Global oil inventories are running dangerously low as a deal to re-open tanker traffic through the Strait of Hormuz has proven elusive, and industry executives and analysts warn there could be another oil price shock in the ​coming weeks, severe enough to upset broader financial markets.

Some fear the next move higher for oil prices would pose a risk to economic growth, bond yields and the bull market ‌for stocks. “We’re approaching unheard of inventory levels. I mean, really, really low levels. You can debate whether that’s going to hit those really low levels in two weeks or three weeks. But once you get to that point, you’ll see prices shoot up,” Neil Chapman, Exxon Mobil senior vice president, said at the Bernstein conference in New York on May 28.

Chapman said that if inventory levels get much lower, dated Brent, which is used to price more than 60 percent of globally traded crude, could rise to $150 ​or $160 a barrel.

Crude inventories and strategic reserve releases have kept oil prices somewhat under control in the four months that the war with Iran has kept supplies from reaching much of the world. ​Crude futures have been trading below $100 a barrel despite the strait remaining effectively closed.

For days, US President Donald Trump has said a deal to reopen the strait is imminent. But so far it has been elusive, and warnings from the oil industry have gotten sharper.

If stock draws continue at their current pace, sinking global oil inventories could hit critically low levels just as summer fuel demand hits ​its peak, the head of the International Energy Agency’s oil industry and markets division, Toril Bosoni, said on Tuesday.

“Once they (cushions) thin out, prices have to do more of the adjustment work. That means either consumers pay more or ​demand gets destroyed,” said Mehmet Beceren, vice president and senior market strategist at Rosenberg Research, who said a tipping point could be reached by the end of June.

If stock draws continue at their current pace, sinking global oil inventories could hit critically low levels just as summer fuel demand hits ​its peak, the head of the International Energy Agency’s oil industry and markets division, Toril Bosoni, said on Tuesday.

“Once they (cushions) thin out, prices have to do more of the adjustment work. That means either consumers pay more or ​demand gets destroyed,” said Mehmet Beceren, vice president and senior market strategist at Rosenberg Research, who said a tipping point could be reached by the end of June.

US crude stocks are down almost 64 million barrels since the start of the war, and have fallen ​for eight straight weeks.

The US is in the process of releasing 172 million barrels from the SPR, part of a coordinated effort by the IEA to release a record 400 million barrels of oil to combat rising prices.

Those stock releases alongside a ‌drop in Chinese seaborne crude imports, which in May hit the lowest level in nearly 10 years, have helped quell some of the supply shock.

“I think the risk of a second price shock is real, but the key point is that it may come from the exhaustion of buffers rather than from the initial Hormuz closure itself,” Shohruh Zukhritdinov, a Dubai-based oil trader, said.

Drawdowns in US strategic petroleum reserves, fuel substitution and other factors that have limited the price spike may not be enough if the disruption drags on, analysts in JPMorgan’s Data Assets and Alpha group said.

The White House did not respond to a request for comment.

KNOCK-ON EFFECTS

Investors said that the conflict has embedded a ​lasting risk premium in crude, with knock-on effects for ​inflation, bond yields and consumer spending.

Recent events suggest a lasting structural change in energy markets, said Joseph Tanious, chief investment strategist at Northern Trust Asset Management.

“The Strait of Hormuz is now firmly established as a persistent geopolitical chokepoint,” Tanious said, adding that a return to pre-war oil prices below $70 looked unlikely even if tensions eased.

As a result, he sees an uneven global impact, ​with Europe and Asia remaining more vulnerable to sustained energy inflation, while the US, a net exporter, is relatively better insulated.

Higher oil prices are “a modest headwind” ​for the US economy, said Adam ⁠Schickling, senior economist at Vanguard, thanks to domestic oil production and strong investments in artificial intelligence which have offset pressure on consumers.

Yet in a scenario where crude rises to around $120 per barrel and remains there for a year, US economic growth could slow by about 0.4 percentage points, according to Vanguard’s estimates.

For households, the impact depends less on the precise level of oil prices and more on how long they stay elevated. Consumers retain some buffer, with fuel costs ⁠accounting for a ​smaller share of income than in previous oil shocks. But that cushion diminishes over time.

If prices remained high through the next three ​months as the summer driving season begins, consumer spending could slow further, said Phil Blancato, chief market strategist at Osaic.

“Consumer sentiment is already at all-time lows, but if oil prices stay here for another three months, or move meaningfully higher in the short-term, start to ​look for a real economic impact,” Blancato said, urging portfolio diversification, including looking outside of equities.

Britain floated the idea of striking a tech deal with the EU to boost ties in AI and other innovative sectors on Friday, as part of a push to rebuild post-Brexit relations.

UK business and trade secretary Peter Kyle said he discussed the possibility with EU trade chief Maros Sefcovic during a Brussels meeting focused on other bilateral issues.

“There are enormous opportunities out there for us to partner,” Kyle told a conference in the Belgian capital. “A tech partnership, for example.”

With its vast capital markets London could play a key role in helping scale-up tech firms to rival American and Asian giants, he said.

“We are the spin-out capital of Europe. We are the unicorn capital of Europe,” Kyle later told reporters, referring to the creation of new companies and start-ups valued at more than $1 billion.

“But I want to go much further, and we are much more likely to go global by working with European countries and the European Union.”

Britain signed a similar -- later-suspended -- deal to align on innovation and spur private-sector investment with the United States in September.

The idea of a repeat with the EU comes as London and Brussels painstakingly negotiate other matters under a “reset” in relations vowed by British Prime Minister Keir Starmer to fire up Britain’s insipid economy.

Kyle met Sefcovic as the EU and UK are due to hold a summit at a yet-to-be confirmed date, likely in July.

Both parties are hoping to present several deals, namely on food and animal safety standards, a youth mobility scheme, and the linking of their emissions trading systems, at the event.

But discussions have hit a series of roadblocks.

Britain is said to be wanting a cap on the number of visas granted under the mobility scheme and to be unwilling to pay into some EU funds as requested by Brussels.

The EU on the other hand has been demanding greater access to British universities for its 18- to 30-year-olds -- and for them to be allowed to pay the same tuition fees forked out by their local peers.

Kyle said he had “hope and optimism” concerning the summit, after what he described as a “positive” and “vigorous” conversation with Sefcovic.

