will clarify whether inflationâs recent decline toward 2.7% headline and 2.6% core in November is durable, after prior readings were distorted by a government shutdown. Federal Reserve policymakers remain split between easing to support a cooling labor market and staying cautious over sticky inflation, with futures markets not broadly pricing in the next rate cut until around midâyear.
The data will heavily influence expectations for the 2026 rateâcut trajectory and risk sentiment.
Global Growth Set to Slow Further in 2026, Says UN Outlook
The United Nationsâ *World Economic Situation and Prospects 2026* projects **global GDP growth** slowing to about **2.7% in 2026**, before a modest pickup to 2.9% in 2027, remaining below preâpandemic averages. The report emphasizes uneven regional performance and warns that weak investment, lingering inflation differentials, and geopolitical tensions are weighing on the mediumâterm outlook.
This reinforces expectations for a âlowerâforâlongerâ global growth path.
World Economy âBending but Not Breakingâ as 2026 Begins
Allianz Global Investors assesses that the global economy is **in a lateâcycle expansion**, âbending but not breaking,â with growth expected to remain near trend in 2026. The outlook cites easier fiscal and monetary policy, healthy privateâsector balance sheets, and structural AI tailwinds, alongside uneven and stillâsticky inflationâparticularly in the USâtrending lower elsewhere.
Allianz has raised its **proârisk stance**, favoring diversified exposure across regions and asset classes, especially in AIâlinked themes and emerging markets.
US Economy Viewed as Likely to Stay in Expansion Mode in 2026
J.P. Morgan strategists put the probability that the **US economy remains in expansion in 2026 at about 80%**, with a 20% chance of growth exceeding expectations and reâaccelerating inflation. They highlight strong 2025 momentumâQ3 2025 real GDP grew at a 4.3% annualized rate versus earlier expectations near 3.3%âand see durable investment spending, including AIârelated capital expenditure, supported by easier financial conditions and fiscal measures like larger tax refunds.
Their base case assumes around 2% US growth in 2026, similar to 2025.
Global Markets Steady as Traders Await âJudgment Dayâ Data
US equity futures are trading roughly flat as investors wait for major data releases expected to move markets, while Asian and European stocks edge higher. Japanâs **Nikkei 225** gained about 1.6%, helped by a weaker yen and strong retailer earnings, and Europeâs main indices opened up, with Londonâs FTSE 100 supported by a sharp rise in Glencore amid merger talks with Rio Tinto.
The **US dollar index** has climbed to a fourâweek high and Treasury yields are little changed as traders stay cautious ahead of employment and inflation figures.
Oil Prices Climb on Rising Geopolitical Risks
Brent and WTI crude prices have extended gains, each rising about 0.9% in early trading after more than 3% gains in the previous session. Markets are reacting to heightened geopolitical risks, including US warnings it would respond âvery hardâ to any violent crackdown on protests in Iran, alongside other supply concerns cited in recent energy market commentary.
These developments keep upward pressure on energy prices and inflation expectations at a time when central banks are trying to consolidate disinflation gains.
US Labor Market Shows Slower Job Growth and Elevated Layoffs
Recent US data show **nonfarm payrolls** rising by only about 50,000 in December, capping 2025 with notably slower job creation and downward revisions to prior months. Manufacturing, mining, construction, transportation, warehousing, and trade sectors all shed jobs, and announced job cuts for 2025 totaled roughly 1.2 millionâthe highest since 2020 and about 58% higher than in 2024.
Despite this softness, hiring plans picked up toward yearâend, indicating employers still anticipate future demand.
Global Manufacturing Activity Expands Modestly but Export Orders Stay Weak
The **J.P. Morgan Global Manufacturing PMI** edged down slightly to 50.4, still signaling expansion for a fifth consecutive month and pointing to a tentative industrial recovery. Manufacturing output is growing in 18 of 29 countries, led by India, Vietnam, and Greece, but new export orders have fallen for nine straight months, underscoring persistent external demand headwinds.
This divergence suggests domestic demand is doing more of the heavy lifting in sustaining global manufacturing growth.
Key Inflation and Activity Data Ahead for US, Euro Area, and UK
The coming days will bring **US CPI, producer prices, retail sales, and industrial production**, providing a clearer read on inflation and growth at the start of 2026. In Europe, final December inflation figures for Germany, Italy, France, and Spain, along with eurozone aggregates, are expected to confirm largely benign price dynamics, while the UK will release monthly GDP data.
These releases are likely to shape expectations for the timing and speed of rate cuts by the Federal Reserve, European Central Bank, and Bank of England.
Upcoming IMF World Economic Outlook Update to Refine Global Projections
The IMF is preparing to release its **World Economic Outlook Update**, which will provide refreshed projections and analysis for the global economy in the near and medium term. The update, presented at a Brussels press briefing, will address growth prospects, inflation trends, and policy recommendations across member countries.
Markets and policymakers closely watch this report for guidance on global macro risks and baseline assumptions for 2026â2027.