Akintunde Oyedokun
Research Analyst
Oil prices dropped over 1% on Thursday after early gains faded. Investors reacted to a U.S. court ruling that blocked key Trump-era tariffs, but the market later cooled as officials downplayed the ruling’s impact. Brent crude settled at $64.15, while WTI closed at $60.94. Weak oil demand in China and ongoing geopolitical uncertainties in Russia and Iran also pressured prices. OPEC+ output decisions and potential U.S. sanctions on Russian crude remain in focus.
South Korea Cuts Interest Rate Again To Boost Weak Economy
South Korea’s central bank cut interest rates to 2.50% on Thursday to help the slowing economy. This is the fourth rate cut in its current effort to support growth, which has been hurt by U.S. tariffs and weak exports.
The Bank of Korea also lowered its 2024 growth forecast to 0.8%. Governor Rhee Chang-yong said more rate cuts may come, as inflation is near target and demand is weak.
The decision comes just before a presidential election. Both main candidates support more government spending to help the economy recover. Analysts expect interest rates could fall to 2.00% by the end of the year.
China’s Factory Activity Likely Contracts Again As Trade Tensions Persist
China’s factory activity likely shrank for a second month in May, with a Reuters poll forecasting a PMI of 49.5, still below the 50 mark that signals growth. Ongoing trade tensions with the U.S. and EU are straining manufacturers, as Beijing faces U.S. tariffs up to 145% and fresh EU probes into Chinese exports. Analysts expect more stimulus from Beijing to support growth, even as the economy remains under pressure from weak domestic demand and a property slump. The official PMI is due Saturday; a private Caixin survey follows on June 3.
Kenya’s Inflation Eases To 3.8% In May, Stays Within Target Range
Kenya’s annual inflation dropped to 3.8% in May from 4.1% in April, according to the national statistics office. Monthly inflation rose slightly to 0.5% from 0.3%. Food and non-alcoholic beverage prices increased by 6.3% year-on-year, while transport costs rose 2.3%. Inflation remains within the central bank’s 2.5%–7.5% target. The next interest rate decision is expected on June 10, following April’s surprise rate cut to 10%.
Nigerian President Defends Economic Reforms Marks Midterm, Despite Ongoing Hardship, Security Concerns
As President Bola Tinubu marks his second year in office, he defended his economic reforms, including the removal of fuel and electricity subsidies and currency devaluation, saying they are essential to avoiding a financial crisis. While these measures have helped reduce the budget deficit, they have also led to soaring inflation, still above 23%, and worsening living conditions. The World Bank acknowledged improvements in Nigeria’s fiscal position but warned that inflation remains a major issue, while Tinubu’s claims of improved security contrast with ongoing attacks and over 10,000 deaths since he took office.
Despite the challenges, Tinubu’s party has backed him for a second term in the 2027 election.
