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CNBC Economy

Singapore tightens monetary policy in surprise move as rising oil prices rekindle inflation risk

Singapore on Monday unexpectedly tightened its monetary policy for a second consecutive time, moving preemptively against a renewed oil price surge even as inflation at home stays subdued. The Monetary Authority of Singapore said it will increase the rate of appreciation of the Singapore dollar's nominal effective exchange rate policy band "very slightly," with the adjustment smaller than April's. The width of the band and the level at which it is centered were left unchanged. Economists polled by Reuters last week had forecast the central bank to stand pat on its monetary policy stance. Unlike most central banks, the MAS conducts its monetary policy by managing the Singapore dollar exchange rate against a trade-weighted basket of currencies within an undisclosed band, rather than setting interest rates. "In an environment of continued heightened uncertainty, this calibrated adjustment to the policy stance builds on the tightening in April," the MAS said in its statement. "[The] majority was calling for no change in MAS policy this round, so the move was not quite a consensus trade," Selena Ling, Chief Economist and Head of OCBC Group Research told CNBC, adding that two straight policy tightenings mean the MAS will not become complacent about imported inflation. Singapore's core inflation, which excludes accommodation and transportation costs, ticked up to 1.6% in June from 1.4% in May, near the bottom of the MAS's 1.5%–2.5% forecast range for this year, with headline inflation at 1.9%. While transportation fuel prices quickly rose since the onset of the U.S.-Iran conflict, softer services inflation, particularly healthcare, communication, and education, helped offset much of the upward pressure on prices, according to BMI, a FitchSolutions company. "Imported-cost pressures typically pass through to broader consumer prices with a lag, so we still expect inflation to rise in the coming months," the intelligence group said. OCBC's forecast is for headline and core inflation to overshoot to around 2.5% and 2.3%, respectively, in the coming months, adding that inflation may only subside below the 2% mark from the second half of 2027. Singapore's near-total reliance on imported energy leaves it exposed to higher oil prices. Brent crude climbed back above $100 a barrel last week after Houthi militants attacked two Saudi tankers in the Red Sea, deepening a supply threat that had eased before the collapse of the Middle East ceasefire. The economy has so far shrugged off the turmoil as AI demand powers electronics exports.

Singapore tightens monetary policy in surprise move as rising oil prices rekindle inflation risk
Asia
The Hindu BusinessLine

Professional guidance for financial plans

Prema and Mohan were seeking professional guidance on their financial goals. Both are working in Bengaluru. Prema is working as a private school teacher, and Mohan is heading a business unit of an IT firm. They have two children, Ved (20), doing his Engineering in Bengaluru, and Vridhi (14), in Class IX. * To ensure adequate funds with liquidity based on their financial requirements. * Ved’s higher education fund to be placed with appropriate instruments for better liquidity. He may need around ₹40 lakh for the two-year master’s course in Europe. * Vridhi’s education goal is fluid at the moment. The parents intended to allocate a corpus sufficient to meet her education costs in India — for UG, excluding medicine. * Mohan wanted to ensure the family and their financial goals are protected, including his retirement at age 55, 10 years away from now. * Mohan wanted to ensure he builds a sizable wealth at the time of retirement. Prema and Mohan have inherited family properties and assets. One of their key objectives is to assess how much they can gift or transfer to their children after retirement without impacting their long-term financial independence. Mohan has an aggressive risk profile, whereas Prema has a balanced risk profile. They currently have more than 70 per cent in equity asset class, including Mohan’s stock options. * The family has adequate life and health insurance. Fixed deposits cover six months of lifestyle expenses and the liquidity available through other financial investments are adequate to cover for the liabilities as a contingency measure. * They do not have surplus cash to manage additional expenses or savings and investments, due to their EMI commitments. They have committed to EMI in the recent past without allocating adequately for regular investments/savings towards their medium-term goals. * If rental income is not received consistently or family expenses increase, the expected cash flow surplus may not materialise as expected. * Ved’s education expenses may be met with funds allocated from existing investments. This will reduce the equity allocation to 60 per cent from over 70 per cent at current level in the financial assets. As Mohan is receiving stock options year on year, the allocation to equity will still be maintained at the desired allocation in the next three-four years. It was also recommended to continue the regular contribution in PPF and NPS by Prema. * Since they intended to maintain the same lifestyle at retirement, the retirement expenses will start with ₹2.36 lakh per month in the next 10 years at 7 per cent inflation per annum. The family needs ₹7.3 crore to fund the retirement lifestyle for the next 35 years.

