Insight with Haslinda Amin 7/7/2025

Former President Trump's threat of a 10% tariff on nations aligned with BRICS signals potential significant shifts in global trade policy. Concurrently, Lombard Odier's Woods notes that oil prices are increasingly reflecting fundamental supply and demand dynamics, indicating a potential shift in crude market drivers. Separately, the Thai Bourse is actively pursuing measures to enhance market liquidity, aiming to improve efficiency and attract investment.

Analysis

The current market landscape is shaped by three distinct but significant developments, contributing to a cautious tone and a mildly negative sentiment. A potential major shift in global trade policy looms with a threat from former President Trump to impose a 10% tariff on all nations aligned with the BRICS bloc, a move that would introduce considerable uncertainty and potential disruption to international supply chains. Concurrently, the energy market is showing signs of normalization, as noted by Lombard Odier's Woods, with oil prices now aligning more closely with fundamental supply and demand dynamics rather than being driven primarily by speculative or geopolitical factors. In emerging markets, the Thai Bourse is proactively taking steps to enhance its market liquidity, an initiative aimed at improving trading efficiency and attracting greater investment capital, which could be a positive catalyst for that specific market.

Key Decisions for Investors

• Investors should immediately assess portfolio exposure to companies reliant on supply chains or revenue from BRICS-aligned nations due to the significant risk posed by a potential 10% tariff.
• In the energy sector, fundamental analysis of supply and demand data should be prioritized over geopolitical noise, as oil prices are reportedly becoming more tethered to these core metrics.
• For those with an emerging markets focus, the Thai Bourse's efforts to improve liquidity warrant monitoring, as this could signal a favorable entry point or improved conditions for existing holdings in Thai equities.