China’s economy expanded 5% in the first quarter of 2026, surpassing market expectations of 4.8% and accelerating from 4.5% in the previous quarter. The stronger‑than‑expected performance underscores the resilience of Chinese exports and signals that the economy has so far weathered the global energy shock better than anticipated.
The data reinforced optimism across world markets, which closed at record levels yesterday. The S&P 500 finished above 7,000 points for the first time, lifted by continued hopes that U.S.–Iran talks will extend the current cease‑fire in the Persian Gulf.
In Europe, policymakers are leaning toward keeping interest rates unchanged at their April meeting, according to Bloomberg sources. The move would reflect caution amid easing inflation and lingering uncertainty over global energy prices. Bond yields across the euro area eased slightly following the report.
Fiscal strains remain in focus as Italy’s debt‑to‑GDP ratio is projected to reach 138% this year, surpassing Greece’s and becoming the highest in Europe, according to finance ministry estimates. The revision is reigniting debate over how far the European Central Bank can go in withdrawing support without deepening southern Europe’s debt challenges.
The Financial Times reported that the European Union plans to relax merger regulations to encourage the creation of “European champions” capable of competing with large U.S. and Chinese corporations. The proposal, expected later this year, would mark a shift toward more industrial‑policy alignment within the bloc.
Following ASML’s forecast upgrade yesterday, Taiwan Semiconductor Manufacturing Co. (TSMC) has also raised its 2026 outlook, citing booming demand for AI‑related chips and capacity expansion. Semiconductor shares led regional gains in Asia, where Hong Kong surged 1.7% and most indexes ended higher.
In the automotive industry, Stellantis announced a $100 million investment to keep a factory near Paris operating, defying earlier closure plans. Meanwhile, Ford’s CEO is exploring expanded partnerships with Chinese automakers, reflecting the shifting balance of power in global EV production.
Shares in Europe traded 0.4% higher on average, following Asia’s strong close. U.S. futures pointed to a modestly positive open, while Brent crude rose 1.5% to $96 a barrel, buoyed by improved risk sentiment and ongoing supply concerns.
With China’s growth beating expectations, Europe edging toward policy stability, and Wall Street at record highs, investors are betting that geopolitics and technology demand will keep the global expansion intact — at least for now.
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