Professional guidance for financial plans
Asia
The Hindu BusinessLine

Balrampur Chini Mills: Why investors should accumulate this stock

Investors with a moderate risk appetite and investment horizon of three-five years can consider accumulating the stock of Balrampur Chini Mills (Balrampur). We believe that the company’s growth is at an inflexion point, as it transitions from a sugar, ethanol and co-generation player into an integrated bio-plastics company, with its foray into manufacturing of Polylactic acid (PLA). Balrampur is expected to commission its 8,000-tpa (tonnes per annum) PLA manufacturing plant, which has been set up at a cost of ₹3,080 crore, by Q2FY27. At the current price of ₹587, the stock trades 31 times its FY26 consolidated earnings and 25 times and 16.7 times its estimated FY27 and FY28 earnings respectively (Bloomberg consensus). Balrampur is among India’s integrated sugar producers with a crushing capacity of 80,000 tonnes per day and distillery capacity of 1,050 kilo litre per day (klpd). Despite sugar being a cyclical business, the company, through its efficient operations, has managed to generate consistent profits from its sugar business and reinvest it into better-margin ethanol business over the last few years. This has helped the company better the industry in terms of operating margins. As the company is poised to morph into an integrated bio-plastics player now, the pay-offs can be significant, if the company is able to monetise the PLA opportunity well. This can be a potential re-rating story for the stock for three reasons. For one, Balrampur will no longer remain vulnerable to the cyclicality in the sugar industry, as PLA will lend stability to the overall business. Two, the transition to a higher margin product such as PLA (given the management guidance of 35 per cent operating profit margin), will help improve overall margins, which will call for better valuations. For instance, in FY26, the company reported revenue of ₹6,271 crore, with an operating margin of 12 per cent, translating into operating profit of ₹741 crore. The PLA plant, according to management sources, can fetch a revenue of ₹2,000 crore at its peak, with a target operating margin of 35 per cent, which is ₹700 crore. This can potentially double the company’s operating profit over the next two-three years, if Balrampur can achieve scale sooner. Third, the company being the first large-scale integrated domestic player will not only be well positioned to play the import substitution market, but can also disrupt the plastic packaging market with its sustainable, bio-based products. So, the market potential can possibly be much bigger, over a period of time, than what is available to day (20,000 tonnes of PLA currently being imported into India). Further, the company plans to process gypsum, which is a by-product from PLA into lactogypsum boards by setting up a facility at Kumbhi. For 80,000 tonnes of PLA, the company will make 1.16 lakh tonnes of lactogypsum, which will translate into 63 lakh units of gypsum board, with a revenue potential of about ₹150 crore, as per management sources. The cost for the board facility will be around ₹160 crore, and will likely be commissioned in 18 months. While the new PLA business holds significant promise, the sugar and ethanol business may likely remain modest in the current year on three counts and this may provide an opportunity for investors to accumulate the stock. While sugar season 2026 (October 2025-September 2026) started on an optimistic note with output expectation of over 32 million tonnes (mt) and about 3.1 mt of diversion for ethanol, lower cane yield in key States – Maharashtra, Uttar Pradesh and Karnataka, was a dampener. Now, the production this year is expected to be under 28 mt. In May, the government announced a ban on exports till September, until clarity on consumption, production and current season acreage and cultivation emerges. While area under sugarcane across the country, until mid-July, has been higher by 1.5 per cent compared to last year, at 57.58 lakh hectares, up by 0.86 lakh hectares, deficient rainfall in eastern Uttar Pradesh (wherein seven out of Balrampur’s 10 plants are located), is a concern. The only silver lining is that tight supply conditions, if the production remains muted as expected, will support stable sugar prices. Also, the ethanol procurement price for B heavy molasses (₹60.73 per litre) and sugar juice (₹65.61 per litre), which has remained unchanged despite increase in cane costs, is expected to be revised this year. In FY26, State advised price (SAP) for cane was increased from ₹370 per quintal to ₹400 per quintal; however, ethanol prices were kept unchanged. The company recently did a preferential issue of ₹450 crore (₹193 crore by promoters) to fund the escalation in cost for PLA of ₹230 crore and ₹160 crore for the lactogypsum plant. While we are optimistic about the company’s long-term prospects, short-term challenges in the sugar and ethanol business may keep the stock price under check. For patient long-term investors, such weakness may be a good buying opportunity, with the only caveat being the successful scale-up of the PLA business. Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments. We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.

