# Oil Advances as Iran Deal Eludes, Eco Week Ahead

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 10 Aug 2026, 15 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/08f98d41-4e71-4bdb-a8a4-b4a200228395/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Oil extended its recent gains as Iran rejected talks with the US and a deal to reopen the vital Strait of Hormuz remained elusive. Treasuries declined. Meanwhile, a gauge of Asian stocks rose 0.4%, with gains for South Korean and Japanese chipmakers. The Kospi Index climbed as much as 2% before trimming its advance, with SK Hynix Inc. and Samsung Electronics Co. among the winners. The move followed Friday's Wall Street rally after soft US jobs data lifted equities, sending the S&P 500 Index to a record high. Bloomberg's Haidi Stroud-Watts spoke to Jasmine Duan, Senior Investment Strategist at RBC Wealth Management Asia. And prices paid by US consumers probably inched up marginally last month after falling for the first time in six years, a welcome tempering in recent war-driven inflationary pressures. The closely watched consumer price index is seen rising 0.1% in July following a 0.4% decline in the prior month, based on the median projection in a Bloomberg survey of economists ahead of Wednesday's Bureau of Labor Statistics release. In the wake of Friday's weak July jobs report, the moderation in price growth may help alleviate some of the inflation anxiety at the Federal Reserve after three officials dissented on July 29 in favor of raising interest rates. Bloomberg's Haidi Stroud-Watts spoke to Illiana Jain, International Economist at Westpac. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
[0:10] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Dan Schwartzman. Doug
[0:14] Speaker 2: Risner has a day off. Oil is extending gains. That
[0:17] Speaker 2: is after Ron says an agreement with Omon establishing a
[0:19] Speaker 2: shipping route through the Strait of Hormuz was quote very close,
[0:22] Speaker 2: but remain short of a final deal. However, Iron has
[0:25] Speaker 2: ruled out direct talks with the US for now, sit
[0:27] Speaker 2: in US violations of a short lived interim peace agreement. Meantime,
[0:31] Speaker 2: in the States, on Friday, employers unexpectedly cut jobs in
[0:34] Speaker 2: July and hirings in the prior two months was revised lower.
[0:38] Speaker 2: This suggests the labor market is weaker than previously thought.
[0:41] Speaker 2: The report may prompt the Federal Reserve to delay interest
[0:44] Speaker 2: rate increases as officials weigh inflation against risks to employment.
[0:48] Speaker 2: For more on the Federate outlook, Bloomberg's Heidi Stroud Watts
[0:51] Speaker 2: spoke to Jasmine Douon, senior investment strategist at RBC Wealth
[0:55] Speaker 2: Management Asia.
[0:56] Speaker 3: What's the up top of mind for you at the moment.
[0:58] Speaker 1: There is quite a bit of conversation as to whether
[1:01] Speaker 1: these FED expectations have really shifted going into the end
[1:04] Speaker 1: of the year.
[1:08] Speaker 4: Well, we think right now, what's causing the rates the
[1:13] Speaker 4: use volatility is really the FAT communications strategy. In the past,
[1:18] Speaker 4: the FAT communicates to the market very clearly, but now
[1:22] Speaker 4: under the new fectuer, he wants the market to figure
[1:25] Speaker 4: out things themselves. And in this past Fat meeting, investors
[1:31] Speaker 4: expected the FAT to act, but they didn't act, so
[1:34] Speaker 4: that kind of caused some confusions to the market as well.
[1:37] Speaker 4: And this talked tough but without action approach, we'll only
[1:41] Speaker 4: act in the short term.
[1:43] Speaker 3: And we think that central.
[1:44] Speaker 4: Banks needs credibility, and credibility comes from backing words with actions,
[1:50] Speaker 4: So we think WASH will take the opportunity of Jackson
[1:53] Speaker 4: Holle to clarify his approach, and until we hear from him,
[1:57] Speaker 4: we expect yous to remain elevated and volatility to persist.
[2:02] Speaker 4: And we think the FAT is likely to have the
[2:05] Speaker 4: rates on hold until end of the next year. But
[2:08] Speaker 4: biggeries comes from inflation if it picks up again in
[2:12] Speaker 4: the fall or oil price goes up again, and that
[2:15] Speaker 4: will push the FAT into action.
[2:20] Speaker 1: In the meantime, you remain overweight US equity. It has
[2:23] Speaker 1: a recent relatility when it comes to questions over AI
[2:26] Speaker 1: spend change that at all, what are you focusing on?
[2:32] Speaker 4: Well, for us, we remain constructive on the AI story
[2:36] Speaker 4: on the text sector as long as the earnings can deliver,
[2:40] Speaker 4: and we think if earnings can continue to hold, there
[2:43] Speaker 4: is a room for the market to continue to go higher.
