China’s policy support for the economy is likely to ease modestly in 2026, with the policy settings announced at last week’s National People’s Congress (NPC) suggesting that authorities are increasingly tolerant of a further moderation in GDP growth, says Fitch Ratings. The fiscal stance is set to be neutral to slightly contractionary, in line with our earlier expectations, implying that domestic demand will likely stay subdued and that deflationary pressure may persist.

We expect China’s fiscal deficit to decline slightly to 7.3% of GDP in 2026 on a like-for-like basis under Fitch’s fiscal deficit measure, from 7.6% in 2025, but to remain elevated. The budget sets a higher deficit of 8.3% of GDP on the same measure, which includes the four budgets presented in the Ministry of Finance Work Report. However, the government typically under-executes its budget plans; for instance, the 2025 deficit target was 8.8% of GDP. We expect under-execution again in 2026. (Fitch – Continue Reading)

Standard Chartered and Morgan Stanley now expect the Bank of England to cut interest rates in the second quarter, delaying earlier forecasts amid inflation ​risks from the Middle East conflict.

Oil and gas prices have jumped ‌about 50% and 90% since late February, according to StanChart estimates, raising inflation risks that could force central banks, including the BoE, to alter their easing path. (Reuters – Continue Reading)

Planning for US President Donald Trump’s state visit to China remains scattershot with barely three weeks to go, people familiar with the preparations said, with no final list of officials and executives joining the American leader in Beijing.

The March 31-April 2 visit was expected to build on a trade truce agreed to in October, when Trump last met with Chinese leader Xi Jinping. The upcoming trip — the first of four potential meetings between the pair this year — could yield a deeper reset in a turbulent relationship, some analysts had said.

But the lack of particulars around the meetings reflects the significant gulf that remains between the countries and a stark difference in approach between the generally last-minute preparation of the Trump administration and the careful planning of Chinese officials. (Semafor – Continue Reading)

President Donald Trump and his administration have so far offered mixed messages and contradictory explanations on the joint US-Israeli military campaign against Iran. And Monday - the 10th day of an operation that has rattled allies and shaken markets - typified this confusion around the war's timeline and ultimate goals.

After a tumultuous morning during which US stock market indexes dropped and oil prices surged, the American president began speed-dialling reporters in an apparent effort to soothe nerves. His comments, however, were lacking in clarity even when he was pushed for more detail.

"I have a plan for everything, okay?" he told a reporter from the New York Post when asked about spiking oil prices. "I have a plan for everything. You'll be very happy."

To CBS News, he said the war "is very complete, pretty much". (BBC – Continue Reading)