US-traded chipmakers plunged on Friday, losing about $1.3 trillion in market value, with deep losses in AI heavy hitters including Nvidia, Micron Technology and Advanced Micro Devices, as Broadcom's weak report earlier this week reverberated across Wall Street.

The PHLX chip index slumped 10.3% in its steepest one-day loss since March 2020, when the coronavirus pandemic threw global markets into a tailspin.

Friday's sell-off added to losses on Thursday after Broadcom issued a quarterly report that showed demand for its custom AI chips business falling short of lofty expectations.

The PHLX's combined loss of 12% over two sessions shows investors are becoming more concerned about pricey, high-flying tech stocks just as Elon Musk prepares a blockbuster initial public offering next week for SpaceX at an exceedingly high $1.75 trillion valuation.

The chip index hit a record high on Wednesday, and even after Friday's losses it remains up 73% year to date.

Nvidia, the world's most valuable chipmaker, fell about 6%, cleaving more than $300 billion from its market capitalisation.

Micron Technology tumbled 13%, evaporating about $150 billion in market value. Recent investor darling Marvell Technology gave back 17%, while AMD lost almost 11%.

"You've had a lot of people here that were just blindly buying the dip," said Dennis Dick, a proprietary trader at Triple D Trading. "Blindly buying the dip had been winning you money, but that ended today."

Worries about higher interest rates also spooked investors across the US stock market following stronger-than-expected jobs data, and the S&P 500 fell 2.6%.

One of the biggest beneficiaries of the AI race, Broadcom, lost 7.9%, bringing its two-day loss to almost 20%.

"The semiconductor sector was way overbought. That's why we're seeing the sell-off. I don't think it's the end of the (semiconductor) bull market," said Ohsung Kwon, Chief Equity Strategist at Wells Fargo.

The dollar clung to its recent strength near a two-month ​high today (4 June) as fresh Gulf hostilities sapped risk appetite, while the Japanese yen hovered near ‌the key 160 level that kept traders on intervention alert.

Iran on Kuwait damaged its airport and injured dozens yesterday, while the US military carried out strikes near the Strait of Hormuz, complicating prospects for a diplomatic end to the war.

Although Israel and Lebanon ​agreed to a broader peace deal remained elusive, keeping oil prices elevated and supporting demand ​for the safe-haven dollar.

The euro was 0.1% stronger at $1.1609. The European ⁠Central Bank is set to raise its deposit rate to 2.25% on 11 June to curb inflation. The ​British pound traded flat at $1.3427 .

The risk-sensitive Australian dollar was steady at $0.7129 after data showed Australia's balance on goods trade swung ​back into surplus in April.

The New Zealand dollar rose roughly 0.3% to $0.5875, recovering from a one-week low.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was a shade higher at 99.45, hovering near the ​strongest level since 7 April in the previous session.

"The USD's safe-haven status appears to be strengthening again" with oil ​prices and global yields rebounding on geopolitical tensions, said Sim Moh Siong, FX strategist at OCBC.

"There is no strong case for ‌a bearish ⁠USD," he said, adding the bank stays neutral and expects a firm but range-bound greenback.

On the data front, yesterday's data showed a measure of prices paid by US services businesses jumped to the highest level in nearly four years last month, cementing economists' views that the Federal Reserve would hold interest rates unchanged well into next ​year.

The Japanese yen fetched 159.92 ​per dollar, off lows ⁠yesterday that pushed it past the critical 160-per-dollar mark for the first time since 30 April, triggering action from authorities.

The 160 level is widely seen in markets ​as a line in the sand for potential official intervention.

Bank of Japan Governor Kazuo ​Ueda cemented a ⁠June rate hike in a clear toward inflation fighting, as the Iran war-driven energy shock sharpens price risks and opens the door to more frequent increases in borrowing costs.

"The hawkish tone has strengthened further, including a clear expression of ⁠concern about ​behind-the-curve risk," wrote Naohiko Baba, head of Japan research and chief ​Japan economist at Barclays. "We stick to our June rate hike call."

Bitcoin hit a four-month trough and was last traded 1.3% lower at $63,984. Ether hit ​its weakest since April 2025 before gaining 0.6% to $1,791.

Global oil inventories are running dangerously low as a deal to re-open tanker traffic through the Strait of Hormuz has proven elusive, and industry executives and analysts warn there could be another oil price shock in the coming weeks, severe enough to upset broader financial markets.

Some fear the next move higher for oil prices would pose a risk to economic growth, bond yields and the bull market for stocks.

"We're approaching unheard of inventory levels. I mean, really, really low levels. You can debate whether that's going to hit those really low levels in two weeks or three weeks. But once you get to that point, you'll see prices shoot up," Neil Chapman, Exxon Mobil senior vice president, said at the Bernstein conference in New York on 28 May.

Chapman said that if inventory levels get much lower, dated Brent, which is used to price more than 60% of globally traded crude, could rise to $150 or $160 a barrel.

Crude inventories and strategic reserve releases have kept oil prices somewhat under control in the four months that the war with Iran has kept supplies from reaching much of the world. Crude futures have been trading below $100 a barrel despite the strait remaining effectively closed.

For days, US President Donald Trump has said a deal to reopen the strait is imminent. But so far it has been elusive, and warnings from the oil industry have gotten sharper.

If stock draws continue at their current pace, sinking global oil inventories could hit critically low levels just as summer fuel demand hits its peak, the head of the International Energy Agency's oil industry and markets division, Toril Bosoni, said on Tuesday.

"Once they (cushions) thin out, prices have to do more of the adjustment work. That means either consumers pay more or demand gets destroyed," said Mehmet Beceren, vice president and senior market strategist at Rosenberg Research, who said a tipping point could be reached by the end of June.

"Once we move into the back half of June it is likely that we see oil prices rapidly appreciate" unless the Strait of Hormuz throughput normalises to pre-conflict levels, JPMorgan's Data Assets and Alpha group predicted, citing the bank's research.

In the US, the world's largest crude producer, crude inventories including the Strategic Petroleum Reserve fell to 791 million barrels in the week to 29 May, their lowest since February 2024, the Energy Information Administration said on Wednesday.

US crude stocks are down almost 64 million barrels since the start of the war, and have fallen for eight straight weeks.

The US is in the process of releasing 172 million barrels from the SPR, part of a coordinated effort by the IEA to release a record 400 million barrels of oil to combat rising prices.

