MONEY MASTER

Malaysia’s latest diesel subsidy reform is unlikely to become an inflation story. Instead, it is shaping up to be a fiscal management story. Under the expanded Budi Madani Diesel programme, eligible vehicle owners will continue to receive subsidised diesel through a targeted mechanism, while logistics operators under the SKDS scheme remain protected. As a result, the reform is designed to improve subsidy efficiency without creating a significant shock to transportation costs or consumer prices. Why Inflation Risks Remain Limited The market's biggest concern whenever fuel subsidies are adjusted is inflation. However, several factors suggest the impact should remain contained: Diesel accounts for only 0.2% of Malaysia’s CPI basket , limiting its direct influence on headline inflation. Logistics operators remain protected under SKDS , helping to prevent higher transportation costs from being passed on to consumers. Food, retail and service sectors are less likely to experience signifi...

Bank Negara Malaysia  declared a  RM5 billion dividend for 2025 , maintaining payouts to the government despite a  moderation in earnings . Earnings Ease After Strong Prior Year BNM reported  net profit of RM12.45 billion in FY2025 , down  5.7% YoY  from RM13.16 billion. The decline was driven by: Lower total income (RM14.35 billion vs RM14.98 billion) Costs related to  reserve management and monetary operations Despite softer earnings, the central bank sustained its  second consecutive RM5 billion dividend , following a  record RM5.25 billion payout in 2024 . Strong Reserves Provide Stability A significant portion of profits —  RM7.45 billion  — was allocated to the  risk reserve , which rose to  RM155.31 billion . This reserve acts as a  financial buffer  against: Exchange rate volatility Global financial market fluctuations BNM highlighted that  85% of its assets are denominated in foreign currencies , re...

France has delivered a  better-than-expected fiscal performance in 2025 , providing the government with  greater room to navigate the economic fallout from the Iran-driven energy shock . Deficit Narrows More Than Expected France’s budget deficit fell to  5.1% of GDP in 2025 , improving from  5.8% in 2024  and beating the government’s  5.4% target . The stronger outcome was driven by: Higher tax revenues Slower growth in public spending This puts the government in a stronger position to meet its  2026 target of 5% deficit , easing pressure after political uncertainty and prior credit rating concerns. Fiscal Relief Comes at a Critical Time The improved fiscal position arrives as Europe faces  renewed economic risks from rising oil prices and geopolitical tensions . The Iran conflict is expected to: Push inflation higher Weigh on  economic growth Increase  government spending pressures France’s stronger fiscal base offers  short-term f...

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 ...

If  the  Trump  administration’s  tariff  policy  has  demonstrated  anything,  it  is  this:  the  US  economy  can  withstand  higher  taxes  on  corporate  America  without  collapsing. That  lesson  is  increasingly  relevant  as  federal  deficits  widen  and  government  debt  climbs  to  record  levels. Tariffs  Raised  Billions —  Growth  Held  Up Tariffs  operate  like  taxes.  Importers  pay  them,  then  either  absorb  the  cost  or  pass  it  on  to  consumers. In  the  second  half  of 2025,  tariffs  generated  US$29.5  billion  per  month   in  additional  revenue  for  the  US  Treasury. Yet...

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...

Summary Indonesian markets came under renewed pressure after  Moody's  downgraded the country’s  credit rating outlook to negative , amplifying concerns over  policy uncertainty, governance, and capital outflows  following recent market turmoil. What Happened Moody’s cut Indonesia’s outlook to negative from stable , while keeping the  Baa2 rating unchanged The move followed  MSCI ’s warning over transparency issues that had already triggered a  US$80 billion market rout Stocks and currency weakened immediately  in early trade Market Reaction Jakarta Composite Index:   -2%  intraday, extending weekly losses Rupiah:  Fell to  16,880 per US dollar , near recent record lows International bonds:  Longer-dated dollar bonds slipped  0.3–0.5 cents , trading at  five-month lows Key point:  Investors are demanding a  higher risk premium  across Indonesian assets. Why Moody’s Is Concerned Moody’s cited: ...

