Oil eases to 3-week low on negative economic news
NEW YORK: Oil prices eased to a three-week low on Friday on negative economic news from the United States and China and signs of growing supply despite optimism US trade deals could boost global economic growth and oil demand in the future.
Brent crude futures fell 76 cents, or 1.1%, to US$68.42 a barrel by 1:44 p.m. EDT (1744 GMT), while US West Texas Intermediate (WTI) crude fell 91 cents, or 1.4%, to US$65.12.
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New Straits Times
17 minutes ago
- New Straits Times
Analyst: Malaysia leans on quiet engagement to seek favourable tariffs revision
KUALA LUMPUR: Malaysia remains locked in quiet engagement and possibly embracing a deliberate positioning with the United States (US) to lower the 25 per cent tariffs on its exports to the American markets as the Aug 1 deadline approaches. Unlike other Asean countries, which have struck quick deals with Washington, SPI Asset Management managing partner Stephen Innes said Malaysia's more measured response to the impending US tariffs likely reflects deliberate positioning rather than passivity. He said that contrary to countries pursuing headline-grabbing diplomacy, Malaysia often leans on quiet engagement and multilateral cooperation to navigate complex trade tensions. With the Aug 1 deadline nearing, exporters and investors are keeping a close watch on the outcome of these negotiations, which would reshape the cost dynamics of doing business between Malaysia and its third-largest trading partner. While regional peers such as Indonesia and Vietnam have already struck last-minute deals to reduce their tariffs to 19 per cent and 20 per cent, respectively, Malaysia is still seeking favourable terms that safeguard local industries without compromising national interests. The proposed tariffs — a revival of protectionist measures introduced during President Donald Trump's first term — have stirred fresh uncertainties across Southeast Asia, where economies are deeply embedded in global supply chains. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz has described the ongoing talks with the US as progressing well, with emphasis on striking a balanced outcome. "This low-profile approach fits with Malaysia's broader strategy, namely maintaining economic openness, avoiding entanglement in great power rivalries, and preserving regional alignment within Asean. "By staying restrained, Malaysia may be aiming to protect its long-term credibility as a stable, rules-based partner," said Innes. That said, he cautioned that the exposure is real as Malaysia's export economy is heavily tilted toward electrical and electronic goods, precision machinery, and intermediate components, many of which plug directly into US-bound supply chains. A 25 per cent tariff could disrupt flows, especially in semiconductors, sensors, and specialised modules that are difficult to reroute, he said. "The pain would be felt most in hubs like Penang, where small and medium enterprises and multinationals are deeply intertwined. "While some firms could shift volumes elsewhere, the high-tech nature of these exports makes substitution harder than it sounds," said Innes. The absence of a bilateral Free Trade Agreement (FTA) with the US limits Malaysia's negotiating toolkit, but Innes believed it doesn't shut the door entirely. He pointed out that Malaysia remained strategically important to US firms seeking reliable, non-China supply bases, which provides leverage particularly if Malaysia targets exemptions for specific sectors tied to US industrial or security interests, such as chip packaging or electric vehicle components. While countries like Indonesia have dangled major purchases to secure tariff relief, Malaysia's options are different, Innes said. "It is unlikely to buy its way into a deal with big-ticket orders. Instead, it can offer alignment, which is co-investment opportunities in green tech, digital infrastructure, or rare-earth refining," he said. According to Innes, these would support Malaysia's industrial roadmap while offering Washington something it values: supply chain resilience and diversification, but from a policy standpoint, the trade-off is nuanced. He noted that offering short-term concessions or budget support might help shield critical sectors from long-term dislocation. "But any deal must be carefully structured. It should channel benefits beyond just large exporters towards local suppliers, workers, and tech development ecosystems," said Innes, highlighting that if no deal is reached, the impact may not be catastrophic at a national level, but could be meaningful in key sectors. "Export growth could slow, investment plans may be paused, and employment could tighten in affected industries. The greater risk is longer-term: losing ground in a global supply chain reshuffle that increasingly rewards agility and alignment. Malaysia still has room to move, but the window is closing," he added. Meanwhile, Moody's Analytics economist Denise Cheok said Malaysia's economic exposure to the US through value-added trade is more significant than headline export figures suggest. Citing calculations based on OECD Trade in Value Added (TiVA) data, Cheok said that Malaysian domestic value added embedded in foreign final demand to the US accounted for slightly over 5.0 per cent of the country's gross domestic product. She noted that this includes not only direct exports of final goods but also intermediate components that eventually reach the American consumers and provide a more comprehensive measure than gross exports alone. "This compares to over 9.0 per cent of GDP for Singapore, which is highly trade-exposed, and about 2.0 per cent of GDP for Indonesia, which is more domestically focused and not as reliant on exports to the US," Cheok said. If the full 25 per cent tariff is imposed without any rerouting of supply chains, Cheok estimates the impact could shave up to 2.6 per cent off Malaysia's GDP in 2025, with the effects likely to be uneven across sectors. "The key manufacturing sector is likely to be hit hard — not only by the direct impact of the tariffs but also by global supply chain disruptions caused by the uncertainty surrounding tariff policies," she said. Cheok added that Malaysia, like many of its Southeast Asian peers, relies heavily on exports as part of its growth model, and structural changes to this would be difficult, even in the long term. "The fractured relationship between the US and its trading partners will likely continue beyond the next three years, and Malaysia should continue strengthening its trade relations with other economies, including Asean, as a counterbalance to this," she said. — BERNAMA
