In today’s briefing:
- Labour’s Collapsing Credibility
- Why America’s Manufacturing Dreams Might Be Economic Nightmares
- US Equities Hit All-Time Highs—but Are Markets Ignoring Growing Risks?
- RBNZ: Policy Rate Held At 3.25% (Consensus 3.25%) in Jul-25
- Malaysia: 25bp Rate Cut to 2.75% (Consensus 2.75%) in Jul-25
- [IO Fundamentals 2025/27] Industrial Cleanup, Trade Tensions, and Diverging Inventory Data
- CX Daily: Huawei Cedes Some Control Over Sales to Automaking Partners, Sources Say
Labour’s Collapsing Credibility
- Labour failed to campaign on a platform up to the UK’s structural problems, depriving it of the support to deliver change in its first year. Reform UK now lead most polls.
- Spending cut U-turns compound the fiscal hole exposed by the slippage of optimistic assumptions, making further tax hikes and more persistent deficits seem inevitable.
- Far-centrism has been rejected, but challenges to Labour’s right and left break its ability to triangulate back towards success. Investors may not stay so forgiving.
Why America’s Manufacturing Dreams Might Be Economic Nightmares
- Germany’s GDP declined 0.2% in 2024, Japan’s industrial production contracted 1.1%. Meanwhile, America’s service-focused economy outperforms manufacturing-heavy competitors consistently.
- Tooling costs are 10x higher in America than China. Even 145% tariffs insufficient—need 350% tariffs to make domestic manufacturing viable.
- US services exports surpass lost manufacturing profits. Services employ 84% of private sector, pay more than manufacturing ($36 vs $35/hour).
US Equities Hit All-Time Highs—but Are Markets Ignoring Growing Risks?
- Surface Strength, Underlying Fragility: Despite record highs in U.S. equities, narrow market breadth, inter-market divergences, and macro-cycle pressures signal growing instability beneath the surface.
- Rising Tail Risks: Geopolitical tensions (e.g., fragile Iran-Israel ceasefire) and shifting U.S. trade policy (potential 70% tariffs) threaten to disrupt market momentum and trigger volatility.
- Prepare for Inflection: Timing models and liquidity indicators point to a Q3 turning point; investors should rebalance toward quality, raise cash, and deploy tactical hedges ahead of possible late-year turbulence.
RBNZ: Policy Rate Held At 3.25% (Consensus 3.25%) in Jul-25
- The RBNZ unanimously held the OCR at 3.25% after six consecutive cuts, marking the first pause in its easing cycle as inflation edges towards the top of the 1-3% target band.
- The Committee maintains an explicit easing bias, signalling that further rate cuts are expected if medium-term inflation pressures continue to ease as projected.
- Future monetary policy decisions will be heavily influenced by global trade tensions, domestic economic recovery momentum, and inflation expectations amid an explicitly uncertain outlook.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Malaysia: 25bp Rate Cut to 2.75% (Consensus 2.75%) in Jul-25
- BNM trimmed the OPR to 2.75%, a move anticipated by just over half of surveyed economists, reflecting a mildly surprising tilt towards accommodation.
- Future rate decisions hinge on tariff negotiations, subsidy rationalisation, and whether subdued core inflation persists within the 1.5%–2.5% comfort band.
- With liquidity bolstered by an earlier SRR cut and inflation benign, the MPC retains scope for one further 25 bp reduction should external demand weaken further, but ringgit stability and fiscal adjustments will temper the pace of any additional easing.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
[IO Fundamentals 2025/27] Industrial Cleanup, Trade Tensions, and Diverging Inventory Data
- Beijing’s push to cut inefficient capacity may support steel margins and create a steady floor for iron ore prices.
- Malaysia’s anti-dumping tariffs of 3.86-57.90% target Chinese steel exports, posing limited short-term impact but signalling broader risks to China’s iron ore demand over time.
- Portside inventories may continue rising as iron ore arrivals increase and weak pig iron output slows cargo pick-up across Chinese ports.
CX Daily: Huawei Cedes Some Control Over Sales to Automaking Partners, Sources Say
- Huawei /: Huawei cedes some control over sales to automaking partners, sources say
- IPO /: Li Ka-shing’s son takes insurer FWD public in Hong Kong
- Hikvision /: Chinese surveillance-gear maker fights Canadian ban
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