MONEY MASTER

Oil prices are dropping on hopes of a US-Iran deal, but a deeper shift may be underway beneath the surface. Key Points Brent crude fell below US$83  after recent sharp declines Weak China demand (-29% imports)  signals slowing consumption High US exports  continue to flood global supply Hormuz reopening will be gradual , not immediate Markets are shifting focus from  supply shock → demand weakness Oil is no longer just reacting to geopolitics — demand softness is starting to dominate the narrative. The Real Shift: Supply Shock → Demand Weakness It is the combination of: Weak Chinese oil demand (-29%) High US exports Gradual Hormuz reopening Together, these suggest the oil market is transitioning: From a  war-driven supply shock story Toward a  global demand weakness story This is a much more important shift for investors. Why This Matters Even if geopolitical tensions ease: Supply will  increase steadily Demand may  not keep up Inventories could...

Singapore’s economy delivered a strong upside surprise in 1Q2026, supported by  robust AI-driven demand , even as authorities flagged  rising risks from Middle East tensions and global trade uncertainty . GDP Growth Exceeds Forecasts Singapore’s economy expanded: +6.0% YoY in 1Q2026  (vs 5.7% in 4Q2025) Above forecasts of  ~5.2% (Bloomberg)  and  4.6% (Reuters) On a quarter-on-quarter basis: +1.0% QoQ , beating expectations of a contraction This reflects  strong underlying economic momentum , particularly in tech-related sectors. AI Demand Drives Key Sectors Growth was largely supported by  AI-related investments , boosting: Electronics and precision engineering Machinery and equipment trade Wholesale trade segment ( +11.7% YoY ) The government expects  AI semiconductor demand to remain strong , anchoring industrial growth. Sector Performance Mixed Key sector highlights: Manufacturing : +7.9% (slower vs 11.4% previously) Construction : +11.8%...

China has signaled willingness to  extend its trade truce with the United States , offering markets a degree of stability while setting clear limits on future tariff escalation. Negotiations to Extend Trade Agreement Beijing confirmed that trade teams from China and the US will  negotiate an extension of the one-year agreement reached in late 2025. The deal, initially agreed in Kuala Lumpur and formalised at a summit in Busan, included: Suspension of certain tariffs Easing of  rare earth export restrictions Pause on  investigations into China’s shipbuilding sector The current arrangement is set to run until  November 2026 . China Sets Boundaries on Tariff Levels China indicated it is willing to  tolerate US tariffs , but only within limits: Acceptable tariff level:  ~30% ceiling Current effective rate:  ~21%  (after US court rulings) This stance signals  pragmatism from Beijing , while pushing back against attempts by the US to  rei...

The  US dollar’s global dominance remains firmly entrenched , with any meaningful challenge likely  decades away , according to  Franklin Resources Inc . Structural Strength Still Supports the Dollar Sonal Desai, Chief Investment Officer at Franklin Templeton, highlighted three core pillars underpinning the dollar’s status: Scale of the US economy Depth and liquidity of financial markets Strong institutional credibility These factors continue to make the dollar the  primary global reserve currency , with no immediate rival capable of matching its ecosystem. No Credible Alternatives in Sight Despite growing debate around de-dollarisation, key alternatives face structural limitations: The  euro lacks a unified safe asset at scale China’s  Renminbi  remains constrained by  capital controls and limited convertibility Other assets like  gold and cryptocurrencies  lack the  institutional framework and liquidity depth  required As a r...

Malaysia’s equity market staged a modest rebound as improving global sentiment and resilient sovereign fundamentals helped offset concerns over geopolitical risks and a slowing global economy.  KLCI Gains on Banking Support and Regional Optimism The  FTSE Bursa Malaysia KLCI  rose  0.45% to 1,688.12 , supported by  buying in heavyweight banking stocks  and a firmer ringgit. Market sentiment improved in line with regional peers, following signs of  stability in the US-Iran ceasefire , which helped ease concerns over oil supply disruptions. Wall Street Rally Led by AI and Tech Names Overnight, US markets posted strong gains: S&P 500  +1.18% Nasdaq Composite  +1.96% Dow Jones Industrial Average  +0.66% The rally was driven by  AI-related developments and easing geopolitical tensions , with stocks like  Credo Technology and  CoreWeave  leading gains. IMF Warns of Slower Growth Amid Oil Shock The  International Mo...