Those stock releases alongside a drop in Chinese seaborne crude imports, which in May hit the lowest level in nearly 10 years, have helped quell some of the supply shock.

"I think the risk of a second price shock is real, but the key point is that it may come from the exhaustion of buffers rather than from the initial Hormuz closure itself," Shohruh Zukhritdinov, a Dubai-based oil trader, said.

Drawdowns in US strategic petroleum reserves, fuel substitution and other factors that have limited the price spike may not be enough if the disruption drags on, analysts in JPMorgan's Data Assets and Alpha group said.

The White House did not respond to a request for comment.

Knock-on effects

Investors said that the conflict has embedded a lasting risk premium in crude, with knock-on effects for inflation, bond yields and consumer spending.

Recent events suggest a lasting structural change in energy markets, said Joseph Tanious, chief investment strategist at Northern Trust Asset Management.

"The Strait of Hormuz is now firmly established as a persistent geopolitical chokepoint," Tanious said, adding that a return to pre-war oil prices below $70 looked unlikely even if tensions eased.

As a result, he sees an uneven global impact, with Europe and Asia remaining more vulnerable to sustained energy inflation, while the US, a net exporter, is relatively better insulated.

Higher oil prices are "a modest headwind" for the US economy, said Adam Schickling, senior economist at Vanguard, thanks to domestic oil production and strong investments in artificial intelligence which have offset pressure on consumers.

Yet in a scenario where crude rises to around $120 per barrel and remains there for a year, US economic growth could slow by about 0.4 percentage points, according to Vanguard's estimates.

For households, the impact depends less on the precise level of oil prices and more on how long they stay elevated. Consumers retain some buffer, with fuel costs accounting for a smaller share of income than in previous oil shocks. But that cushion diminishes over time.

If prices remained high through the next three months as the summer driving season begins, consumer spending could slow further, said Phil Blancato, chief market strategist at Osaic.

"Consumer sentiment is already at all-time lows, but if oil prices stay here for another three months, or move meaningfully higher in the short term, start to look for a real economic impact," Blancato said, urging portfolio diversification, including looking outside of equities.

SpaceX’s record-smashing IPO plan shows investors are eager to keep pouring money into all things AI, even as alarm bells ring for the wider economy.

And that has analysts wondering: Where will the cash come from if soaring inflation dents growth? Or if the artificial intelligence rollout proves less profitable than hoped?

HISTORIC INFLUX

Investment by AI labs is at historically “unprecedented” levels, with expected outlays by the 11 top American players over the next 12 months representing nearly three percent of US GDP, said Raphael Gallardo, chief economist at asset management group Carmignac in Paris.

At the beginning of this year confidence in that spending surge wobbled, with chipmakers and other tech hardware firms taking a hit on stock markets worldwide. But despite the outbreak of an ongoing war in the Middle East, “for now, those concerns largely have been dismissed by the markets” after reassuring profit reports, said Adam Sarhan of 50 Park Investments in New York.

“If you look at the actual earnings, those fears did not come to pass and in fact a lot of companies” committed to spend more on AI, Sarhan told AFP. Google for example announced this week that it would raise up to $80 billion for a major expansion of its AI infrastructure.

It said it was “compute constrained in the near term” -- jargon meaning it cannot build necessary infrastructure fast enough to meet demand. SpaceX meanwhile aims to raise $75 billion in an initial public offering expected next week, by far the largest IPO ever.

Its rivals OpenAI and Anthropic, behind ChatGPT and Claude respectively, are set to follow suit in the coming months, valuing the companies around a whopping $1 trillion.

GOBBLING UP CHIPS

Beyond US-based chatbot makers, companies worldwide have profited from the AI rush, especially chipmakers providing their computing power.

South Korea’s benchmark Kospi stock index for example has nearly doubled its value since January this year, propelled by chipmakers Samsung Electronics and SK hynix -- both also now trillion-dollar companies.

Those two companies alone account for half the Kospi’s market capitalisation.

“The fact that two companies make up such a large portion of the market highlights just how concentrated that dependence is, and that is the biggest risk factor,” said Kim Dae-jong, a professor at Sejong University.

In Taiwan, TSMC, a supplier to AI chip specialist Nvidia, represents on its own 40 percent of the Taipei stock market, while technology investor SoftBank in Japan this week surpassed Toyota as the country’s most valuable company.

In the United States, red-hot demand for Micron and Intel chips have seen their share prices more than double so far this year, while European equity benchmarks have soared thanks in large part to Infineon and STMicroelectronics.

TOO HOT FOR COMFORT

There are signs however that market expectations have outstripped the ability of companies to meet them.

This week the US chip specialist Broadcom saw its shares plunge despite its second-quarter profit having nearly doubled to $9.3 billion as its forecast for third-quarter chip revenue growth of over 200 percent failed to meet expectations.

“The support provided by huge capital inflows to AI and chip stocks is fading, exposing the often extreme overpricing in these sectors,” said Andreas Lipkow, analyst at CMC Markets.

“In a best case, investors will take profits ahead of the summer pause, and markets would have time to consolidate,” he said, especially if they sell tech holdings to buy the new SpaceX shares.

“If not, the likelihood of a major short-term correction on international equity markets remains high,” he said.

“These companies are cash cows and we’re in one of the biggest investment cycles in history”, said Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management in Switzerland.

But so far none of the three AI powerhouses -- SpaceX, Anthropic and OpenAI -- are turning profits, he noted, “which argues for more caution”, he said.

AI VS STAGLFATION?

Analysts and policymakers are worried that AI enthusiasm cannot escape the gravitational pull of soaring energy costs -- data centres suck huge amounts of electricity -- and slowing growth overall.

In the US alone, AI investments currently account for nearly nine-tenths of GDP growth overall -- overshadowing weak consumer demand and rising costs for small and midsize firms, said Gallardo at Carmignac.

“AI-related spending has become a huge part of the US growth story... the same handful of firms raising money, buying chips, leasing compute and booking revenues off one another,” added James Smith, an economist at ING.

“But the fact remains that if you strip out AI, the rest of US private non-residential investment has been falling year-on-year for six straight quarters,” he said.

And the situation could worsen if the US Federal Reserve, the European Central Bank and other central banks raise rates to contain energy-fuelled inflation, something many analysts consider inevitable.

The war in the Middle East has dented economic growth prospects worldwide, with a more severe shock likely if no effective ceasefire is agreed before 2027, the OECD warned today (3 June).

