MONEY MASTER

Key Takeaways Bank Negara Malaysia (BNM) is widely expected to keep the Overnight Policy Rate (OPR) at 2.75%,  but markets are increasingly looking for signals of a rate hike later this year. Malaysia's stronger-than-expected economic growth, driven partly by the AI boom, is reducing the need for accommodative monetary policy. Stable inflation and fuel subsidies have given BNM room to remain patient , unlike several regional central banks that have already tightened policy. The tone of BNM's policy statement may matter more than the rate decision itself. A stronger economy could eventually outweigh concerns over supporting growth, paving the way for policy normalization. Market Insight When  Bank Negara Malaysia (BNM)  announces its interest rate decision, most investors expect  no change . The bigger question isn't  whether rates stay at 2.75% —it's  what BNM says next. After holding rates steady for a year, the central bank could begin preparing markets f...

Key Takeaways Oil prices surged after fresh US airstrikes on Iran , raising concerns over global energy supplies. Asian stock markets remained relatively resilient , suggesting investors believe the geopolitical disruption is manageable for now. Markets are closely watching the Strait of Hormuz , a critical shipping route for global oil exports. Higher oil prices could reignite inflation concerns , potentially affecting central bank interest rate decisions. The market's calm response may change quickly if the conflict escalates further. Market Insight Fresh  US airstrikes on Iran  sent  Brent crude  up more than  2% , yet the reaction across equity markets was surprisingly muted. Normally, a military escalation in the Middle East would trigger broad selling across global equities. Instead,  Asian stocks were largely unchanged , while  US stock futures even edged slightly higher  after an initial bout of volatility. So why did oil jump while stocks...

Key Takeaways Japan's latest 30-year bond auction attracted its strongest demand since 2019 , despite yields remaining near record highs. Higher yields have made long-term government bonds more attractive , encouraging institutional investors to return. The successful auction suggests investors see value , even as concerns over inflation, government spending and the weak yen persist. Bond yields remain a key indicator  for Japan's economy, monetary policy and financial markets. The auction may signal a turning point , with selling pressure in Japan's long-term bond market beginning to ease. Market Insight For months, investors have been selling  Japanese government bonds (JGBs)  as rising inflation, expanding government spending and expectations of further  Bank of Japan (BOJ)  policy tightening pushed yields sharply higher. This week, however, sentiment shifted. Japan's latest  30-year government bond auction  recorded its  strongest investor dem...

Key Takeaways The Japanese yen has fallen to its weakest level since 1986 , despite rising domestic bond yields, breaking a long-standing market relationship. Mizuho believes traditional interest rate models are no longer reliable  for forecasting the yen's direction in the current environment. Markets are watching the 163 yen-per-US dollar level , with expectations that Japanese authorities may tolerate further weakness before intervening. Changes in global capital flows and hedging behaviour  are becoming more influential than interest rate differentials. A weaker yen supports Japanese exporters but increases inflationary pressure  through higher import costs. Market Overview The  Japanese yen  continues to trade near its weakest level in four decades, prompting market participants to reassess one of the most widely used methods for forecasting currency movements. According to  Mizuho Bank , the traditional relationship between  Japan-US interest rat...

Key Takeaways Bitcoin fell to its lowest level in 21 months , pressured by expectations of higher US interest rates and persistent ETF outflows. More than US$4 billion exited US-listed Bitcoin ETFs in June , highlighting weakening institutional demand. Concerns over Strategy's future Bitcoin purchases  have undermined confidence in one of the cryptocurrency's largest corporate supporters. Bitcoin has dropped over 50% from its record high  and fallen below its 200-week moving average, reinforcing bearish technical sentiment. This week's US nonfarm payrolls report  could become the next major catalyst for cryptocurrency markets. Market Overview Bitcoin  extended its sharp decline on Wednesday, falling to  US$57,742 , its lowest level since September 2024, as investors continued to reduce exposure to risk assets amid growing expectations that the  US Federal Reserve  will keep monetary policy tighter for longer. The cryptocurrency has struggled under the ...