Emerging markets suffered a sharp reversal in capital flows in March, with investors pulling out  US$70.3 billion , marking the  largest outflow since the Covid-19 market crash in 2020 . Massive Equity Selloff Led by Asia Data from the  Institute of International Finance  showed that  equities accounted for the bulk of the outflows , with  US$56 billion withdrawn  — the largest equity exodus in at least two decades. The selloff was heavily concentrated in  emerging Asia , which absorbed most of the equity withdrawals following strong inflows earlier in the year. This reversal represents a  “sharp regime break” , triggered by geopolitical shocks linked to the  Iran conflict . Oil Shock and Tech Repositioning Drive Risk-Off Shift The outflows were driven by a combination of factors: Oil prices surged ~50% to above US$100 , raising inflation concerns Investors reduced exposure to  technology-linked equities , a key driver of Asian mark...

A temporary ceasefire in the Middle East has failed to restore normal shipping conditions in the  Strait of Hormuz , as Iran continues to exert control through a de facto  “toll system” , keeping global energy markets under pressure. Strait Control Maintains Supply Risk According to reports, Iran has implemented a  politically driven access system  in the Strait: Iran-linked shipments:  Allowed free passage Friendly nations:  Charged fees exceeding  US$1 million per vessel Unfriendly nations:  Potentially blocked The policy effectively turns the Strait into a  strategic chokepoint , reinforcing uncertainty over global oil and gas flows. The arrangement remains in place despite the ceasefire agreement announced by  Donald Trump . Ceasefire Fails to Normalize Energy Flows While the US-Iran truce was expected to ease tensions,  shipping activity remains limited : Many vessels are  avoiding the Strait entirely Others are  forc...

Manufacturing activity across Asia remained in  expansion territory in March , but signs of  slowing momentum are emerging  as rising energy prices from the Middle East conflict begin to weigh on the region. Growth Holds, but Momentum Weakens S&P Global data showed that several economies, including  South Korea, Malaysia, and Thailand , recorded improved factory activity. Thailand led the region with a  PMI of 54.1 Malaysia returned to  expansion after a prior contraction South Korea also showed  strong improvement However, the broader  ASEAN Manufacturing PMI slipped to 51.8 , down from  February’s 53.8 , marking the  slowest pace of expansion since September . While still above the  50-point threshold , the data highlights a  clear loss of growth momentum . War-Driven Energy Shock Weighs on Industry The slowdown comes as the  US-Israel conflict with Iran disrupts energy markets , particularly via the  Strait of ...

The United Arab Emirates is stepping up efforts to restore global energy flows, signalling willingness to join a  multinational maritime force to reopen the Strait of Hormuz , as geopolitical tensions continue to disrupt supply. Strategic Move to Secure Critical Oil Route The UAE is advocating for a  “Hormuz Security Force” , aimed at: Escorting commercial vessels Protecting shipping from  Iranian attacks Restoring access to a route handling  ~20% of global oil and LNG flows The proposal highlights growing urgency among regional players to  stabilise energy markets and trade routes . Limited Global Support So Far Despite the initiative, several US allies have been  reluctant to commit military resources , reflecting: Concerns over  escalation risks Uncertainty surrounding the  ongoing conflict France has engaged with about  35 countries  on potential cooperation, but any coordinated action may depend on  an eventual ceasefire . UN R...

The ongoing Iran conflict is emerging as one of the  most significant energy shocks in decades , with disruptions to oil supply, rising prices, and market volatility drawing comparisons to past crises such as the  Gulf War (1990)  and the  Russia-Ukraine war (2022) . Supply Disruption Hits Unprecedented Levels The  Strait of Hormuz , a key route for roughly  20% of global oil supply , has seen traffic reduced to a trickle. Analysts estimate that  over 10 million barrels per day of supply are disrupted , marking one of the  largest physical supply shocks in recent history . Unlike previous crises, major producers have  limited spare capacity , making it harder to offset disruptions. Oil Prices Surge in Line with Past Crises Oil prices have surged sharply: Up ~80% year-to-date Comparable to spikes seen during the  1990 Gulf War While earlier shocks, such as in 2022, saw less actual supply disruption, the current situation involves  di...

Global oil markets are facing renewed disruption as  Saudi Arabia reduces crude shipments to key Asian buyers , highlighting the deepening impact of the ongoing Middle East conflict on energy supply chains. Supply Cuts to China and India State producer  Saudi Aramco  is expected to ship  around 40 million barrels to China in April , down from  48 million barrels in February . Shipments to  India are also set to decline , with volumes estimated at  ~23 million barrels , compared with  25–28 million barrels previously . The reductions reflect  logistical disruptions and supply constraints  caused by escalating tensions in the region. Strait of Hormuz Disruption Drives Market Shock The near closure of the  Strait of Hormuz , a critical global oil transit route, has severely restricted flows from the Persian Gulf. In response, Saudi Arabia has rerouted some exports through its  Yanbu port on the Red Sea , but capacity remains limit...

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 ...

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...