Monday: Oil set to fall as Iran conflict pauses

Oil prices are set to fall sharply in Asian trade this morning after the US and Iran paused their conflict in the Middle East. But market expectations for inflation and interest rates remain high. And Singapore is set to tighten monetary policy today.

In our deep-dive interview, ANZ Economist Krystal Tan explains why ANZ Research has boosted its growth forecasts for Korea in the next two years.

5 things to know in 5 minutes:

1. The US and Iran have paused their strikes and counter-strikes over the Strait of Hormuz since Friday night, offering some hope of de-escalation. That saw oil prices down nearly 4% in late Friday trade, with the potential for a lower open in Asian trade this morning. However bond markets have been less sanguine about the risks of inflation from the oil markets, says ANZ Group Chief Economist Richard Yetsenga.

2. Leading indicators of global business activity out on Friday were positive, says ANZ Head of G3 Economics Brian Martin.

3. Brian says the initial signs from the PMIs also suggest businesses may not pass on all their cost increases.

4. The Monetary Authority of Singapore (MAS) is expected to tighten policy later today, says ANZ Head of Asia Research Khoon Goh.

5. Khoon says the MAS is watching rising food inflation and is keen to control rising inflation expectations.

Cheers,

Bernard.

PS: Catch you tomorrow with a preview of Australian inflation data due on Wednesday.

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