Federal Reserve’s Tom Barkin warned that inflation remains too high despite early signs of easing. While falling oil prices are helping, persistent pressures from services, consumer spending, and AI-driven investment mean the path back to 2% inflation is still uncertain. Inflation may be slowing but it is not yet under control. What’s Happening Inflation still elevated PCE at  4.1% YoY  (highest since April 2023) Well above Fed’s 2% target Some signs of relief emerging Oil and gasoline prices falling after ceasefire Tariff and energy pressures starting to ease But underlying inflation remains sticky Services inflation still high Strong consumer spending continues New drivers of inflation AI infrastructure buildout adding demand pressure Businesses still factoring in current inflation when pricing What’s Really Changing The inflation story is evolving: Before →  Energy and war-driven inflation spike Now →  Broad-based and structural inflation pressures Even as oil pri...

Asian markets may look stable, but the underlying story has changed and investors need to pay attention. Asian stocks steady despite peace deal progress Oil falls to  ~US$75–78/barrel US-Iran ceasefire extended by 60 days Nikkei hits  record highs on AI momentum US stocks fall as  rate hike expectations rise Bond yields  moving higher again The oil story is getting better, but the interest-rate story is becoming more challenging. Oil Is No Longer the Main Risk With the peace deal in place: Supply disruption fears are easing Oil flows are expected to gradually resume Risk premium is being priced out   Lower oil = easing inflation pressure This is a positive shift for markets especially for energy-importing economies. But Rates Are Taking Over At the same time: The Fed is leaning  more hawkish Markets are pricing  possible rate hikes Bond yields are rising Higher rates are now the dominant driver This is why: US equities pulled back Growth stocks are und...

Japan has officially entered a new era of monetary policy and markets are paying attention. Key Points BOJ raises interest rate to 1% — highest since 1995 Marks a clear shift away from  ultra-loose policy era Signals  further policy normalisation ahead Bond purchases to remain steady until  April 2027 Decision passed  7-1 vote , showing broad support Meeting held  without Governor Kazuo Ueda  (hospitalised) Japan is no longer the world’s last ultra-low-rate holdout and that changes global capital flows. Why This Matters For years, Japan anchored global liquidity with: Near-zero interest rates Massive bond buying Cheap funding for global investors Now, that anchor is shifting. Higher Japanese rates = less global liquidity + potential capital rotation back to Japan Market Impact to Watch Yen:  Likely to strengthen over time Global bonds:  Upward pressure on yields Equities:  Possible volatility as cheap liquidity fades This could trigger an...

Global markets staged a strong rebound after the US and Iran reached a deal to reopen the Strait of Hormuz, easing fears over energy supply disruptions and inflation pressures. Relief Rally Across Asset Classes Equities and bonds moved higher in tandem: Asian stocks surged  over 3% S&P 500 futures rose  1.1% US 10-year Treasury yields fell to  4.42% Meanwhile, oil prices dropped sharply: Brent crude fell over 4% to below US$84 Stocks rose because lower oil prices reduce inflation and Fed risks , improving the outlook for both growth and monetary policy. Inflation Outlook Improves The reopening of the Strait of Hormuz could: Restore  global oil supply flows Remove  geopolitical risk premium in crude prices Ease  inflation pressures globally This strengthens expectations that central banks may  avoid further rate hikes  or even shift toward easing. Dollar Weakens, Risk Assets Gain US dollar declined  as safe-haven demand eased Bitcoin climb...

Rakuten Trade has flagged a looming  global “perfect storm”  and trimmed its  end-2026 target for the  FBM KLCI  to 1,770  from 1,800, citing rising macro risks that could unsettle markets. The “Deadly Triangle” Shaping Markets At the core of the concern is a  “deadly love triangle” : High global debt levels Lower interest rate pressure Weakening US dollar trend The US debt has surpassed  US$39 trillion , with annual interest costs nearing  US$1.2 trillion , limiting policy flexibility. Key implication: Central banks, especially the  Federal Reserve , may lean toward  rate cuts , which could  weaken the US dollar  and distort global capital flows. Rising Yields Add Another Layer of Risk Japan is emerging as a critical pressure point: 10-year bond yields at ~2.8% (highest since 1997) Risk of  yen carry trade unwinding  This could trigger  global liquidity tightening , amplifying volatility across equities and...

