Asia shares rally on easing tariff jitters, dovish cenbank bets
Singapore's FTSE Straits Times Index notched a record high for the ninth straight session, marking its longest winning streak since early 2014, underscoring investor confidence in the city-state's resilience amid global trade headwinds and its favourable tariff positioning relative to peers.
"Singapore's reciprocal tariffs are not just lower than Malaysia (25%) and Vietnam (20%), but also comparable developed economies which produce high-end exports, including the EU (30%) and Japan (25%)," said Maybank analysts.
Singapore ran a trade deficit with the U.S. last year. Following stronger-than-expected growth data, Maybank analysts expect the Monetary Authority of Singapore to maintain its appreciation bias at both the July and October meetings.
Both Vietnam and Indonesia have clinched trade deals with the United States before the August 1 deadline.
This has raised hopes that there could be more deals coming through amid ongoing negotiations, said Christopher Wong, a currency strategist at OCBC.
"Also there remain expectations that Fed will return to easing cycle at some point later this year to next year," Wong said.
Meanwhile, recent news from both Thailand and Indonesia has helped markets lift bets on further monetary policy easing.
Thailand is reportedly set to nominate Vitai Ratanakorn as its new central bank chief, a veteran banker popular for his dovish tilt. The equity benchmark in Bangkok was the top gainer among its regional peers on Thursday, rising 3.6% to its highest since late May.
"Earlier signs this week pointed to the appointment of Vitai Ratanakorn, who would have been seen as a dovish appointment and an advocate of lower rates as well as coordinated fiscal and monetary policy to revive the economy," said analysts at Citi.
Indonesia lowered interest rates on Wednesday and signalled further room for easing, pushing the equity index in Jakarta 2.2% higher over the last couple of days.
Meanwhile, currency markets in Asia were on edge amid speculation over Federal Reserve Chair Jerome Powell's future.
While U.S. President Donald Trump sought to calm nerves by stating he was "highly unlikely" to remove Powell, the uncertainty has added a layer of volatility across global markets.
Indonesia's rupiah fell to its weakest in more than three weeks, while the South Korean won hovered around its late-June lows.
The Thai baht, Singapore's dollar, the Philippine peso, and the Malaysian ringgit all traded lower.
HIGHLIGHTS:
** Indonesian 10-year benchmark yield edges higher to 6.583%
** Thailand central bank says worried about flood of cheap imports into country - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
an hour ago
- The Sun
Johor Bahru bus drivers strike disrupts Singapore commute
JOHOR BAHRU: Private employee Saiful Umar, 37, was among thousands caught off guard when around 100 Malaysian bus drivers operating to Singapore suddenly went on strike early this morning at the Sultan Iskandar Building (BSI). 'I was shocked, there was no information at all (on a strike),' he said. Passengers arriving as early as 5 am found no bus services, forcing some to walk one to two kilometres across the Johor Causeway to reach workplaces in Singapore. Saiful, who had to walk nearly two kilometres to Woodlands before getting a ride back to Tampoi, expressed frustration over the lack of prior notice. 'This situation is not only inconvenient but also affects our work and image,' he told Bernama. A viral video showed crowds at BSI at 5.30 am due to the halted bus services. Reports suggest the strike stemmed from drivers' dissatisfaction over salary adjustments and allowance cuts, allegedly reducing their monthly pay from RM2,800-RM2,900 to below RM2,000. Another passenger, K. Ramesh, 40, called the situation 'ridiculous,' urging the bus company to resolve the issue swiftly. 'This affects our daily routine and careers,' he said. Bus driver Atoi, 35, confirmed about 100 drivers began striking at 5 am in protest. By evening, services resumed, with no further disruptions observed. Johor Public Works Committee chairman Mohamad Fazli Mohamad Salleh confirmed the incident, having monitored operations with Singapore's LTA and bus operators earlier. – Bernama
The Star
2 hours ago
- The Star
Exclusive-Meta, X and LinkedIn appeal unprecedented VAT claim by Italy