Global economic growth is now forecast to slip to 2.8% for 2026 if Gulf exports of oil and gas return to pre-conflict levels in the third quarter, the group of 38 industrialised countries said in its quarterly update.

Previously, the OECD had forecast full-year global growth of 2.9%.

But if the Mideast war continues into next year, global growth could slow to 2.1%, the OECD said -- well below the average annual growth of 3.45% seen from 2013 to 2019, before the Covid pandemic.

"The longer the disruptions last, the larger the economic and social costs become," the group's chief economist Stefano Scarpetta said in the report.

Many countries would risk falling into recession, he noted, and a drop in investment spending -- "including in energy-intensive AI" -- would likely push up unemployment.

Sustained high prices for energy as well as fertiliser and other key products from hydrocarbon production in the Gulf would weigh especially hard on developing countries that have "higher shares of energy and food in household consumption".

Even if the war sparked by US and Israeli strikes on Iran in late February ends in the coming weeks, the OECD forecasts global inflation rising to 4%this year from 3.4% in 2025.

In this "time-limited disruption scenario", the group expects US growth to slow to 2% this year and 1.8% in 2027, after growing 2.1% last year.

In the eurozone, where many countries are highly dependent on energy imports, GDP growth will slump to 0.8% this year after 1.4% last year, assuming a Mideast ceasefire is secured in the coming weeks.

The global economic outlook hinges on how long the war in the Middle East lasts, with recession in some countries and sharply higher inflation a real possibility if it drags on into next year, the Organisation for Economic Co-operation and Development warned on Wednesday.

If the conflict proves short-lived, Gulf oil and gas production could gradually return to pre-crisis levels from the third quarter with shortages confined to Asia and cushioned by strategic reserves and shipments from other producers.

If energy disruption persists well into next year, global growth could slow sharply to 2.1 percent in 2026 and 1.8 percent in 2027 - rates rarely seen outside major crises such as the 2008 to 2009 financial crash or the COVID pandemic.

Some economies could fall into outright recession, with Asian countries reliant on Middle East energy supplies expected to be hit hardest.

In the protracted disruption scenario, higher energy prices could add 0.4 percentage points to global inflation in 2026 and 1.3 percentage points in 2027, likely prompting central banks to hike interest rates by 0.5 to 0.75 percentage points in the short term.

In the baseline scenario, the OECD forecast that inflation across G20 economies would peak at 4 percent this year before slowing to 3.1 percent next year with interest rates largely on hold this year and cuts expected next year.

“Around one-third of OECD economies are projected to experience negative real wage growth this year.

Workers in these countries will see their living standards fall, which is the human reality behind the inflation numbers,” OECD Secretary General Mathias Cormann said.

Global trade growth is set to moderate following a strong 2025, though robust demand for AI-related goods and investment, especially in Asia, should provide some support.

In the baseline scenario, stronger energy exports are expected to support US growth, partly offsetting the drag from higher prices on household purchasing power. Growth is projected to ease from 2.1 percent in 2025 to 2.0 percent in 2026 and 1.8 percent in 2027.

In Europe, euro zone growth was seen slowing from 1.4 percent to 0.8 percent this year before rising to 1.2 percent next year as resilient labour markets and higher defence spending help offset government belt-tightening.

In Britain, growth is projected to slow to 0.9 percent this year before recovering to 1.1 percent in 2027 as global trade stabilises and financial conditions ease.

In Asia, China was seen slowing from 5.0 percent growth in 2025 to 4.5 percent in 2026 and 4.3 percent in 2027 with ample energy reserves limiting exposure to oil price spikes. Exports are set to benefit from lower US tariffs and a competitive tech sector, although a property slump remains a drag.

Japan is expected to be among the hardest-hit by trade disruptions linked to the Gulf conflict, with growth slowing from 1.1 percent in 2025 to 0.6 percent in 2026 before edging up to 0.8 percent in 2027, a downgrade from March.

While subsidies will help cushion the energy shock, the OECD said Japan needs a “clear and credible” plan to rein in public finances over the medium term as interest rates rise.

Any new US tariffs on European Union goods on top of the rates agreed last year would be unacceptable, senior EU lawmaker said on Wednesday, ​rejecting US claims the EU was not curbing trade in forced labour ‌goods as “utterly absurd”.

The US Trade Representative’s office on Tuesday proposed imposing additional duties of 10 percent or 12.5 percent on imports from 60 economies, including the European Union, saying investigations showed they failed to curb ​trade in goods made with forced labour.

“The impression is increasingly emerging that a tariff measure is sought first, ​and only then is a suitable legal justification found. The approach here is: ​if it doesn’t fit, make it fit,” he said.

Lange said that at the end of 2024, the ‌European Union adopted the world’s strictest legislation against products made using forced labour and that companies were already preparing for the new requirements to make supply chains more transparent, identify risks and demonstrate that countermeasures are in place.

The European Commission was working on the ​final implementation guidelines ​for authorities and businesses, he said.

“The claim that the EU is not taking sufficient action against forced labour does not stand up to serious scrutiny. ​Anyone who examines the facts knows that the European Union is ​setting global standards in this area,” he said.

“The key question will therefore be whether the proposed additional tariff of ten per cent will exceed the Turnberry agreements,” he said referring to ⁠an agreement ​from July 2025 in which the EU agreed ​to remove tariffs on US goods and Washington agreed to a maximum tariff on most EU goods of ​15 percent.

Gold prices slipped on Wednesday, as renewed hostilities ‌in the Middle East pushed crude higher and stalled US-Iran talks, while investors awaited upcoming US economic data.

Spot gold fell 0.5 percent to $4,460.36 per ounce by 0702 GMT, after rising ​more than 1 percent in the previous session. US gold futures for August ​delivery slipped 0.7 percent to $4,488.90.

US Secretary of State Marco Rubio said on Tuesday that President ​Donald Trump’s negotiating team has not offered Iran sanctions relief in exchange for reopening the Strait of Hormuz and insisted that any sanctions relief was tied to Tehran giving up its ​nuclear programme.

“The market is now looking at the possibility that this ceasefire with ​Iran may not hold even though Trump is going to push for a peace deal ‌resolution,” said Kelvin Wong, a senior market analyst at OANDA.

“If we start to see further escalation, that could also dampen whatever recovery that gold might have had.”

Oil prices rose more than 1 percent, deepening concerns over inflation and interest rate hikes.

