Seven key producers—including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman —will collectively increase output by 188,000 barrels per day, marking the fifth consecutive monthly increase.

The decision reflects growing confidence that oil supply disruptions caused by the recent Iran–Israel conflict are easing as shipping through the Strait of Hormuz gradually resumes. Consequently, Brent crude has retreated to around US$72 per barrel, compared with peaks above $120 during the conflict.

What does this mean?

✅ Supply is recovering: OPEC+ is signalling that the market can absorb higher production as export routes reopen.

✅ Oil prices remain anchored: The return of Brent to pre-war levels suggests that supply concerns have eased, reducing immediate inflationary pressure on energy-importing economies.

✅ Geopolitical risks remain: Although tanker traffic has resumed, Western navies continue to describe the security threat in the Strait of Hormuz as substantial. Any renewed disruption could quickly reverse the recent decline in oil prices.

Why it matters for BangladeshFor Bangladesh, softer oil prices could ease the import bill, reduce pressure on foreign exchange reserves, improve the current account balance, and help contain domestic inflation. However, policymakers should remain cautious, as geopolitical tensions in the Gulf continue to pose significant upside risks to global energy prices.

Bangladesh spent nearly $7.5 billion on petroleum imports in the first nine months of FY2025–26, with the annual import bill likely to reach around US$10 billion by the end of the fiscal year.

Bottom line: OPEC+ is shifting its focus from crisis management to supply normalization. Yet, with geopolitical uncertainty still lingering, the global oil market is likely to remain highly sensitive to developments in the Middle East.

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📈 Key developments:
• Headline inflation rose to 3.2% in May, exceeding the 3% mark for the first time since September 2023.
• Energy prices surged 10.9% year-on-year, remaining the primary driver of inflationary pressure.
• Core inflation, which excludes volatile food and energy prices, climbed to 2.5%, surpassing market expectations of 2.4%.
• Financial markets are now pricing in a 95% probability that the European Central Bank (ECB) will raise interest rates by 25 basis points at its upcoming meeting.

Why does it matter?

The return of inflation above 3% complicates the ECB’s policy path. While economic growth across the Eurozone remains fragile, the resurgence of both headline and core inflation indicates that underlying price pressures have not been fully contained.

At the same time, EU policymakers are reportedly considering allowing member states additional budget flexibility equivalent to around 0.3% of GDP for energy-related expenditures. While such measures may help households and businesses cope with elevated energy costs, they could also add fiscal stimulus at a time when monetary policy is attempting to cool inflation.

Takeaway:

The ECB faces a delicate balancing act. Persistent inflation argues for tighter monetary policy, but higher borrowing costs risk further slowing economic activity. The combination of renewed energy-price pressure and potential fiscal support measures may keep inflation elevated for longer than markets previously anticipated.

For emerging economies, including Bangladesh, a prolonged period of higher European interest rates could influence global capital flows, borrowing costs, exchange-rate dynamics, and export demand.

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Dhaka, Bangladesh (BBN) - Global financial markets once again demonstrated their remarkable ability to separate geopolitical uncertainty from long-term growth narratives.

Despite escalating tensions in the Middle East and a sharp rise in oil prices, Wall Street pushed higher as investors remained focused on the transformative potential of artificial intelligence and technology-driven productivity gains, according to media reports.

📈 US Markets

• S&P 500 gained 0.26% to 7,599.96
• Nasdaq advanced 0.42%
• Dow Jones added 0.09%

The rally was largely powered by AI-related developments. Nvidia's unveiling of its RTX Spark PC chip reinforced investor confidence in the next phase of AI adoption beyond data centers and into personal computing. ServiceNow (+9.25%) and IBM (+7.52%) emerged as major beneficiaries of the AI optimism.

However, Nvidia’s expansion into the PC market also created clear winners and losers. Qualcomm (-8.78%) and Intel (-5.35%) came under pressure as investors reassessed competitive dynamics in the semiconductor industry.

Another notable milestone came from Micron, whose shares surged 6.56%, pushing its market value above the USD 1 trillion mark for the first time, highlighting the growing strategic importance of memory technologies in the AI era.

🛢️ Energy and Fixed Income
Brent crude jumped 4.2% to USD 94.98 per barrel after briefly exceeding USD 97 amid concerns that Iran could suspend ceasefire negotiations. Rising energy prices contributed to higher Treasury yields, with the US 10-year yield climbing to 4.47%.

