Oil has jumped 2-and-a-half percent on renewed conflict in the Middle East. The US dollar strengthened overnight as traders continued to digest signals out of Jackson Hole. And New Zealand’s Government rushes to try to reduce energy prices.
In our bonus deep dive interview, ANZ’s Chief Economist for Southeast Asia and India, Sanjay Mathur, explains why Vietnam is not the only big winner from the friend-shoring trend to pull some parts of supply chains out of China.
5 things to know:
The price of Brent Crude rose 2.5% overnight after an Israeli strike in Lebanon. Markets are digesting Jackson Hole comments. Recent weakness in the US dollar may be over-extended, says ANZ Head of FX Research Mahjabeen Zaman.
The British pound jumped against the dollar to near a new 2024 high last week of over 1.32 US dollars. Mahjabeen says the rally was based on bets the Federal Reserve will ease rates faster than the Bank of England.
New Zealand’s Government last night announced urgent measures to find more gas and run down already-low hydro lakes to bring electricity prices back down.ANZ New Zealand Chief Economist Sharon Zollner says the high power prices have been cited by some exporters shutting their factories.
Sharon says there is a risk this spike in power prices turns into a double whammy for the economy of higher prices and lower production if more rain and wind doesn’t arrive to drag prices down..
The Singapore dollar has surged by more than a cent to a 10-year high of S$1.2999 per US dollar in the last 24 hours. ANZ Head of Asia Research Khoon Goh says this was largely driven by US dollar weakness.
Cheers
Bernard
PS: Catch you tomorrow with a look ahead to key Australian inflation figures.
