Weekly house view

Macroeconomics · 11 May 2026

0 min read

The CIO’s view of the week ahead.

The week in review

US President Donald Trump travels to Beijing for talks with China’s Xi Jinping starting on Thursday, as the world watches to see whether they can reach a common approach on Iran. Last week, hopes for a resolution to the war buoyed equity markets only for Washington and Tehran to fail to agree on terms to end the conflict and reopen the Strait of Hormuz.

The S&P 500¹ rose 2.4%. The two sides maintained their ceasefire and Iran’s foreign minister met his counterpart in Beijing. However, Israeli Prime Minister Benjamin Netanyahu said the conflict with Iran was “not over”. The agenda for the Trump-Xi meeting – the first US presidential visit to China in almost a decade – spans trade, Taiwan, the Iran conflict, artificial intelligence and more. The two leaders last met face-to-face in October 2025, when they established a fragile trade truce. This time, it will be crucial to see whether they emerge as rivals or partners.

The most exposed economies are starting to suffer from the fallout of the Iran conflict, with two million airline seats cut from this month’s schedules as airlines redraw their operations because of soaring fuel costs. The upward pressure on prices poses a conundrum for central banks, which must also grapple with the hit to growth. The central banks of Australia and Norway raised interest rates.

Quote of the week

“I have just read the response from Iran’s so-called ‘Representatives’,” Trump wrote on Truth Social. “I don’t like it – TOTALLY UNACCEPTABLE!” Iran’s response reportedly softened US proposals on degrading its nuclear assets.

Key data

The US economy added 115,000 jobs in April. However, the official unemployment rate stayed at 4.3% and there are signs consumers are starting to hurt: Disney reported a 1% drop in domestic theme park attendance in thefirst quarter, and McDonald’s reported a soft start to the second quarter.

The US ISM Purchasing Managers’ Index dipped to 53.6 in April. The prices paid component showed easing price pressures in the services sector.

¹ Source: Pictet WM AA&MR, Thomson Reuters. Past performance, S&P 500 Composite (net 12-month return in USD): 2021, 28.7%; 2022, -18.1%; 2023, 26.3%; 2024, 25%; 2025, 17.9%.

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