Analysts

• Analysts warn that the US Federal Reserve's decision to maintain higher interest rates for longer will negatively impact Asia's tech sectors and slow global growth. • Economies with large youth populations and high import reliance, specifically India, Indonesia, Pakistan, and the Philippines, are expected to be most vulnerable to these conditions. • Asian central banks are increasingly diverging from the Fed's path to address local macroeconomic factors, such as varying inflation outlooks and energy price exposure.

Riyadh’s decision to join the US in striking sites associated with the Iran-backed Popular Mobilisation Forces further complicates a chaotic warUS-Saudi strikes on Iran-backed militia in Iraq on Wednesday have pushed the region into “uncharted territory”, analysts have warned.Amid stark warnings of a widening and increasingly “unpredictable” conflict, Riyadh’s decision to publicly join the US in striking sites associated with Iraq’s Popular Mobilisation Forces, killing at least 20 fighters, has added another complicating dimension to the war. Continue reading...

Leading thinktank says higher oil prices and inflation will give Andy Burnham a ‘challenging inheritance’Andy Burnham has been warned by a leading thinktank of “very difficult trade-offs in the next autumn budget” if the Iran war keeps oil prices and inflation high.The National Institute of Economic and Social Research (NIESR) said the new prime minister faced a “challenging inheritance” and his plans to revamp public services would meet severe pressure from persistently higher prices. Continue reading...

• Heightened tensions in the South China Sea have cast a shadow over the ASEAN Foreign Ministers' Meeting in Manila, increasing the urgency for a formal code of conduct between ASEAN and China. • The high-level diplomatic gathering includes key figures such as U.S. Secretary of State Marco Rubio and Chinese Foreign Minister Wang Yi. • Pitlo, president of the Philippine Association for Chinese Studies, warned that a surge in "close calls" and aggressive posturing creates a risky dynamic for regional stability.

• Hana Securities reports that the KOSPI's recent 25% decline mirrors historical post-shock rebounds, such as those following the China and Dubai shocks, rather than the dot-com bust. • Analysts argue that AI investment and semiconductor demand have not yet peaked, citing rising net profit and capital expenditure forecasts for U.S. Big Tech companies. • The recovery of the South Korean market is heavily dependent on a return of foreign buying and improving earnings outlooks for software firms.

• Kevin Warsh is influencing a shift in how the US Federal Reserve communicates its monetary policy decisions. • This change in communication style is forcing Singaporean market analysts to adapt their methods for interpreting Fed signals. • The shift matters because the Fed's policy direction directly impacts global financial markets and investment strategies in Singapore.

• Only five sectors within the S&P/TSX SmallCap Index recorded positive price returns last month. • Information technology led the gains at 17.50%, followed by consumer staples (3.04%), real estate (2.98%), health care (2.21%), and financials (1.88%). • This data highlights a significant divergence in performance across small-cap sectors, with tech drastically outperforming other industries.