Balrampur Chini Mills: Why investors should accumulate this stock
Asia
The Hindu BusinessLine

Govt considering raising CCEA approval threshold for FDI proposals to ₹15,000 cr: Sources

The government is also considering a proposal to ease FDI norms for downstream investments to boost overseas fund inflows and create jobs. The government is considering a proposal to raise the threshold for foreign direct investment proposals requiring approval from the Cabinet Committee on Economic Affairs to ₹15,000 crore from ₹5,000 crore at present to further improve the country's investment climate, according to sources. The Cabinet Committee on Economic Affairs (CCEA) is a high-level committee headed by Prime Minister Narendra Modi. Its members include key Union Cabinet ministers such as the Home Minister and Finance Minister. As per the existing foreign direct investment (FDI) policy, in case of proposals involving total foreign equity inflow of more than ₹5,000 crore, the competent authority places the application for consideration of the CCEA. Below this limit, respective line ministries take a decision. Sources said that prevailing economic conditions, inflation, the growing scale of investments over the years, and the objective of promoting ease of doing business necessitate a review of the existing threshold. Earlier, a committee of secretaries, in its meeting, also suggested upward revision of the CCEA approval limit for FDI proposals requiring the government approval route. The government is also considering a proposal to ease FDI norms for downstream investments to boost overseas fund inflows and create jobs. As per the proposal, the government is considering exempting indirect foreign investment in Indian companies from obtaining its fresh nod where the upstream domestic firm has already received such approval. At present, prior government approval is required for downstream or indirect foreign investment in two cases -- sectors under the government approval route for FDI and investments from countries sharing a land border with India. The government has taken a series of steps to attract overseas inflows. The investments have crossed USD 1.16 trillion during April 2000 and March 2026. The top ten investors include Mauritius, Singapore, the US, the Netherlands, Japan, the UK and the UAE. Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

Govt considering raising CCEA approval threshold for FDI proposals to ₹15,000 cr: Sources
North America
CNBC Economy