[2:46] Speaker 4: But we do acknowledge that the AI narrative is getting
[2:50] Speaker 4: more compacts right now. So first of all, the AI
[2:55] Speaker 4: is powering the whole data center build out and broader
[2:59] Speaker 4: economic growth. But most of the company are still saying
[3:03] Speaker 4: they see potential for earnings to grow using AI, but
[3:08] Speaker 4: there is no actual provement of their productivity or their
[3:12] Speaker 4: earnings profitability improvement. So we see this gap between the
[3:17] Speaker 4: hype and result widening. And also we see an inflection
[3:23] Speaker 4: point for the Hyperscaler's capex. For this year, the growth
[3:27] Speaker 4: is expected to be seventy percent year on year and
[3:31] Speaker 4: for next year the growth will be thirty percent. It
[3:33] Speaker 4: is still a very big number, but the growth rate
[3:36] Speaker 4: is slowing down and for equity investors they look at
[3:40] Speaker 4: the growth rate instead.
[3:41] Speaker 3: Of the absolute level.
[3:43] Speaker 4: And therefore we think we are reaching an inflection point.
[3:47] Speaker 4: And now with the cheap AI models coming to the market,
[3:50] Speaker 4: that could also extend ouri timeline for the hyper scalers.
[3:54] Speaker 4: So we are constructed on the tech sector, but we
[3:58] Speaker 4: are aware the narrative is getting more more and more complex.
[4:04] Speaker 1: Part of the challenge, of course, well, the real challenge
[4:06] Speaker 1: is coming from China. So do you have any interest
[4:09] Speaker 1: in any of the II names or even the pixel
[4:12] Speaker 1: shovels names from the Chinese market.
[4:17] Speaker 4: We do see that it's very interesting we are hearing
[4:20] Speaker 4: this latest news for the cheap AI models coming into
[4:23] Speaker 4: the market and getting more and more and more competitive
[4:28] Speaker 4: to their US peers, and that could provide some opportunities
[4:31] Speaker 4: because the AI peers, the China peers did look more
[4:35] Speaker 4: attractive in terms of valuation and their growth are looking
[4:40] Speaker 4: also attractive. And therefore we think at this moment of time,
[4:44] Speaker 4: the AI China AI space to present some opportunity. But
[4:48] Speaker 4: what's more important to watch is the upcoming second quarter
[4:51] Speaker 4: earning season. So for some of the big tech companies,
[4:55] Speaker 4: their revenue may continue to grow or remain stable, but
[4:58] Speaker 4: for their bottom line beca of the increased investment in AI,
[5:02] Speaker 4: their profitability may be affected. So it really depends on
[5:07] Speaker 4: how the company management is going to explain this and how.
[5:10] Speaker 3: Investors will look at this.
[5:14] Speaker 4: Increased investment in AI, so maybe they are happy that
[5:18] Speaker 4: there is an increasing investment, there are future profitability growth,
[5:22] Speaker 4: but some investors may also be concerned about the short
[5:25] Speaker 4: term earnings being affected. So it's really important for us
[5:31] Speaker 4: to look at the upcoming second quarter earning season with.
[5:35] Speaker 1: No resolution inside of the moment between the US and Iran.
[5:38] Speaker 1: Do you see opportunities in the energy sector.
[5:43] Speaker 4: Yes, we do so right now for the US and
[5:46] Speaker 4: Iran situation. For US, we remain skeptical that real peace
[5:51] Speaker 4: or stable oil market will come back anytime soon. And
[5:55] Speaker 4: we think for both US and Iran they are just pausing,
[5:58] Speaker 4: not peacing. And if we look at the nuclear stand
[6:02] Speaker 4: of that started the war five months ago, it hasn't
[6:05] Speaker 4: been resolved, and we think both sides will have incentive
[6:09] Speaker 4: to fight again. And also for the shipping market, with
[6:13] Speaker 4: the ongoing threads of tolls and drones and missiles, a
[6:18] Speaker 4: large portion of the ship market will.
[6:20] Speaker 3: Remain on the side lines.
[6:22] Speaker 4: And now the US strategic strategic petroleum reserve is at
[6:27] Speaker 4: this lowest level since nineteen eighty three. It's just slightly
[6:31] Speaker 4: about three hundred million barrel and that means the buffer
[6:36] Speaker 4: is really think and the wood is hard to sustain
[6:39] Speaker 4: another supply shock, and therefore we think for investors it's
[6:45] Speaker 4: really good to have some energy stocks in your portfolio
[6:48] Speaker 4: to diversify the risk as we expect this supply constraint
[6:53] Speaker 4: to remain.
