Daily Brief Macro: Momentum in Cambodia Rubber Sector Aligning with Industrial Ambitions and more

Highlights

• Cambodia’s NR production increases by 90% MoM to 11,200 tons in April

• NR exports rise 106.49% MoM to 15,900 metric tonnes in April

• Prime Minister lays emphasis on contract farming to boost rubber sector

• News that Iran and Oman were close to a deal on Strait traffic brought market relief, despite unacceptable conditionality and ongoing attacks, including from the Houthis.
• A shock decline in US payrolls and downward revisions provide an easy excuse for doves to hold fire too. They discount the falling unemployment rate from boomers retiring.
• US inflation data are next week’s global highlight, beyond any potential progress to reopen the Strait of Hormuz. We also look to UK GDP data and the RBA rate decision.

• Banxico unanimously held at 6.50%, in line with expectations, while reinforcing guidance for a prolonged pause as disinflation proceeds.
• Delayed convergence to the 3% target and upside inflation risks raise the bar for renewed cuts, even as near‑term forecasts improve.
• Future moves hinge on core services inflation, FX and global shocks, with a higher hurdle for easing than for simply extending the hold.

• While we have been correct in terms of a potential Iran-Oman agreement to jointly “manage” the Strait, it appears the role of the U.S. is not what we had envisioned…..yet.       
• Part of the Iran-Oman deal includes the U.S. lifting the blockade of Iranian ports plus releasing at least some frozen Iranian assets.                   
• This conditional aspect complicates matters for the U.S., and fully supports our view that a renewal of military activity carries a relatively high probability.