What a divided Fed means for investors

Wall Street has a clear takeaway from this week's Federal Reserve decision: A hike is likely on the horizon as inflation remains a top priority. The Fed opted to hold interest rates steady at the second meeting led by Chairman Kevin Warsh. But between his commentary about inflation and the dissenting coalition of policymakers, investors are growing increasingly confident that the Fed's next move will be an increase. While the hold was widely expected by markets, three policymakers broke with the committee's decision to instead call for higher rates at this week's meeting. That marked the highest number of members pushing for an increase since September 2016, according to Ian Lygen, head of U.S. rates strategy at BMO Capital Markets. Back in 2016, the Fed went on to keep rates unchanged at its next meeting in November with two dissenters. But by December of that year, the committee unanimously voted on a 25-basis-point increase. "We're reading this as a Committee with vocal hawks but the majority is siding with Warsh," Lygen wrote to clients on Wednesday. Fed funds futures trading now suggests a more than 57% likelihood of a quarter-point increase at the September meeting, according to CME's FedWatch tool. About 53% of Kalshi traders predict that the Fed will hike rates, compared with 43% betting on another hold. "For now, it's likely that market pricing for a hike has simply been pushed forward," said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "September remains a live meeting." Stephen Douglass, chief economist at NISA Investment Advisors, said the three members' dissentions could signal the Fed landed on a "hawkish hold." Still, Douglass said he still expected the Fed's next move to be a cut in March of next year. Fed watchers said the central bank will closely analyze upcoming inflation reports as the ongoing energy price shock threatens to push up readings. Warsh said the Fed was focused on getting inflation down to its preferred annual rate of 2% after years of hotter readings. "You've heard this before, but we will deliver price stability," Warsh said on Wednesday. The problem: Getting there likely means policy tightening, according to DoubleLine Capital CEO Jeffrey Gundlach. "If you really want to get to 2%, I think you have to raise interest rates," Gundlach said Wednesday on CNBC's "Closing Bell."

What a divided Fed means for investors
Europe
The Guardian

US economy grows sluggish 1.5% in second quarter as inflation tops Fed target

The US Federal Reserve chair, Kevin Warsh, speaks during a press conference at the Federal Reserve building in Washington DC on Wednesday. Photograph: Shawn Thew/EPAView image in fullscreenThe US Federal Reserve chair, Kevin Warsh, speaks during a press conference at the Federal Reserve building in Washington DC on Wednesday. Photograph: Shawn Thew/EPAUS economyUS economy grows sluggish 1.5% in second quarter as inflation tops Fed targetConsumer spending remained resilient even as policymakers kept interest rates on hold The US economy expanded at a sluggish 1.5% pace from April through June as rising imports weighed on growth. But consumer spending rose. And the Federal Reserve’s favored measure of inflation grew more slowly last month despite remaining above the central bank’s 2% target. The commerce department reported on Thursday that growth in US gross domestic product (GDP) – the nation’s output of goods and services – decelerated from 2.1% in the first three months of 2026 and came in below economists’ expectations. The commerce department also said on Thursday that its personal consumption expenditures (PCE) price index, the measure of inflation favored by the Fed, rose 3.7% last month from June 2025 , down from a 4.1% year-over-year increase in May. Excluding volatile food and energy prices, so-called core consumer prices were up 3.3% from a year earlier, little changed from a 3.4% increase in May. The latest data paints a clearer picture of the effects the war in the Middle East has had on the economy after increasing energy prices and pushing inflation higher. The first GDP reading of this year captured the effects of just a month of war, but indicated that consumer spending was starting to slow as prices started to creep up. Oil prices have come down from their wartime high, and took a sharp downturn when the US and Iran announced a peace deal. But when that deal collapsed and the two countries began trading strikes again, oil prices climbed and still remain much higher than prewar levels. The pressure is growing within the Fed to raise interest rates in order to combat heightened inflation, which Kevin Warsh, the central bank’s chair, has acknowledged has remained too high for years. Though the Fed on Wednesday chose to leave its benchmark interest rate unchanged for the fifth straight meeting, three regional Fed presidents dissented, saying they wanted to raise rates to combat elevated inflation. It was the first time in a decade so many Fed officials had dissented in the same direction over a policy vote. Higher costs have frustrated Americans ahead of November’s midterm elections, which will determine whether Donald Trump’s Republicans keep full control of Congress. Two-thirds of Americans, including 49% of Republicans, say they have little faith the federal government will address the high prices they face, according to a Harris Poll survey released earlier this month. Still, the US economy has proven surprisingly resilient in the face of the Iran war and the spike in energy prices it caused. The job market has bounced back this year from a lackluster 2025, giving consumers the wherewithal to spend. Employers are adding an average 92,000 jobs a month this year, compared with fewer than 10,000 a month in 2025 when high interest rates and Trump’s erratic use of tariffs discouraged businesses from hiring. Thursday’s GDP report was the first of three commerce department estimates of second quarter economic growth.