🏢 Corporate Activity
M&A activity remained robust. Berkshire Hathaway’s USD 6.8 billion acquisition of Taylor Morrison signals that CEO Greg Abel is willing to deploy capital aggressively as he begins his post-Warren Buffett leadership era. Meanwhile, Barry Diller’s People Inc proposed acquiring the remaining stake in MGM Resorts, underscoring continued consolidation trends across industries.

🌏 Asia’s AI Ambition
In Asia, SoftBank became Japan’s most valuable listed company after announcing plans to invest up to EUR 75 billion in AI data centres in France. The scale of the investment highlights how the global AI race is increasingly becoming an infrastructure race, with capital flowing into computing power, energy capacity, and data centre ecosystems.

🔎 Key Takeaway
Markets are sending a clear message: while geopolitical risks can influence short-term sentiment and commodity prices, investors continue to prioritize structural growth themes. Artificial intelligence, digital infrastructure, and strategic capital deployment remain the dominant forces shaping global asset prices and corporate valuations.

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Key concerns highlighted by Fitch include:

* Heavy dependence on Middle East remittances and energy imports, exposing Bangladesh to geopolitical shocks

* Persistently weak governance, banking sector fragility, and slow reform progress

* Declining private-sector credit growth and rising non-performing loans, especially in state-owned banks

* Low revenue mobilisation and widening fiscal deficits

* Continued inflationary pressures alongside slowing economic growth

Despite moderate public debt and continued access to concessional external financing, Fitch warned that uncertainty over reforms and external shocks could further pressure foreign exchange reserves, the currency, and overall macroeconomic stability.

The outlook revision signals growing international concern over Bangladesh’s economic resilience at a time when investor confidence and external sector stability remain under strain.

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According to the US Bureau of Labor Statistics, CPI rose 0.6% in April after a 0.9% jump in March, with energy accounting for over 40% of the monthly increase. Petrol prices alone climbed 28.4% year-on-year, while food inflation also accelerated at its fastest pace in nearly four years, according to media reports.

The implications extend far beyond the US economy. Markets have largely ruled out Federal Reserve rate cuts for 2026, while expectations of another rate hike are gaining traction. This signals a prolonged high-interest-rate environment globally.

For emerging economies like Bangladesh, the impact could be significant:

• Higher global oil prices may intensify imported inflation and widen trade deficits.

• A stronger US dollar and elevated interest rates could increase external borrowing costs and put renewed pressure on foreign exchange reserves.

• Rising shipping and commodity costs may further raise domestic production and transportation expenses.

• Global demand uncertainty could also affect export-oriented economies, particularly the apparel sector.

The latest US inflation data suggest that geopolitical risks are once again becoming a central driver of the global economic outlook — complicating monetary policy, trade flows and growth prospects across both advanced and developing economies.

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US Treasury Secretary Scott Bessent told a Senate committee that several US allies in the Gulf and Asia have requested dollar liquidity support through currency swap line arrangements. These mechanisms are designed to stabilise dollar funding markets and prevent disorderly sell-offs of US assets.

A proposed swap line with the United Arab Emirates is expected to benefit both economies, he noted—echoing remarks by Donald Trump, who recently confirmed such an arrangement is under consideration, according to media reports.

Why this matters:

* Ensuring dollar liquidity has become critical amid rising global uncertainty.

* Energy disruptions—especially around the Strait of Hormuz—are intensifying financial stress.

* Temporary US sanctions relief on Russian and Iranian oil has helped ease supply pressures.

Bessent added that these measures have effectively released around 250 million barrels of oil into the market. Without them, benchmark prices could have surged to $150 per barrel.

Big picture:

Dollar swap lines are reasserting their role as a key crisis-management tool—much like during the 2008 financial crisis—offering not just liquidity support, but also a buffer against geopolitical shocks in an increasingly fragile global economy.

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“ADB will deliver rapid, flexible, and scalable assistance to help countries manage immediate pressures and strengthen long-term resilience,” ADB President Masato Kanda said in a statement.

The support will include fast-disbursing budget assistance and trade and supply-chain financing to secure imports of essential goods, including oil, he added.

The Manila-based lender said it has sufficient resources to safeguard existing and planned operations while expanding emergency support in line with DMC needs, including through its countercyclical lending buffer. The bank is closely monitoring global market developments, particularly energy price volatility, inflationary pressures, and external account risks across Asia and the Pacific.