Cleveland ​Federal Reserve President Beth ​Hammack said on Tuesday the US central bank may need to raise interest rates soon should already-high inflation pressures continue to mount.

Investors are ​now awaiting the US nonfarm payroll data, due later in ​the day, and employment report due on Friday to gauge the Fed’s monetary policy path.

Although gold is typically viewed as a hedge against inflation, it tends to lose its appeal ​as a non-yielding asset in a high interest-rate ​environment.

The Trump administration on Tuesday (2 June) proposed imposing additional duties of 10% or ​12.5% on imports from 60 economies after determining that their failure to curb trade in ‌goods made with forced labour is unreasonable and restricts US commerce.

The proposal from the US Trade Representative's office (USTR) is the latest finding from a Section 301 unfair trade practices investigation to be released as the Trump administration seeks to ​rebuild its emergency tariffs, which were struck down by a US Supreme Court decision in ​February, Reuters reports.

The USTR said it determined that it would impose 10% duties related to ⁠the forced labour investigation on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, ​Cambodia, El Salvador, Guatemala, Malaysia, Taiwan and Britain.

The trade agency said it would impose additional duties ​of 12.5% on the remaining 45 countries that it investigated.

"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable," US Trade Representative Jamieson Greer said in a statement. "This creates ​a dynamic where American workers are forced to compete globally on an uneven playing field."

Reacting to the news, Fazlee Shamim Ehsan, executive president of BKMEA and president of the Employers Federation of Bangladesh, told TBS, "There is no justification for imposing this new tariff on Bangladesh, as the country is not among those accused of using forced labour.

"They are trying to use tariffs as a tool. This will ultimately harm the free market economy and the global economy."

The USTR said ​it was also proposing a textile mechanism that would allow for a certain volume of apparel and textile imports ‌to enter the US at a reduced tariff rate, though the duties and volumes were not disclosed, according to the Reuters report.

The announcement comes ahead of the 24 July expiration of a 10% temporary tariff imposed by the Trump administration on 10 February, the day the Supreme Court struck down US President Donald Trump's tariffs under the International ​Economic Emergency Powers Act.

The trade agency ​is also expected to soon unveil the findings of another major Section ​301 probe into ⁠the buildup of excess industrial capacity in 16 trading partners, including China.

The USTR said it would accept public comments on the proposed tariffs and other remedies through 6 July, with a public ​hearing scheduled for 7 July.

Dr Mohammad Abdur Razzaque, the chairman of Research and Policy Integration for Development - RAPID), told TBS, "It is unfortunate that a matter as universally important as the eradication of forced labour is being addressed through a unilateral trade investigation. This approach of the US appears to establish a new benchmark not grounded in any widely accepted international legal obligation."

Bangladesh has long supported international efforts to eliminate forced labour and remains committed to strengthening labour standards and enforcement, he mentioned.

"However, the present USTR proposal raises important conceptual, legal and practical questions that warrant careful consideration, particularly given its potential implications for developing countries and for the broader rules-based trading system," Razzaque added.

Bangladesh should support the objective but challenge the conceptual basis of the USTR framework, he said, adding, there is an important distinction between prohibiting forced labour itself, which is widely recognised under ILO conventions and domestic legal systems, and imposing a dedicated border measure that bans imports allegedly linked to forced labour. Bangladesh can argue that the latter represents one regulatory instrument among several and that its absence should not automatically be regarded as an unreasonable trade practice.

"Bangladesh should pursue a dual-track diplomatic strategy. On one track, we should work with other affected economies, including developing and advanced countries, to argue for proportionality, recognition of alternative regulatory approaches through international consensus, adequate transition periods, etc.

"On the other track, Bangladesh should maintain close bilateral engagement with Washington and present a credible domestic reform roadmap. Such a roadmap could include legal review, customs enforcement improvements, supply-chain due diligence measures, labour-inspection strengthening, and institutional coordination," Razzaque further said.

Bangladesh needs to project itself as reform-oriented and cooperative while avoiding unnecessary concessions or confrontation, he opined.

"It has been a matter of concern that the USTR proposal reflects a growing tendency to use tariff threats to advance regulatory norms that have not been established through multilateral agreement. While combating forced labour is a legitimate and widely shared objective, making market access conditional on a specific US-preferred regulatory model risks weakening the MFN-based trading system and further fragmenting global trade governance," Razzaque concluded.

A surge of US crude oil is arriving in Asia, but the record volumes are nowhere near enough to offset the loss of cargoes from the effective closure of the Strait of Hormuz.

Asia’s imports of US ​crude were 63.56 million barrels in May, the most for a single month although at 2.05 million barrels per day (bpd) they were slightly ‌behind the 2.07 million bpd from June 2023, according to data compiled by commodity analysts Kpler.

However, more US oil is on the way, with Kpler tracking arrivals of 2.32 million bpd in June and 3.07 million bpd in July.

This is more than double the average of 1.37 million bpd of US crude that Asia imported in the three months to the end of February.

The ​United States and Israel attacked Iran on February 28 and Tehran retaliated by effectively closing the Strait of Hormuz, through which about 20 percent of ​global crude oil and refined products moved prior to the start of the conflict.

While some Middle Eastern exporters such as Saudi Arabia and the United Arab Emirates have managed to re-route some oil exports to ports outside the strait, at least 10 million bpd of supply remains unavailable ​as the Iran conflict drags on.

About 1.2 million bpd of crude reached Asia in May through the Strait of Hormuz as some vessels secured Iranian approval to transit, ​but this is down from the average of 13.54 million bpd in the three months ended February.

The scale of the loss of cargoes through the strait overwhelms the additional volumes Asia has secured from the United States, as well as from other exporters in the Americas and Africa.

Asia’s seaborne crude arrivals in May were 19.47 million bpd, up from 18.7 million bpd in April, ​which was the lowest in more than 10 years, according to Kpler data.

However, even May’s higher arrivals were still 22 percent down from the average of 24.82 million ​bpd for the three months to the end of February.

It’s this loss of more than 5 million bpd in supplies that will ultimately lead to tough choices for Asia’s refiners.

So far ‌they have managed to keep plants operating by a combination of using up commercial and in some cases strategic stockpiles, while also reducing processing rates.

But there are now questions being asked as to how much longer the world can continue to deplete inventories before refiners are forced to significantly cut back throughput amid crude shortages.