New Straits Times
an hour ago
- New Straits Times
New Zealand plans to scrap card payment surcharges
SYDNEY: The New Zealand government on Monday proposed to ban surcharges on most in-store payments made using debit and credit cards from May next year, a move it said could save roughly NZ$150 million (US$90.20 million) for Kiwi consumers. The plan follows the decision last year by New Zealand's Commerce Commission to lower fees that local businesses pay to accept Visa and Mastercard payments. "We are scrapping surcharges at the till. New Zealanders are paying up to NZ$150 million in surcharges every year. That's money that could be saved or spent elsewhere," Prime Minister Christopher Luxon told reporters. "You no longer will be penalised for your choice of payment method, whether that's tapping, swiping, or using your phone's digital wallet." Visa and Mastercard both welcomed the decision. Banning surcharges was "a welcome win for transparency and fairness at the checkout for consumers and reflects Visa's long-held view on surcharging globally," Anthony Watson, country manager for New Zealand and South Pacific, said. A spokesperson for Mastercard said the ban aligns New Zealand "with other leading economies at a time when payment acceptance costs have never been lower". The proposed ban will not include online payments or transactions made using foreign-issued cards, prepaid, travel and gift cards. New Zealand's Commerce Commission estimates consumers pay about NZ$150 million in surcharges annually, including up to NZ$65 million in excessive surcharges. "Surcharges cover the fees businesses pay for accepting contactless payments and credit cards, but we know these are often excessive. In some cases, the retailer doesn't even make it clear what the percentage is," Commerce Minister Scott Simpson said in a statement. The government plans to introduce the bill to ban most card surcharges by the end of this year. Shops in New Zealand typically charge consumers around 0.7 per cent for debit card payments and up to 2 per cent for credit card payments, according to New Zealand's Commerce Commission. Australia's central bank this month proposed to scrap surcharges on most debit and credit card payments for consumers, saying it no longer achieved the intended purpose of steering consumers to make more efficient payment choices.
New Straits Times
an hour ago
- New Straits Times
Stock markets boosted after EU, US strike trade deal
HONG KONG: Stock markets rose in Europe and Asia on Monday after the European Union and United States hammered out a deal to avert a potentially damaging trade war. News of the deal, announced by Donald Trump and European Commission head Ursula von der Leyen on Sunday, followed a series of US trade agreements last week, including with Japan, and comes ahead of a new round of China-US talks. Investors were also gearing up for a busy week of data, central bank decisions and earnings from some of the world's biggest companies. Trump and von der Leyen announced at his golf resort in Scotland that a baseline tariff of 15 per cent would be levied on EU exports to the United States. "We've reached a deal. It's a good deal for everybody. This is probably the biggest deal ever reached in any capacity," Trump said, adding that the levies would apply across the board, including for Europe's crucial automobile sector, pharmaceuticals and semiconductors. Brussels also agreed to purchase US$750 billion worth of energy from the United States, as well as make US$600 billion in additional investments. "It's a good deal," von der Leyen said. "It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic." Equities built on their recent rally, fanned by relief that countries were reaching deals with Washington. Paris rose more than one per cent at the open, with Frankfurt and London also tracking gains in Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei and Jakarta. Tokyo fell for a second day, having soared about five per cent on Wednesday and Thursday in reaction to Japan's US deal. Singapore, Manila and Mumbai were also lower. The broad gains came after another record day for the S&P 500 and Nasdaq on Wall Street. "The news flow from both the extension with China and the agreement with the EU is clearly market-friendly, and should put further upside potential into the euro... and should also put renewed upside into EU equities," said Chris Weston at Pepperstone. Traders are gearing up for a packed week, with a delegation including US Treasury Secretary Scott Bessent holding fresh trade talks with a Chinese team headed by Vice Premier He Lifeng in Stockholm. While in April both countries imposed tariffs that reached triple digits, US duties this year have temporarily been lowered to 30 per cent and China's countermeasures slashed to 10 per cent. The 90-day truce, instituted after talks in Geneva in May, is set to expire on Aug12, 2025. Also on the agenda are earnings from tech titans Amazon, Apple, Meta and Microsoft, as well as data on US economic growth and jobs. The Federal Reserve's latest policy meeting is expected to conclude with officials standing pat on interest rates, though investors are keen to see what their views are on the outlook for the rest of the year in light of Trump's tariffs and recent trade deals. "We think the data supports a Fed on hold in July, but absent a significant upside surprise in the upcoming inflation data, September could be a 'live' meeting for a resumption of rate cuts, especially if economic activity data and possibly overwhelming political pressure force the Fed's hand," said Michael Krautzberger at Allianz. The Bank of Japan is also forecast to hold off on any big moves on borrowing costs.