US economy grows sluggish 1.5% in second quarter as inflation tops Fed target
North America
CNBC Finance

Wealth managers face a new challenger: their clients’ AI chatbots

Even high-net-worth clients who can afford top-notch advisors are asking artificial intelligence chatbots like Claude for portfolio recommendations and tax advice, wealth management leaders told CNBC. "My personal opinion is that ChatGPT is the single largest investment advisor in the world right now," said Matthew Fleissig, CEO and cofounder of Pathstone, a registered investor advisory with $185 billion in assets. Asking AI for a second opinion can help clients come up with informed questions and have deeper conversations with their financial advisors, according to firm leaders. That said, the practice comes with risks, such as getting incorrect advice or having personal information leaked. "I think for a client who's dealing with something that's very technically complex and doesn't have that grasp, it may be harder to differentiate between a hallucination or an error of fact versus a good insight that the engine has," said Michael Zeuner, managing partner at WE Family Offices. Moreover, as these large language models get more sophisticated and popular, wealth advisories – especially those that target the mass affluent — will have to do more to justify their fees, according to Morningstar's Sean Dunlop. He told CNBC that wealth management stocks have already pulled back as AI has encroached on the industry, such as an AI tax planning tool by Altruist released in February or a personal finance feature launched by OpenAI in May. Dunlop said it's unlikely that AI will wipe out traditional wealth managers — but they will do more than help advisors become more efficient. "I think the truth's probably somewhere in the middle where the service level is going to get better. You probably need fewer advisors to serve the pool of assets, which might itself expand a little bit, and there's going to be some group of customers that are willing to do it themselves that weren't before," said Dunlop, director of equity research at Morningstar. "At a minimum, it ought to raise the floor. Like, if you're an advisor and you're keeping half your client's balance in cash in an IRA, then this really ought to be a wake up call," he added. Pamela Lucina of Northern Trust said she first noticed clients using AI to double-check the firm's advice about 18 months ago and that it has become a more frequent occurrence since. "We've had clients tell us directly that they're going to ask AI the questions that they're going to ask us," said Lucina, the firm's chief fiduciary officer and leader of its trust and advisory practice. "I think what they're often testing us for is not the answer, but having more specifics or evidence that we've actually done these things before." Many prospective clients also use LLMs to help them decide whether to work with Northern Trust, she added. Before the rise of AI chatbots, typically only billionaire clients would ask the firm to submit a formal proposal for managing their wealth, according to Lucina. Now she estimates about half of clients send requests for proposals, even those with as little as $100 million in assets. Some have told the firm that they used ChatGPT or other LLMs to formulate their highly specific questions, she said. This process can save time and make client meetings more efficient, Lucina said.

Wealth managers face a new challenger: their clients’ AI chatbots
North America
CNBC Finance

Starbucks stock jumps as coffee giant raises full-year outlook

Starbucks on Wednesday raised its full-year outlook after reporting its fourth straight quarter of same-store sales growth. For fiscal 2026, Starbucks now expects adjusted earnings per share in a range of $2.55 to $2.65, up from its prior outlook of $2.25 to $2.45 per share. It now also projects global same-store sales will rise nearly 6% and U.S. same-store sales will climb more than 6%; the company was previously forecasting global and U.S. same-store sales growth of at least 5%. "This was the quarter our momentum became truly measurable," CEO Brian Niccol said in a video shared with the company's earnings press release. The coffee giant also reported quarterly earnings and revenue that topped analysts' expectations. The coffee giant reported fiscal third-quarter net income attributable to Starbucks of $1.05 billion, or 91 cents per share, up from $558.3 million, or 49 cents per share, a year earlier. The company's operating margins expanded to 13.6%, up from the year-ago period margins of 13.3%, thanks in part to tariff refunds. Starbucks did not say exactly how much it received in refunds. "The refunds we received in Q3 largely offset related tariffs incurred in the first three quarters of fiscal 2026," CFO Cathy Smith said on the company's earnings conference call. Excluding restructuring costs and other items, Starbucks earned 85 cents per share. Net sales dropped 1% to $9.3 billion due to the company's sale of a controlling stake in its China business. In November, Starbucks announced it was forming a joint venture with Boyu Capital, which would take over operations in the coffee chain's second-largest market. Although Starbucks' overall revenue fell, its sales at stores open at least 13 months climbed 7.9%, topping Wall Street estimates of 6%, according to StreetAccount. The coffee chain reported increases in both transactions and average check, showing that customers are returning to its cafes and spending more on their orders.