[6:54] Speaker 2: That was Jasmin Duon, senior investment strategist at RBC Wealth
[6:57] Speaker 2: Management Asia, speaking of Bloomberg TV host Heidi Shroud Watts,
[7:01] Speaker 2: and we're bringing their conversation to you here on the
[7:03] Speaker 2: Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.
[7:15] Speaker 2: I'm Dan Schwartzman. Doug Risner has a day off Asian
[7:18] Speaker 2: stocks rose on Monday after soft US job's data sent
[7:21] Speaker 2: Wall Street gages higher on Friday, where the S and
[7:23] Speaker 2: P five hundred index closing at a record high. Meantime,
[7:26] Speaker 2: in the week ahead, traders will be looking at upcoming
[7:29] Speaker 2: reports on consumer prices that are likely to decide the
[7:32] Speaker 2: Fed's course of action. For more, we had the chance
[7:35] Speaker 2: to speak to Leana Jane, international economist at Westpac. She
[7:38] Speaker 2: spoke to Bloomberg's Heidie shroud Watts.
[7:40] Speaker 1: All your takes away, because clearly that has caused a
[7:44] Speaker 1: rethink when it comes to where the FED can go
[7:45] Speaker 1: from here.
[7:46] Speaker 5: Yeah, certainly, Look, the job's numbers really confirmed what we
[7:50] Speaker 5: had been talking about for quite some time that the
[7:53] Speaker 5: headline numbers were really masking a week economy under the surface.
[7:58] Speaker 5: So we saw a decline non farm pay rolls. But
[8:01] Speaker 5: I think the one thing to focus on is the
[8:03] Speaker 5: unemployment rate in the participation rate. We've seen the participation
[8:07] Speaker 5: rate fall for the most part since twenty twenty three,
[8:11] Speaker 5: and that's meant that that's really flattered the unemployment rate
[8:15] Speaker 5: to be lower. But if we hold the participation rate
[8:18] Speaker 5: at where it was roughly and around twenty twenty three,
[8:22] Speaker 5: which again is lower than where it was prior to
[8:24] Speaker 5: the pandemic, we would have an unemployment rate closer to
[8:27] Speaker 5: five percent, and that certainly speaks to a labor market
[8:31] Speaker 5: and economy that has a bit of slack in it.
[8:34] Speaker 5: So overall, we do think we took that read to
[8:37] Speaker 5: be a confirmation of what we think that the underlying
[8:39] Speaker 5: labor market is actually quite weak, and we do expect
[8:43] Speaker 5: that the FED will remain on hold for the foreseeble
[8:45] Speaker 5: future due to that.
[8:47] Speaker 1: So it makes this week's inflation read it ever more interesting.
[8:50] Speaker 1: Are you surprised that we haven't perhaps seen as much
[8:53] Speaker 1: pass through from the Middle East oil crisis for the US.
[8:57] Speaker 5: I think it has been a little bit surprising, but
[9:00] Speaker 5: this pass through has.
[9:01] Speaker 3: Still definitely been there.
[9:02] Speaker 5: I mean, if you see the last couple inflation prints,
[9:05] Speaker 5: they have been on the stronger side, even though we
[9:07] Speaker 5: have seen a bit of easing in the services side,
[9:10] Speaker 5: and that strength in inflation is probably what's going to
[9:14] Speaker 5: keep the FED on hold and not necessarily cutting rates.
[9:18] Speaker 5: As for the CPI data we're getting this week, we
[9:22] Speaker 5: do anticipate it's going to show the impacts of that
[9:25] Speaker 5: re escalation intentions, but we don't anticipate that a lot
[9:30] Speaker 5: of the discretionary categories, things like recreational services, are.
[9:34] Speaker 3: Going to see much renewed strength.
[9:36] Speaker 5: So while we do see the headline number, there is
[9:38] Speaker 5: a bit of risk that it comes in a bit
[9:40] Speaker 5: stronger than what markets are expecting. We don't think the
[9:42] Speaker 5: underlying will point to renewed inflationary pressures.
[9:46] Speaker 1: But the RBA this week, the consensus, at least hero Bleinbergers,
[9:50] Speaker 1: is for a hawkish hold. The stubbornness of the inflation readings, well,
[9:54] Speaker 1: I guess the slowness of how the disinflation effort is
[9:58] Speaker 1: coming through. Is that balance with factors like the fact
[10:03] Speaker 1: that we're seeing a really big slowdown in the property market.
[10:06] Speaker 5: Yeah. Sure, So I'll start with inflation first. So you're
[10:10] Speaker 5: right in that we've seen inflation be quite persistent. But
[10:14] Speaker 5: I think it's worth noting that inflation, while it has
[10:17] Speaker 5: been persistent, it hasn't reflected a strong transmission of the higher.
[10:21] Speaker 3: Costs a lot of businesses are facing. And in contrast to.
