Donald Trump says a deal to reopen the Strait of Hormuz will be signed later today, but Iran has yet to confirm it and new Israeli strikes in Lebanon have introduced more doubt. And India’s inflation rate rises.
In our deep-dive interview, ANZ Head of Asia Research Khoon Goh looks at how Asia equity portfolio outflows in May have continued into June.
5 things to know in 5 minutes:
Donald Trump said on Saturday he expected to sign a deal on Sunday with Iran to re-open the Strait of Hormuz, but Iran did not confirm that. Since then, Israel struck again in Lebanon, prompting Trump to tell Israel and Iran not to ‘blow it.’ As of 4am Sydney/Melbourne time, which is 2pm on Sunday Washington time, a deal has not been done. ANZ Head of FX Strategy Mahjabeen Zaman sees a weaker US dollar if the deal is confirmed.
Mahjabeen sees the economic impact of a reopening varying by country, with the Fed’s overall approach important too, especially with new Fed Chair Kevin Warsh presiding over his first FOMC decision this week.
India reported its annual inflation rate rose to 3.9% in May from 3.5% in April, thanks to higher energy and food inflation. ANZ Economist Dhiraj Nim says the result was in line with market expectations.
New Zealand’s manufacturing sector slipped back into contraction in May, according to the BusinessNZ-BNZ PMI survey published on Friday. ANZ Senior Economist Matt Galt says it suggested New Zealand’s economy stalled after the surge in fuel prices, but any contraction is not rapid.
Malaysia was the only Asian economy to experience an outflow of debt portfolio holdings in May, according to ANZ Head of Asia Research Khoon Goh. He says the Prime Minister’s announcement of a possible early election led to market nervousness.
Cheers,
Bernard.
PS: Catch you tomorrow as we get set for that Reserve Bank of Australia rate decision.