Starbucks stock jumps as coffee giant raises full-year outlook
Europe
The Guardian

Let them eat SUVs: Trump White House orders fleet of luxury cars as Americans struggle

Donald Trump greets the General Motors CEO, Mary Barra, and president, Mark Reuss, during a visit to the company’s Milford proving grounds in Michigan on Monday. Photograph: Andrew Harnik/Getty ImagesView image in fullscreenDonald Trump greets the General Motors CEO, Mary Barra, and president, Mark Reuss, during a visit to the company’s Milford proving grounds in Michigan on Monday. Photograph: Andrew Harnik/Getty ImagesThis Week in TrumplandUS newsAnalysisLet them eat SUVs: Trump White House orders fleet of luxury cars as Americans struggleAdam GabbattAmericans are facing a deepening affordability crisis but at least Trump and co have ... 250 new Cadillac Escalades This was originally published in This Week in Trumpland. Sign up to receive it in your inbox every Wednesday Gas prices are up almost a dollar a gallon since the day Donald Trump took office; mortgage rates just hit their highest level in nearly a year, and over the weekend a prominent economist said the Iran war is costing the average US household more than $1,200. Americans are struggling through a deepening affordability crisis caused largely by Trump’s ill-fated war against Iran. They are in need of a boost, something to lift the spirits. Perhaps the president could give a speech, letting the people know that we are all in this together. Or, he could give a speech announcing that the White House has just ordered 250 brand new Cadillac Escalades, giant SUVs which have a suggested retail price of more than $90,000 each and cost significantly more to customize for secure uses. “We ordered 250 Escalades. That’s how we look sharp in those cavalcades, you know,” Trump said during a rambling, hour-long address at a General Motors facility in Michigan. “We look sharp in those Escalades. Our guys are very spoiled. They’re very spoiled. They like the Escalade. So do I.” I’d like to think I would look sharp in an Escalade. But, like most people in the US, I cannot afford one: especially if, as seems likely, the White House orders the armored version of the SUV, which can cost more than $300,000. And then, of course, I’d have to fill the 24-gallon gas tank. The symbolism of Trump’s gesture, his fiddling with car specifications while Rome burns, is consistent with his Lucille Bluth-like behavior in recent weeks. He’s dismissed “affordability” as a term concocted by Democratic political consultants to criticize his presidency, introduced a new round of tariffs likely to push up prices, and refused to sign a rare bipartisan housing bill. It’s still shocking. Even Scrooge didn’t order a new horse and cart as Tiny Tim’s health declined. Yet here we are, in 2026, with a billionaire president crowing about spending at least $22m of Americans’ money on a fleet of luxury SUVs, an act which seems extremely unlikely to boost morale. “Hey I know inflation is out of control and a lot of folks can’t afford basic necessities, but at least we’re tackling waste fra ud and abuse by buying… *checks notes* 250 Escalades for the government,” the Angry Staffer account wrote on X, capturing much of the mood. The announcement of the car purchase was a baffling move in what was a confusing speech. Trump’s address in Michigan was supposed to be about US auto manufacturing, but instead his remarks took on transgender rights, “Marxist protesters” and how, should Democrats win control of the government: “In one year, the country will be absolutely bankrupt. You’ll live in squalor. You’ll live in fear. You won’t have police. You won’t have firemen. You won’t have anybody.”

Let them eat SUVs: Trump White House orders fleet of luxury cars as Americans struggle