Xi-Trump Summit Is Over But Concerns about Iran and Inflation Continue – Currency Thoughts
Xi-Trump Summit Is Over But Concerns about Iran and Inflation Continue
May 15, 2026
The meeting between the Chinese and U.S. presidents exuded friendly optics but failed to allay fears about the continuing shutdown of the Strait of Hormuz and rising inflationary pressures felt around the world. More military confrontations were reported today from the Middle East.
The dollar wore its refuge currency crown as the 11th week of the Middle East conflict came to a close. The U.S. currency climbed overnight by 1.1% against the Mexican peso and New Zealand dollar, 1.0% versus the Australian dollar, 0.6% vis-a-vis the Korean won, 0.4% against the euro, Swissy and sterling but just 0.1% versus the yen which continues to get support from feared intervention. With a monetary review later this week in Indonesia, the rupiah remained around record lows.
Ten-year sovereign debt yields are sharply higher, gaining 13 basis points in Italy, 11 bps in France and Spain, 10 bps in the U.K., 9 bps in Germany and Japan and 8 bps in the United States.
Equity markets slumped today by 2.0% in India and Japan, 1.6% in Hong Kong, 1.0% in China, and 1.4% in Taiwan. Losses thus far in Europe today total 2.0% in Germany and Italy, 1.9% in the U.K., 1.5% in France and 1.3% in Spain. Declines in the Nasdaq and S&P 500 exceed 1.0%, but the Russell 2000 is firmer.
The price of West Texas Intermediate oil increased 2.7% overnight, while those of silver, gold and Bitcoin fell by 8.0%, 2.9% and 1.2%.
Corporate goods prices in Japan shot up 2.3% in April, their greatest month-on-month rise in 144 months, and that lifted their year-on-year pace by two full percentage points to a 35-month high of 4.9%. Yen-based import price inflation soared to 17.5% from 3.5% the month before.
South Korean import price inflation of 20.2% in April was almost as elevated as March’s 42-month peak of 20.4% and up from a -0.9% reading as recently as January.
Croatian consumer price inflation has risen to a 30-month high of 5.8% as of April from 4.8% in March, and 3.8% in February.
Italian CPI inflation last month got revised 0.1 percentage point lower but at 2.7% was still a full percentage point higher than in March and up from 1.0% in January.
Polish CPI inflation of 3.2% in April constituted a 10-month high.
Central bank officials in Peru and Romania as expected left their policy interest rates unchanged at 4.25% and 6.5%, respectively. Inflation rates in those economies of 4.4% and 10.9% exceed target now. The hope is that the oil-related supply disruption will fade, and in-target inflation will be restored by the end of next year. The last interest rate changes at those central banks, each a cut of 25 basis points, occurred in September 2025 and August 2024, respectively.
China’s current account surplus of $184.1 billion last quarter was at a 3-quarter low but 12.5% wider than a year earlier.
U.S. industrial production grew 0.7% last month, beating expectations and resulting in a year-on-year advance of 1.4%. Capacity utilization rose 0.4 percentage points back to a 2-month high of 76.1%. The Empire State monthly manufacturing index unexpectedly improved to a reading of 19.6, its best score since 29.7 in January 2024.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Central Reserve Bank of Peru, Japanese PPI and import prices, National Bank of Romania, U.S. industrial production
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