MONEY MASTER

US President  Donald Trump  is attempting to  reset the economic narrative  ahead of midterm elections, as surging fuel prices driven by the Middle East conflict weigh on both the economy and Republican electoral prospects. Inflation Pressures Undermine Policy Messaging Rising costs across  fuel, food, housing, and insurance  have intensified concerns about  affordability , overshadowing the administration’s policy efforts. Despite promoting tax relief measures, including  tax exemptions on tips and overtime income,  analysts note that  cost-of-living pressures remain the dominant issue for voters . High gasoline prices, linked to disruptions in the  Strait of Hormuz , continue to feed into broader inflation, impacting household spending power. Limited Tools to Contain Energy Costs The administration has taken several steps to ease energy prices: Releasing oil from strategic reserves Adjusting shipping regulations Easing sanctions o...

Singapore has become the  first Asian economy to tighten monetary policy  in response to rising inflation pressures driven by surging global energy prices amid the Middle East conflict.  MAS Tightens Exchange Rate Policy Monetary Authority of Singapore  (MAS) announced it will  increase the slope of its exchange rate policy band , a move widely anticipated by economists. Unlike most central banks, MAS uses the  Singapore dollar exchange rate (S$NEER)  as its primary policy tool instead of interest rates. The central bank  left the band’s width and midpoint unchanged , signaling a  measured tightening approach  while maintaining flexibility. Oil Prices Driving Inflation Outlook MAS highlighted that  imported energy costs have already risen , and warned that  oil prices are likely to remain elevated  even if supply disruptions ease. Higher energy prices are expected to  feed through global supply chains , increasing a b...

Malaysia’s economy is expected to remain resilient in 2026, with  strong domestic demand and investments driving growth , even as global uncertainties persist. Key Highlights BNM forecasts GDP growth at 4%–5% in 2026 Higher than Ministry of Finance’s  4.0%–4.5% projection 2025 GDP grew 5.2% , beating expectations Key takeaway: Malaysia’s growth remains solid, supported by internal drivers despite global risks. What’s Driving Malaysia’s Growth? 1. Strong Domestic Consumption Supported by  steady income growth and labour market stability Civil servant salary adjustments to boost spending Private consumption remains the backbone of growth 2. Continued Investment Momentum Expansion driven by: E&E (electronics and semiconductors) ICT and digitalisation trends Ongoing infrastructure and approved projects Investment cycle remains positive, though moderating 3. Key Sectors Leading Growth Services sector (5.2% growth) Tourism (Visit Malaysia Year 2026) Financial services and I...

South Korea is ramping up emergency measures as the  Middle East conflict drives oil prices higher , exposing the country’s heavy reliance on energy imports and raising risks to growth, inflation, and supply chains. Government Activates Emergency Response System Prime Minister  Kim Min-seok  has called for a  “whole-of-government” crisis response , warning that the conflict could be prolonged and requires  urgent contingency planning . Authorities will: Establish an  emergency economic task force  meeting twice weekly Set up a  presidential-level crisis monitoring unit Accelerate policy coordination across ministries This reflects a shift toward  full crisis management mode  as risks intensify. $16.7 Billion Stimulus to Cushion Impact The government plans a  25 trillion won (US$16.7 billion) supplementary budget , equivalent to roughly  0.9% of GDP , aimed at mitigating the economic fallout. Key focus areas include: Offsetting ...

Japan’s latest wage negotiations delivered another strong outcome, with  pay increases exceeding 5% for a third consecutive year , reinforcing expectations that the central bank may  proceed with further policy tightening . Strong Wage Momentum Continues Japan’s largest labour federation, Rengo, reported: Average wage increase: 5.26% Base pay growth: 3.85% While slightly below last year’s initial 5.46%, the result still signals  sustained wage momentum , a key condition for Japan’s long-awaited  demand-driven inflation cycle . BOJ Rate Hike Expectations Firm The strong wage data supports the  Bank of Japan’s (BOJ)  path toward policy normalisation. Markets are pricing a  ~64% probability of a rate hike in April The BOJ has indicated it may act if  inflation trends remain intact despite external shocks This keeps Japan on track for a  gradual tightening cycle , after years of ultra-loose monetary policy. Inflation Dynamics Backed by Wage Growt...

New Zealand’s fiscal outlook has come under pressure after Fitch Ratings revised the country’s  credit rating outlook to “negative” , citing challenges in reducing government debt amid a weakening economic backdrop. Debt Concerns Drive Outlook Downgrade While Fitch maintained New Zealand’s  AA+ sovereign rating , it warned that  fiscal consolidation has been delayed , making meaningful debt reduction harder to achieve. Government debt is now projected to rise to  56% of GDP by fiscal 2027 , significantly higher than earlier expectations of around  36% . The agency noted that debt levels have increased sharply over the past six years due to  multiple economic shocks , raising concerns about long-term fiscal sustainability. Growth Slows, Limiting Policy Flexibility Recent economic data shows  growth is weakening , reducing the country’s ability to absorb external shocks. GDP grew just 0.2% in Q4 Prior quarter revised down to  0.9%  (below expec...

The European Central Bank may need to raise interest rates sooner than markets expect as the Iran war pushes energy prices higher and revives inflation risks, according to Governing Council member Peter Kazimir. While no move is expected at next week’s meeting,  upside inflation risks are now dominating the outlook , potentially bringing a rate hike closer than anticipated. Key Takeaways ECB hike could come sooner if energy shock persists Traders price ~40% chance of a quarter-point hike by June Further rate cuts now “off the table” Inflation risks seen shifting clearly to the upside Policymakers prepared to act without waiting for new forecasts Inflation Risks Back on the Radar The Iran conflict has triggered sharp swings in oil prices, raising concerns that: Businesses may pass through higher energy costs faster Workers may demand higher wages Inflation expectations could become unanchored According to Kazimir, the memory of the 2022 inflation shock — when euro-zone inflation exc...