Malaysia is pressing ahead with  fiscal reforms to narrow its deficit and rein in government borrowing , as part of a broader effort to strengthen public finances and reduce rising debt-servicing costs, Deputy Finance Minister  Liew Chin Tong  said in Parliament on Thursday. The reforms are anchored under the  Public Finance and Fiscal Responsibility Act (Act 850) , which has already delivered tangible results. Annual new government borrowing has been  reduced from RM100 billion in 2021–2022 to around RM75 billion in 2025 , reflecting stronger fiscal discipline and consolidation. To sustain this trajectory, the government is  broadening its revenue base  and improving collection efficiency through measures such as expanding the  sales and services tax (SST) , rolling out  e-invoicing , and tightening expenditure via  targeted diesel and RON95 fuel subsidies . Authorities are also moving to  rationalise statutory bodies  to impr...

Key Takeaways CBO cuts tariff-savings estimate by US$1 trillion , highlighting fiscal strain. Tariffs now expected to reduce deficits by  US$3 trillion  over 2025–2035 —  less than the US$3.4 trillion cost  of Trump’s tax cuts. Revision reflects  lower tariff rates , data updates, and bilateral trade deals. US deficit remains entrenched at  ~US$1.8 trillion , debt on track to break historic records. Tariff revenue assumptions may change if Trump proceeds with  US$2,000 dividend checks . A Supreme Court ruling against tariff hikes could further weaken revenue outlook. The US Congressional Budget Office (CBO) has sharply downgraded its estimate of federal budget savings from President Donald Trump’s sweeping tariff hikes, cutting the projected benefit by  US$1 trillion  and raising fresh questions about America’s long-term borrowing trajectory. In a Thursday update, the nonpartisan agency said higher customs duties are now expected to reduce cu...

  Key Takeaways: Dimon remains cautious on the US economy, citing the  lagging impact of tariffs, immigration, geopolitics, and fiscal policy . He warned that  expected Fed rate cuts will be immaterial  amid weakening conditions. JPMorgan is preparing for more  banking sector consolidation , while continuing its European digital expansion. Dimon’s Economic Concerns JPMorgan Chase CEO Jamie Dimon said the  full effects of Trump-era tariffs and new geopolitical headwinds  have yet to materialize, stressing that these risks often unfold over long cycles. Speaking on the  Office Hours: Business Edition podcast, he cautioned investors not to underestimate the delayed impact of tariffs, immigration pressures, and fiscal measures from Washington. “The economy is weakening,” Dimon said separately on CNBC, adding that Federal Reserve interest-rate cuts will have only a limited effect in countering the slowdown. Market and Policy Outlook While US GDP growth...

As uncertainty builds around US trade and fiscal policy, global fixed-income investors are moving east — and not quietly.   Key Stat :   $1.5 trillion  in local-currency bonds issued in Asia Pacific so far in 2025 — a  record high , up 6% YoY. What’s Driving the Shift? The big trigger? President Trump’s  tariff flip-flops , particularly the  April 2 surprise  that rattled global markets. The result: investors are hedging against US policy risk and  diversifying out of dollar assets . “Large inflows from pension and sovereign wealth funds are now flowing into Asia,” says Daniel Tan of Grasshopper Asset Management. And the performance justifies it:   Bloomberg Asia Pacific Aggregate Index  is up  3.9% YTD , outpacing the US equivalent at 3.5%.  Where the Flows Are Going India : ₹6.6 trillion ($76.4B) in corporate bond issuance, a 29% jump YoY China : Over $1T issued locally as firms take advantage of lower borrowing costs Austral...

  Fiscal Power Play Meets Monetary Pushback President Trump is entering full negotiation mode as he attempts to push through his landmark tax-and-spending bill ahead of the July 4th deadline. His involvement in negotiations is increasingly direct and aggressive — exerting political leverage over dissenters in the Senate and openly pressuring the Federal Reserve to lower interest rates. Market Relevance Legislative Timeline Risk:  Prolonged intraparty conflict could delay or dilute the fiscal package, introducing headline risk across Treasuries, equities, and USD. Fed Independence at Risk:  Public criticism and aggressive rate-cut demands from the President raise questions about the Fed’s autonomy — a factor that could add volatility to bond and FX markets. Macro Crosscurrents:  Elevated borrowing costs, surging debt service, and unresolved tariff threats create a complex policy landscape heading into H2 2025. Highlights & Strategic Signals Trump Turns Up the Heat...