There is an emerging consensus among most analysts and oil executives that the clock is ticking louder.

It’s likely that the process won’t be spread evenly across the world, with some regions likely ​to be able to continue producing and ​refining oil at usual rates, but others struggling to secure supply.

Ultimately, if the Strait of Hormuz doesn’t reopen within the coming weeks and doesn’t remain open on a sustainable basis, it’s likely that prices for refined fuels will have to increase in order to force a reduction ​in demand.

Asia, which took about 80 percent of the usual volumes through the Strait of Hormuz, is the most exposed and ​it’s likely that less well-developed, fuel-importing countries such as Bangladesh, the Philippines and Pakistan will experience the pain soonest.

There are also likely to be increasing questions asked in the United States about the rapid depletion of inventories amid record crude and product exports.

US politicians from both major parties tend to focus heavily on domestic issues and it isn’t hard to see them increasingly opposing oil ​and fuel exports in the mistaken belief that this will somehow lower retail prices at home.

Nvidia CEO Jensen Huang said on Tuesday the company has enough supply to accommodate robust growth in central processing units (CPUs) and graphics processing units (GPUs) as it rides an AI boom.

The company, considered a barometer for the AI market's health as its semiconductors are used in virtually every major data centre in the world, acknowledged, however, that supply constraints remain a concern.

"We've secured supply for very robust growth of all of those systems," Huang said at an Nvidia press conference during the Computex week in Taipei.

"We have supply for very, very robust growth, but we're still supply constrained."

Huang was speaking a day after the $5 trillion chip company unveiled a new chip that brings AI capabilities directly to personal computers.

Nvidia's new chip, which will be launched in the autumn, would pit it against the likes of Advanced Micro Devices, Intel and Apple.

Huang said the RTX Spark PC chip is part of Nvidia's efforts with Microsoft to "reinvent the PC" for the AI era.

Born in Taiwan's southern city of Tainan, the Nvidia chief announced plans last week to invest around $150 billion a year in Taiwan, describing it as the epicentre of the AI revolution.

At the press conference on Tuesday, Huang said Taiwan is a strategic partner for the US because the island is investing in US manufacturing. The company plans to continue to invest in Taiwan and make the supply chain as resilient as possible.

"We are the largest purchaser of any company now for the ecosystem of Taiwan," he said.

Demand for Nvidia AI chips, or GPUs, has generated tens of billions of dollars of revenue and helped make the company the most valuable in the world.

Huang said the company's Vera data centre CPUs would be even more popular than its GPUs because of the CPUs' crucial role in crunching information.

Vera competes with data centre chips made by AMD and Intel.

"This (Vera CPU) is going to be our new major growth driver," Huang said during a presentation on Monday outlining Nvidia's latest AI products.

Oil prices trended lower on Tuesday following the previous session’s sharp gains as ​the market remained cautious about progress in US-Iran peace talks.

US President Donald Trump said on Monday talks with Iran were ‌ongoing, while Tasnim news agency reported earlier that Tehran had suspended indirect negotiations with Washington.

Brent crude futures lost 53 cents, or 0.56 percent, to $94.45 a barrel at 0649 GMT, while US West Texas Intermediate fell 56 cents, or 0.61 percent, to $91.60 a barrel.

Both benchmarks rose more than 5 percent in ​the previous session, having posted a monthly loss of more than 16 percent in May on hopes of a ​peace deal.

“While markets had hoped to move past the uncertainty amid prospects of a potential deal, nothing appears to have changed for oil as of this morning,” said Priyanka Sachdeva, senior market analyst at ​Phillip Nova.

In an interview with CNBC on Monday, Trump said he did not mind if the talks were over. But shortly ​after, he issued a social media post saying talks with Iran were continuing and told ABC News that he expected a deal to extend the ceasefire and reopen the Strait of Hormuz “over the next week”.

“The market is currently focused on whether there’s any concrete progress or setbacks ​in US-Iran negotiations, the tone and substance of statements from both sides (particularly Iran’s threats regarding the Strait of Hormuz), ​and actual physical tanker movements through the waterway,” said Tim Waterer, chief market analyst at KCM Trade.

The status of the US-Iran negotiations at ‌any given point will ultimately determine whether the current risk premium stays embedded in oil prices or starts to unwind, Waterer added.

Lebanon on Monday announced a partial ceasefire between Hezbollah and Israel, in what would amount to a limited de-escalation of a conflict that has inflamed the broader war with Iran.

Iran has effectively halted nearly all non-Iranian shipping into and out of the ​Gulf since the war began, ​choking off about a fifth of global oil and liquefied natural gas flows and driving prices up by 50 percent or more.

US President Donald Trump signed an order Monday to cut tariffs on agricultural equipment, the White House said, as farmers and manufacturers face pressure from surging costs over the Middle East war.

Trump's proclamation reduces the duty rate on machinery like harvesters, alongside certain other equipment, from 25% to 15%.

Foreign companies can also qualify for a 10% duty rate if their manufacturing equipment contains at least 85% US steel or aluminum, the White House added in a fact sheet.

The changes take effect on June 8 and last until December 31, 2027.

Farmers have raised concern over rising costs ahead of key midterm elections, and face a further squeeze from the Middle East war as diesel and fertilizer prices have surged.

US-Israeli strikes targeting Iran since the end of February sparked Tehran's retaliation that virtually blocked off the Strait of Hormuz.

The critical waterway normally sees about a fifth of the world's oil and gas supplies pass through it, and is also essential for the global fertilizer trade.

The blockage has also driven aluminum prices higher as it is a key passageway for deliveries from the Middle East.

"Recent circumstances have affected and are affecting domestic industries that use agricultural equipment, industrial equipment and machinery, and other related products," Trump's order on Monday noted.

It is the latest adjustment to Trump's steel and aluminum tariffs, after firms pushed back on onerous rules.

US tariffs on steel, aluminum and copper generally stand at 50%.

In April, Trump moved to lower tariffs on products deemed to contain substantial amounts of these metals to 25% -- targeting their full value rather than the amount of the metals they contain -- in a bid to simplify the system.

Besides agricultural equipment, Trump's latest order said the lower 15% rate would also apply to certain heating, ventilation and air conditioning systems that are mainly for residential use.

The Trump administration has proposed a new ​punitive tariff of 25% on many imports from Brazil, after deciding its practices were unfair on a range of issues from digital trade to ‌illegal deforestation, top trade official Jamieson Greer said late on Monday.