FILE PHOTO: EU flag and Meta logo are seen in this illustration taken, May 22, 2023. REUTERS/Dado Ruvic/Illustration/File Photo MILAN (Reuters) -U.S. tech giants Meta, X and LinkedIn have lodged an appeal against an unprecedented VAT claim by Italy that could influence tax policy across the 27-nation European Union, four sources with direct knowledge of the matter said on Monday. This is the first time that Italy has failed to reach a settlement agreement after bringing tax cases against tech companies, resulting in a fully-fledged judicial tax trial being launched. According to the sources, this came about because the case went beyond agreeing on a settlement figure and sought to establish a broader approach focused on how social networks provide access to their services. Italian tax authorities argue that free user registrations with X, LinkedIn and Meta platforms should be seen as taxable transactions as they imply the exchange of a membership account in return for a user's personal data. The issue is especially sensitive given wider trade tensions between the EU and the administration of U.S. President Donald Trump. Italy is claiming 887.6 million euros ($1.03 billion) from Meta, 12.5 million euros from X and around 140 million euros from LinkedIn. Meta, the parent company of Facebook and Instagram, Elon Musk's social network X and Microsoft's LinkedIn filed their appeals with a first instance tax court after mid-July, when the deadline for responding to a tax assessment notice issued by Italy's Revenue Agency in March passed. According to several experts consulted by Reuters, the Italian approach could affect almost all companies, from airlines to supermarkets to publishers, who link access to free services on their sites to users' acceptance of profiling cookies. It could also eventually be extended across the EU where VAT is a harmonised tax. In a statement to Reuters, Meta said that it had cooperated "fully with the authorities on our obligations under EU and local law". It added that the company "strongly disagrees with the idea that providing access to online platforms to users should be subject to VAT". LinkedIn said it had "nothing to share at this time". X did not respond to a request for comment from Reuters. ROME SEEN SEEKING EU ADVISORY It is uncertain whether a full trial of the matter, which involves three levels of judgement and takes an average of 10 years, will go ahead. Following discussions with the three companies, Italy is preparing as a next step to seek an advisory opinion from the European Commission, the sources said. The Italian Revenue Agency will have to prepare specific questions, which the Economy Ministry will then send to the EU Commission's VAT Committee, which meets twice a year. Rome aims to submit its questions for the meeting scheduled to be held by early November, in order to receive the EU's comments in time for the following meeting in spring 2026. Italy's Economy Ministry and Revenue Agency declined to comment. The EU Commission's VAT Committee is an independent advisory group. While its assessment will be non-binding, a "No" could prompt Italy to halt the case and ultimately drop the criminal investigation by Italian prosecutors, according to the sources. The dispute is one of several between Europeans and U.S. Big Tech. On July 11 Reuters exclusively reported that Meta would not be tweaking its pay-or-consent model further despite the risk of EU fines. According to a Financial Times report on July 17, the European Commission has stalled one of its investigations into Musk's platform X for breaching its digital transparency rules while it seeks to conclude trade talks with the U.S. ($1 = 0.8588 euros) (Reporting by Emilio Parodi, editing by Giselda Vagnoni and Keith Weir, Kirsten Donovan)
The Sun
3 hours ago
- The Sun
Malaysian and Indonesian parliamentary leaders discuss ASEAN cooperation
KUALA LUMPUR: Dewan Rakyat Speaker Tan Sri Johari Abdul welcomed the Chair of Indonesia's People's Consultative Assembly (MPR RI), Ahmad Muzani, at Parliament House today. The meeting reinforced the longstanding diplomatic ties between Malaysia and Indonesia within ASEAN. According to a statement from the Malaysian Parliament, the discussions centered on enhancing parliamentary diplomacy to foster stronger people-to-people connections and regional prosperity. 'This meeting also laid the groundwork for closer cooperation between the two Parliaments ahead of Malaysia's leadership of the 46th General Assembly of the ASEAN Inter-Parliamentary Assembly (AIPA) from September 17 to 22, 2025,' the statement said. Johari highlighted the importance of joint efforts in nurturing ASEAN youth leadership through exchange programmes and cross-border initiatives. 'Developing young leaders capable of addressing global challenges is crucial for the region's future,' he said. Ahmad Muzani provided updates on Indonesia's new capital, Nusantara, in Kalimantan, which Johari acknowledged as a significant economic catalyst. 'This project presents opportunities for bilateral collaborations that will benefit both nations,' Johari added. – Bernama