Japanese equities suffered their  worst selloff since April , as surging oil prices and intensifying Middle East tensions rattled investors already shaken by weak US jobs data. Key Takeaways Nikkei 225 fell as much as 6.9% — biggest drop since April Oil surged above  US$110 per barrel Japan highly vulnerable due to 90% oil import reliance Market now in  technical correction territory  (down over 10% from recent peak) Japanese Stocks Hit Hard Nikkei 225  plunged up to 6.9% TOPIX  fell as much as 5.7% Tech and electronics names led declines: SoftBank Group Corp Advantest Corp The selloff comes after oil surged past  US$110 , as major producers curb output and conflict around Iran enters its ninth day. Key Point: Oil above US$110 is triggering sharp risk-off moves in energy-import dependent markets like Japan. Why Japan Is Especially Exposed Japan imports roughly  90% of its oil from the Middle East , making it one of the most vulnerable economies to...

China’s trade volumes surged to record levels at the start of 2026, but escalating tensions in the Middle East now pose fresh risks to global shipping and export momentum. Key Takeaways China’s trade volumes surged above last year’s record levels before the Iran conflict erupted. Over 59 million containers were processed in the first nine weeks of 2026, up more than 12% year-on-year. Escalating tensions around Iran now threaten Middle East demand and global shipping routes. Record Container Throughput in Early 2026 More than  59 million containers  moved through Chinese ports in the first nine weeks of the year — up over  12% year-on-year , according to the Ministry of Transport. The strong start extended the export surge seen in late 2025, when total outbound shipments reached  US$3.8 trillion , a record high. Goldman Sachs Group Inc.  noted that freight volumes from 20 major Chinese ports also exceeded 2025 levels. Key Point: China’s trade momentum was acceler...

Asian banks’ record lending surge into the Gulf is facing a major stress test as escalating tensions involving Iran threaten broader financial instability across the Middle East. Record Lending Now Under Pressure Asian and Chinese banks extended  over US$15 billion in loans to the Middle East in 2025 , triple the previous year and the highest on record, according to Bloomberg-compiled data. Most of the financing flowed into: Saudi Arabia United Arab Emirates The region has become a key destination for Asian capital as Gulf states push forward with large-scale economic transformation and infrastructure projects. Key Point: A record US$15 billion Gulf lending boom is now at risk due to escalating geopolitical tensions. Conflict Raises Financial Uncertainty The latest escalation — involving US and Israeli missile strikes on Iran — has heightened concerns that the conflict could disrupt capital flows and reshape regional lending strategies. Economists suggest banks may: Tighten exposur...

Prime Minister  Lawrence Wong  will deliver  Singapore Budget 2026  on  February 12 at 3:30 PM , marking the first Budget under the 15th Parliament. If Budget 2025 focused on recovery,  Budget 2026 signals a pivot toward high-quality, sustainable growth. Macro Backdrop: Strong Surplus, Stronger Leverage After a resilient 2025: GDP growth:  4.8% (advance estimate) Operating revenue:  S$98.5B (first 9 months) Corporate tax:  +11.6% YoY Key point: Singapore enters Budget 2026 with meaningful fiscal surplus and policy flexibility. This “dry powder” gives policymakers room to: Cushion cost-of-living pressures Accelerate green and digital transformation Strengthen long-term competitiveness 1️⃣ Cost-of-Living Relief — But Targeted Markets expect: Continued  utilities and transport subsidies SME rebates for rentals and utilities Extension of transfer schemes However, broad stimulus is unlikely. Relief will be precise, not expansionary — balancin...

Singapore attracted  higher investment commitments in 2025  despite ongoing geopolitical and economic uncertainty, with  China emerging as the largest source  of new fixed asset commitments for the first time, according to data from the  Singapore Economic Development Board  (EDB). Fixed asset investment commitments rose  5.2% year-on-year to S$14.2 billion , while total business expenditure increased  6% to S$8.9 billion . The data underscores Singapore’s continued appeal as a regional hub amid rising tensions between  China  and the  United States . China accounted for  20.6% of total fixed asset commitments , surpassing the US for the first time. In contrast, the US share fell sharply to  17.3% , from  55.5% in 2024 , while China’s share surged from just  2.5% a year earlier . China also made up  50.7% of total business expenditure , up from  15% in 2024 , reflecting the scale of Chinese corporate ac...

Quick Summary Surplus liquidity in China is flooding into metals markets , pushing gold, copper and silver to record highs Money supply is growing far faster than the real economy , reflecting weak consumption and investment Speculation, not physical demand , is driving much of the rally Gold stands out as a cultural and financial safe haven  for Chinese households What’s Driving the Metals Surge With  easy money and shrinking investment options , Chinese capital is pouring into commodities. Key forces at play: Ample liquidity  as the  People’s Bank of China  continues to support growth M2 money supply grew 8.5% YoY , far outpacing  nominal GDP growth of just 3.9% Property, equities, and deposits  offer unattractive returns Result:  Speculative trading explodes in metals futures Trading volumes in  silver, copper, aluminum, nickel and tin  on Chinese exchanges have surged to record levels. A Disconnect From the Real Economy Despite soari...