The measures, under the Section 301 trade statute, cover areas such as electronic payment services, preferential tariffs, intellectual property protection and ethanol market access as well, the Office of the United States Trade Representative said.

The proposed new tariff, subject to public consultation ahead of a July 15 deadline, would exclude some items, such as beef, coffee, rare earths, other metals, energy ​and aircraft parts.

The USTR said its unfair trade practices investigation into Brazil, started last year under Section 301 of the Trade Act of 1974, had found practices ​that "are unreasonable and burden or restrict US commerce," opening the door for a punitive tariff.

Greer, speaking on CNBC, called the Brazil action "quite ⁠nuanced" because of the broad exemptions. He said that the trade agency will release the findings of several more Section 301 unfair trade practices investigations in coming weeks, adding ​that substantial tariffs were needed to correct a "giant" US trade deficit.

Brazil's Foreign Ministry did not immediately respond to a request for comment.

Two Brazilian officials familiar with the matter said the ​justifications for a new US tariff ignored many of the arguments presented by Brasilia in recent months, suggesting the motives were political rather than technical.

Despite a White House visit last month by President Luiz Inacio Lula da Silva, bilateral relations have turned chilly.

US Secretary of State Marco Rubio designated Brazil's two biggest criminal gangs as terrorist organizations over objections from Brasilia, opening the door for more aggressive interventions in the ​country.

Days earlier, Lula's main rival in the October election, Senator Flavio Bolsonaro, had argued in favor of the terrorist label during a tour of Washington that included meetings with Rubio, ​Vice President JD Vance and President Donald Trump.

"I expressly asked President Trump not to tariff our companies," Bolsonaro wrote on X on Tuesday. "Tariffs are not the solution."

Tariff replacements

The USTR's proposed new tariff would ‌partially replace ⁠a tariff of 50% on many Brazilian goods imposed last year by Trump, with 40% as a punishment for Brazil's prosecution of the Brazilian senator's father, former President Jair Bolsonaro.

The US Supreme Court struck down those duties in February.

In a statement, Greer said he launched the Section 301 investigation to tackle "longstanding and pervasive US concerns with certain of Brazil's trade policies and practices."

Despite recent engagement with Brazilian President Inacio Lula da Silva and his cabinet, Greer said the United States and Brazil "continue to have substantial differences in resolving issues identified in ​this investigation."

6 July public hearing

The trade agency ​invited comment on the proposed tariffs through 1 July, with a public hearing set for 6 July. It faces a 15 July deadline for taking "responsive action" in the Section 301 investigation.

Trump used the same statute to impose sweeping tariffs on Chinese goods during his first term.

The USTR has several other open ​Section 301 investigations that are expected to lead to new duties.

Among these are one covering excess industrial capacity in China and 15 ​other trading partners, as ⁠well as one into enforcement of forced labor bans in 60 countries.

The agency opened a new investigation on Friday into Vietnam's intellectual property practices.

Regarding its Brazil findings, the USTR said the proposed new 25% tariff would not apply to Brazilian imports subject to national security-related tariffs under Section 232 of the Trade Expansion Act of 1962.

These include 50% duties on steel, aluminum and copper ⁠and 25% ​duties on finished products made from those metals, as well as a 25% duty on motor vehicles and ​auto parts.

The USTR said products exempted from the proposed 25% tariffs included many fruits and nuts, crude oil and petroleum products, pharmaceutical compounds, organic chemicals and fertilizers.

These are in addition to beef, coffee, rare earths, certain other ​metals and ores and Brazilian aircraft and aircraft parts.

India and Oman today (1 June) enforced a bilateral free trade accord which offers zero-duty access for 99.38% of India's exports to the Persian Gulf country, the Indian commerce ministry said.

All zero-duty concessions under the bilateral Comprehensive Economic Partnership Agreement (CEPA) come into effect immediately, providing certainty and competitiveness to Indian exporters, the ministry said in a statement.

Earlier, under the Most Favoured Nation regime, only 15.33% of India's exports entered Oman duty-free. With CEPA, Indian exporters gain substantial price competitiveness in Oman's nearly $28 billion import market.

Speaking on the occasion, Indian Commerce Minister Piyush Goyal said that with 99.38% of India's exports receiving duty-free access, the CEPA, signed in December last year, unlocks new opportunities for Indian exporters and professionals.

India, in turn, has offered tariff liberalisation on 77.79% of tariff lines covering 94.81% of imports from Oman by value, while maintaining strong safeguards for sensitive sectors.

Products including dairy products, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather, spices and key agricultural products have been kept out of CEPA in order to protect India's domestic industries, said the statement.

India is only the second country, after the United States, to secure a comprehensive bilateral trade pact with Oman.

The CEPA will strengthen India's dominance in fisheries, meat, eggs, marine products, and processed foods with duty elimination.

Oman offers a gateway to the Gulf Cooperation Council countries and East Africa and Oman's logistics hubs at Sohar, Duqm, and Salalah are expected to amplify India's regional trade connectivity.

To mark the entry into force, the first consignments availing preferential tariff benefits under the agreement, including agriculture and gems and jewellery exports from Mumbai, Kolkata, and Chennai, were flagged off.

Oman is India's second-largest trading partner in the Gulf region and serves as a strategic gateway to the wider GCC market through its advanced port infrastructure.

Bilateral trade between India and Oman reached $11.18 billion in FY2025-26, up from $10.61 billion in FY2024-25.

All marine products, including shrimp, fish, and cuttlefish, will get immediate duty-free access, replacing earlier import duties of up to 5%.

Oman's marine imports stood at $35.3 million in 2025, while India's exports accounted for only $10 million, indicating substantial untapped potential.

Import duties of up to 5% on gems and jewellery have been eliminated from day one.

Indian exporters gain a structural price advantage over competitors from Italy, Turkey, Thailand, and China.

Oman's total gems and jewellery import market is $1.07 billion annually. India's exports to Oman in this sector stood at $25.78 million in 2025, comprising $18.48 million in polished natural diamonds and $6.67 million in gold jewellery.

It is projected that exports could increase sixfold to $150 million within three years.

Clusters in Surat (diamonds), Jaipur (gemstones), Mumbai, Kolkata, and Chennai are positioned to capture this growth.

India is Oman's second-largest agricultural supplier with a 17.8% share in Omani imports. Duty elimination strengthens India's competitiveness in products such as honey, condiments, cashews, basmati rice, butter and sweet biscuits.