  Asian markets retreated as investors reassessed the balance between AI-driven growth and rising macroeconomic risks following the latest escalation in the Middle East. Oil Shock Reignites Inflation Concerns The immediate market reaction to the US strike on Iran was a rise in oil prices, with Brent crude climbing as investors priced in potential supply disruptions and renewed uncertainty around the Strait of Hormuz.  However, the larger concern is not oil itself. The real risk is that higher energy prices could push inflation higher at a time when markets are already debating whether the Federal Reserve may need to keep interest rates elevated for longer. Economists are expecting US inflation to accelerate again, with May CPI projected to rise to 4.2%, while strong labour market data has already reduced expectations for near-term policy easing.  Why Technology Stocks Are Under Pressure Technology and AI-related stocks have been the primary drivers of market gains over th...

Singapore equities opened weaker as  global risk sentiment deteriorated , with rising US rate expectations triggering a  broad tech-led selloff , even as domestic data showed  steady consumer demand . Wall Street Selloff Signals Shift in Sentiment US markets snapped a nine-week rally: S&P 500   -2.6% Nasdaq Composite   -4.2% Dow Jones Industrial Average   -1.4% The decline followed  strong jobs data , which raised concerns that the  Federal Reserve  may maintain a  hawkish stance . Tech stocks led losses: Nvidia   -6.2% Advanced Micro Devices  and  Intel   -7% to -13% range STI Opens Lower Amid Broad Weakness The  FTSE Straits Times Index  fell  1.47% , with  decliners significantly outnumbering gainers . Market sentiment was pressured by: Global tech selloff Rising  interest rate expectations Weak risk appetite across equities Retail Sales Growth Signals Consumer Strength Singapore’s reta...

CIMB Group Holdings Bhd  reported a slight earnings dip in 1QFY2026, as margin pressure weighed on core income, though early signs of stabilisation are starting to appear. Summary CIMB’s net profit edged down to  RM1.92 billion (-2.9% YoY)  due to weaker net interest income, but  improving margins and stronger non-interest income signal a potential turnaround ahead . Key Highlights Net profit -2.9% YoY  to RM1.92 billion Net interest income -5%  (margin pressure) Non-interest income +11.9%  (trading & forex gains) ROE: 11.0% CASA ratio improved to 43.3% Gross impaired loans stable at 1.7% CET1 ratio strong at 14.3% Segment Performance Consumer banking:  -23% (higher provisions, lower margins) Commercial banking:  +38% (strong recoveries) Wholesale banking:  -10% (lower one-off income) Digital & funding:  +11.1% (boost from TNG Digital) Key drag: margin compression and higher provisions in consumer segment Early Signs of Stab...

Gold prices edged lower as  a stronger US dollar and rising expectations of interest rate hikes  reduced the appeal of the non-yielding metal. Gold Under Pressure from Dollar Strength Spot gold declined  0.3% to US$4,527 per ounce , extending a modest weekly loss. The weakness comes as the  US dollar holds near a six-week high , making gold: More expensive for foreign investors Less attractive relative to  yield-bearing assets Rising Rate Expectations Weigh on Sentiment Markets are increasingly pricing in tighter monetary policy: ~60% probability of a Fed rate hike by December Elevated oil prices are fueling  inflation concerns , which may force the  Federal Reserve  to  keep rates higher for longer . Higher interest rates typically: Increase  opportunity cost of holding gold Strengthen the  US dollar , further pressuring prices Oil and Geopolitics Drive Inflation Risks Oil prices remain elevated amid uncertainty in  US-Iran ne...

The Federal Reserve is increasingly leaning toward  policy tightening , with a majority of officials indicating that  interest rate hikes remain on the table  if inflation continues to exceed target levels. Fed Minutes Reveal Shift Toward Tightening Bias Minutes from the April meeting of the  Federal Reserve  show that: Most policymakers are open to further rate hikes Inflation remains  persistently above the 2% target Policy may need to become  more restrictive if price pressures continue This marks a clear shift from earlier expectations of  rate cuts in 2026 . Markets Reprice Rate Expectations Following the release of the minutes: Investors are now  pricing in at least one rate hike this year Expectations have shifted sharply from earlier projections of easing The change reflects growing concern that  inflation is proving more stubborn than anticipated . Labour Market Strength Complicates Policy Outlook The Fed’s stance is supported b...