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China inflation rises; Constellation beats forecasts; Eyes on US CPI and Trump-Xi meeting
China’s inflation hit 1.2% in April, signalling recovery despite weak consumption. Markets are eyeing the Trump-Xi meeting amid rising energy prices caused by geopolitical tensions between the US and Iran. Constellation Energy surpassed earnings forecasts due to AI demand, yet shares dipped. Investors await US CPI and further corporate reports to gauge global economic health.
China's inflation rose to 1.2% in April, beating forecasts as transport and healthcare costs offset falling food prices, signalling economic recovery.
The Trump-Xi meeting in Beijing could focus on energy security and US-Iran tensions, as rejected peace proposals drive crude oil and natural gas prices.
Constellation Energy beat Q1 expectations with a 64% revenue surge driven by AI data centre demand, though shares fell 1.3% on geopolitical jitters.
Volatility is expected this week with US CPI and PPI data releases, alongside key earnings reports from Cisco, Applied Materials, and Ross Stores.
Chinese inflation surpasses expectations, while market participants await Trump-Xi summit
According to data released by the National Bureau of Statistics of China, the headline inflation rate accelerated from 1.0% in March to 1.2% in April, exceeding analyst forecasts of a deceleration to 0.8%. An analysis provided by Trading Economics indicates that price increases were most pronounced in transportation (rising from 0.9% in March to 4.6% in April), healthcare (up from 1.9% to 2.2%), and education (increasing from 1.1% to 1.3%). Conversely, food prices contracted, falling from 0.3% to -1.6%. While domestic consumption remains relatively subdued, these inflationary indicators suggest a steady recovery in domestic demand.
Market participants have now shifted their focus to the meeting between Donald Trump and Xi Jinping, scheduled for 14–15 May in Beijing. As reported by Reuters, the presidential agenda is expected to address US–Iran ceasefire negotiations, energy security, and US sanctions regarding Iranian petroleum exports. Although China maintains significant strategic crude reserves and imports substantial quantities of Iranian oil, a cessation of hostilities and the subsequent normalisation of global energy supply chains would be highly beneficial for Beijing’s long-term economic stability.
Meanwhile, geopolitical volatility persists. The US President Trump rejected Iran’s response to a recent US peace proposal, calling it unacceptable. Consequently, energy commodities rallied in unison, reigniting concerns regarding global inflationary risks. The Brent crude futures contract (BRNN6) rose by 2.83%, while the WTI futures contract (CLM6) advanced by 2.87%. Similarly, gasoline futures (RBM6) appreciated by 2.02%, and natural gas futures (NGM6) surged by 5.60%.
Figure 1. China Inflation Rate (2025–2026). Source: Data from the National Bureau of Statistics of China; Figure obtained from Trading Economics.
Constellation Energy surpasses revenue and EPS forecasts, yet shares retreat
Constellation Energy Corporation (CEG) exceeded market expectations for both total revenue and earnings per share (EPS) during the first quarter of 2026. The energy provider reported revenue of $11.12 billion, comfortably ahead of the $8.46 billion forecast. EPS reached $2.74, slightly outperforming the $2.54 estimate. These figures represent a year-on-year (YoY) revenue growth rate of 64% and a 29% YoY increase in EPS.
The substantial revenue growth marks one of the most significant expansions for Constellation in recent years, as the firm continues to benefit from the escalating energy requirements of data centres dedicated to artificial intelligence. Despite these robust financial results, the company's shares depreciated by 1.30% to close at $299.69, weighed down by the prevailing instability in the global geopolitical environment.
Quarterly US financial results
The first-quarter 2026 earnings season continues this week. The following key institutions are scheduled to report, which may contribute to further volatility in the US equity markets:
Monday
- Constellation Energy (CEG)
Wednesday
- Cisco Systems (CSCO)
Thursday
- Applied Materials (AMAT)
- Ross Stores (ROST)
Key economic events this week
Several critical economic indicators are scheduled for release this week, with the following being of particular importance to market participants:
Monday
- China: Inflation Rate
- US: Existing Home Sales
Tuesday
- Australia: Westpac Consumer Confidence
- Australia: NAB Business Confidence
- Germany: ZEW Economic Sentiment Index
- Germany: Inflation Rate
- US: Inflation Rate
Wednesday
- US: Producer Price Index
- US: EIA Crude Oil Stocks Change
Thursday
- United Kingdom: GDP Growth Rate
- US: Retail Sales