India currently accounts for over 94% of Oman's bovine meat imports and over 98% of fresh egg imports, making Oman one of India's most important agricultural export destinations in the Gulf region.

India and the United States are “about 99 percent” done with the first tranche of a trade deal, the commerce minister said, as a US delegation began talks in New Delhi on Tuesday.

The delegation, led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, is holding three days of talks with Indian trade officials, as the two sides seek to close negotiations.

“About 99 percent of the issues have been settled,” Indian commerce minister Piyush Goyal told reporters in Delhi late Monday.

The two countries reached an initial understanding for the trade deal in February, but negotiations slowed after President Donald Trump’s sweeping tariff measures were struck down by the US Supreme Court.

After the court order, the Trump administration launched investigations into unfair trade practices against several countries, including India, while imposing a blanket 10 percent tariff.

Goyal said negotiators were examining how recent legal changes in the United States should be reflected in the final text of the agreement.

“I am fully confident that we will conclude and sign the first tranche of the bilateral trade agreement with the United States,” Goyal said, adding that discussions would then continue on a broader and more comprehensive pact.

“Discussions are continuing on minor details, essentially the commas and full stops.”

Last week, US ambassador Sergio Gor said he expected the interim trade deal to be signed “in the next few weeks”.

Washington and New Delhi have set a target of boosting bilateral trade to $500 billion by 2030, holding multiple rounds of negotiations since March to resolve market access and tariff disputes.

India says the deal protects its sensitive dairy and agricultural products while opening a $30 trillion market for exporters.

Oil prices rose more than 3 percent on Monday after Iran and the US traded strikes and Israel ordered troops to move further into Lebanon in its battle with Tehran-backed Hezbollah.

Brent futures rose $2.93 or ​3.2 percent to $94.05 a barrel at 0906 GMT. US crude futures rose $3.36 or 3.9 percent to $90.72 a ​barrel. Over May, Brent and WTI lost around 19 percent and 17 percent, respectively.

The fighting in ⁠the Middle East, after Washington hosted Israel-Lebanon peace talks on Friday, dimmed hopes that the US ​and Iran could soon announce an extension to their ceasefire.

The US said on Sunday it conducted "self-defence strikes" ​while Iran's Islamic Revolutionary Guard Corps said on Monday its aerospace force targeted an air base used for US attacks.

US President Donald Trump said on Friday he would soon decide on a proposed deal to extend a ceasefire announced in early ​April.

Israel would be key to any such deal, and Iran has said repeatedly that Hezbollah must be ​included. The US has proposed a "gradual de-escalation" plan, a US official said on Sunday.

Concerns are rising about mines in the ‌Strait ⁠of Hormuz, a key oil and gas shipping lane, IG analyst Tony Sycamore said in a note. "Even if an agreement is reached, it won't deliver a flood of supply," Sycamore said.

An Axios reporter said on X on Friday that Iran had dropped more mines in the strait earlier in the week.

Iran's ​Foreign Ministry spokesperson Esmaeil ​Baghaei said on Monday ⁠the delay in the diplomatic process to end the war can be explained by a lack of trust, Washington's contradictory positions and Israel's attacks on Lebanon.

Concerns ​over supply outweighed weekend economic data from China which showed stalling factory activity. ​This added to ⁠concerns the world's second-largest economy is losing momentum.

Saudi Arabia is likely to cut its official selling prices (OSPs) for crude oil to Asia in July for a second month, a Reuters survey showed.

Goldman Sachs said on Sunday weak ⁠oil demand ​in China and Europe poses a major downside risk to ​its fourth-quarter Brent crude forecast of $90 a barrel and WTI forecast of $83, although Middle East supply disruptions could still push prices ​higher.

The economic shock from ​the Iran war hit European factories last month, suppressing demand for their goods and pushing up raw ‌material costs at the fastest rate in four years, although their Asian peers saw activity expand due to stockpiling, surveys showed on Monday.

The US-Israeli conflict with Iran, which began in late February, has upended trade, rattled financial markets and raised concerns over global energy supplies, particularly through the ​Strait of Hormuz, a key route for oil and gas shipments.

Monday’s surveys came after the heads of the International ​Energy Agency, International Monetary Fund, World Bank and World Trade Organization warned the war was straining global energy supplies.

S&P Global’s Eurozone Manufacturing PMI fell to 51.6 in May from April’s near four-year high of 52.2, but ahead of ​a preliminary estimate of 51.4.

A reading above 50.0 indicates growth.

“Although euro area manufacturers reported an expansion for a fourth successive month ​in May, the sector is showing signs of struggling under the weight of rising prices and supply disruptions emanating from the war in the Middle East,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

In Germany, Europe’s largest economy, the manufacturing sector stalled while French factories saw a contraction for the first time since November.

The European Central Bank will hike its deposit rate this month and at least once more ​this year to try to stop higher energy prices feeding into core inflation, according to a majority of economists polled by Reuters in ‌May.

Official data due on Tuesday is expected to show inflation rose further above the ECB’s 2 percent target last month. British factories raised their prices at the fastest rate since June 2022 last month in response to a big increase in costs.

ASIAN BUFFERS

Still, factory activity expanded in most Asian economies.

China’s private sector gauge grew for a sixth straight month and South Korea’s hit the fastest pace in ​five years, highlighting a region-wide push ​to build buffers against potential conflict-led disruptions.

And the S&P 500 and Nasdaq each ticking up about two-tenths of a percent.

The RatingDog China General Manufacturing PMI, compiled by S&P Global, fell to 51.8 in May from 52.2 in April, but was slightly better than analysts’ forecast of 51.6.

That outcome contrasted ​with an official survey showing factory activity in the world’s second-largest economy stalled last month as ​new orders contracted and input costs kept rising.

Japan’s factory activity also expanded with the PMI at 54.5 in May, slowing from April’s more than four-year high of 55.1, though firms there reported the sharpest rise in input costs since September 2022 due to higher raw material prices.

South Korea’s PMI ​rose to its highest since March 2021 at 54.8 in May, up ​from 53.6, again underlining firms’ drive to lock in supplies.

In Vietnam, the factory PMI gauge rose to 52.8 from 50.5, while Taiwan’s rose to 56.1 from 55.3, ​surveys showed. The index for the Philippines jumped to 50.8 from 48.3.