ADB’s latest analysis shows that disruptions to key shipping routes have already raised transport costs and delivery times. Supply risks extend beyond energy to critical industrial inputs such as petrochemicals and fertilisers, posing potential challenges for agriculture and food production. Economies dependent on tourism and remittances are also facing heightened vulnerabilities, while tighter financial conditions are putting pressure on currencies and capital flows.

In response, ADB said it stands ready to provide timely financial and technical support to help countries manage risks, maintain macroeconomic stability, and protect vulnerable populations.

The support package has two main components. The first is fast-disbursing budget support for countries facing fiscal pressures, including the use of the bank’s Countercyclical Support Facility to help governments stabilise their economies and cushion the impact on livelihoods.

The second component is ADB’s Trade and Supply Chain Finance Program (TSCFP), which supports the private sector to ensure continued flow of critical imports, including energy and food. The bank has decided to reactivate support for oil imports under the programme on an exceptional and temporary basis, citing the sharp rise in oil prices and supply chain disruptions.

ADB said it has begun discussions with severely affected DMCs on possible immediate support and will continue working with governments, development partners and the private sector to ensure coordinated responses aimed at maintaining economic stability and protecting vulnerable groups.

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The anticipated drop in output reflects lower cotton prices, shifting planting intentions in major producing countries, and weaker demand — particularly from China. With production currently exceeding consumption in 2025/26, the projected decline next season is expected to bring global supply and demand closer to equilibrium.

China is set to retain its position as the world’s largest producer and consumer of cotton, although its usage is forecast to ease slightly as manmade fibres continue to gain market share.

India, Brazil and the United States will remain pivotal suppliers to the global market, while Bangladesh and Vietnam are expected to sustain strong import demand.

World cotton lint trade is forecast at 9.6 million tonnes in 2026/27. Brazil is projected to remain the leading exporter, followed by the United States.

Meanwhile, evolving trade policy developments — including new US tariff measures and updated trade agreements involving Bangladesh, India and the European Union — are adding fresh uncertainty to the global cotton outlook. The ultimate impact will depend on how these measures are implemented and how markets respond.

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Services trade is also expected to cool, with exports projected to rise 4.6% in 2025 and 4.4% in 2026, compared with 6.8% in 2024.

“Trade growth will likely slow in 2026 as the impact of the cooling global economy and new tariffs set in,” the WTO warned in its latest update of "Global Trade Outlook and Statistics".

Still, the trade body noted that AI-driven demand helped buoy global flows in 2025. Exports of semiconductors, servers, and telecommunications equipment surged 20% year-on-year in value terms in the first half of the year, accounting for nearly half of global merchandise trade expansion.

Overall, world merchandise trade volumes rose 4.9% year-on-year in the first half of 2025, while trade values in US dollar terms increased 6%, following a 2% rise in 2024.

The WTO projects global GDP growth at 2.7% in 2025 and 2.6% in 2026. While the 2025 outlook was revised upward from earlier estimates, the 2026 downgrade offsets much of the gain, with tariff impacts expected to weigh more heavily in the later year. An early inventory buildup of durable goods in 2025 is unlikely to be fully unwound in 2026, further dampening demand.

By region, Asia and Africa are expected to lead export growth in 2025, alongside modest gains in South and Central America, the Caribbean, and the Middle East. Europe will likely see slower growth, while North America and the Commonwealth of Independent States (CIS) are projected to post declining exports. Least-developed countries (LDCs) are forecast to record solid export gains but may face weakening momentum ahead.

On the import side, Africa and LDCs are set to register the fastest growth in 2025, while North America is expected to see a contraction. In 2026, only North America, Europe, and the CIS are forecast to improve their export performance, while imports are projected to weaken across all regions.

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Global stocks are expected to decline 3.8% to 15.37 million tonnes, led by a sharp drawdown in China, according to the International Cotton Advisory Committee (ICAC) latest report, released on Wednesday.

China’s 2024/25 ending stocks fell 9% to 7.89 million tonnes, a reduction that also drove a 65% plunge in imports to 1.1 million tonnes.

For 2025/26, China has maintained its quota policy, allowing 200,000 tonnes of sliding tariff rate cotton imports for textile enterprises.

Outside China, stocks increased by 2.0% in 2024/25, with the United States reporting the largest gain — ending the season with a 9.0% rise to 817,000 tonnes. Brazil and West Africa also posted higher stock levels during the same period.

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