[10:25] Speaker 5: The US, I think that's a very good news story
[10:26] Speaker 5: for the RBA, and that's something that has led us
[10:30] Speaker 5: for led us to change our call to for the
[10:33] Speaker 5: RBA to remain on hold for this year and into
[10:37] Speaker 5: the first part of the next year as well. And
[10:40] Speaker 5: so well we can say, well, inflation's been quite persistent.
[10:43] Speaker 5: I think I like to see that number is a
[10:45] Speaker 5: good thing because it hasn't actually passed through a lot
[10:48] Speaker 5: of the costs. In terms of the housing market, we
[10:50] Speaker 5: are expecting a sharper slow down than we were previously.
[10:54] Speaker 5: The combination of higher rates as well as this tax
[10:58] Speaker 5: changes we saw this year have led to a much
[11:01] Speaker 5: sharper contraction in house prices, particularly in capital cities like
[11:05] Speaker 5: Melbourne and Sydney, and so for overall, we do explic
[11:09] Speaker 5: decline in house prices for twenty twenty six in Australia,
[11:12] Speaker 5: but a lot of that's going to be driven by
[11:14] Speaker 5: the capital cities like Melbourne and Sydney.
[11:16] Speaker 1: Have you started to see that feed through when it
[11:18] Speaker 1: comes to consumption or sentiment data?
[11:21] Speaker 5: Yeah, Sadly, sentiment has been incredibly weak and consumption well,
[11:25] Speaker 5: the most recent househill indicator suggests that it's been pretty strong.
[11:29] Speaker 3: The underlying pace has been quite weak.
[11:32] Speaker 5: We look at internal data here at Westpac, we look
[11:34] Speaker 5: at customer data that reflects both as spending and saving side,
[11:37] Speaker 5: and we saw that spending actually did slow down. It
[11:41] Speaker 5: was boosted by a lot of airline refunds, so people
[11:44] Speaker 5: getting refunds from not being able to travel, and we
[11:46] Speaker 5: think that may have contributed to some of the strength
[11:49] Speaker 5: that we saw in overall spending, but the underlying pace
[11:52] Speaker 5: has been quite weak.
[11:53] Speaker 3: If we kind of look at spending on an ex
[11:56] Speaker 3: transport basis in terms.
[11:58] Speaker 5: Of the saving start, I think that's where the really
[12:01] Speaker 5: interesting part comes in, because we saw that a lot
[12:04] Speaker 5: of consumers have quite healthy buffers, particularly ones with mortgages,
[12:09] Speaker 5: and those buffers were nearly as strong as what we
[12:11] Speaker 5: saw in twenty twenty two prior to the rate hikes,
[12:14] Speaker 5: So consumers are in a pretty good position, but their
[12:17] Speaker 5: lack of confidence in the economy is really what's leading
[12:20] Speaker 5: them to slow down and hold back on excessive spending.
[12:25] Speaker 1: Confidence Is that still an issue for China? We see
[12:27] Speaker 1: that sort of demand driven reflation really starting to weaken
[12:31] Speaker 1: in the latest inflation readings.
[12:32] Speaker 3: Yeah, certainly.
[12:33] Speaker 5: I think for China that confidence story is quite important,
[12:37] Speaker 5: and why Chinese consumers is like so much confidence, it's
[12:42] Speaker 5: not hard to see. I mean, the main source of
[12:44] Speaker 5: wealth was housing, and the housing downturn the last couple
[12:47] Speaker 5: of years hasn't been great for that. On the flip side,
[12:51] Speaker 5: the labor market hasn't been particularly strong. During previous expansions,
[12:57] Speaker 5: particularly industrial expansions, where we saw big growth in exports
[13:02] Speaker 5: and industrial production. That usually translated into labor market growth
[13:08] Speaker 5: as well, because you know, you have to hire more
[13:10] Speaker 5: workers to make more products. But this time round, because
[13:12] Speaker 5: a lot of the growth is coming from the high
[13:14] Speaker 5: tech manufacturing sector that doesn't require as much labor, it's
[13:18] Speaker 5: more capital intensive, we've seen a slowdown in how in
[13:23] Speaker 5: hiring and that's really dampened consumers.
[13:26] Speaker 3: So for China, the main issue is making sure.
[13:28] Speaker 5: Consumers don't lose their confidence completely and that for that
[13:32] Speaker 5: not to turn into a structural factor of the Chinese economy.
[13:35] Speaker 3: So the K shaped recovery continues.
[13:37] Speaker 1: Do you expect more fiscal stimulus or do you think
[13:40] Speaker 1: at this point it's something that China is comfortable with.
[13:44] Speaker 5: Yeah, recent meetings suggests that maybe fiscal stimulus in the
[13:47] Speaker 5: way we saw in twenty twenty five probably won't be
[13:50] Speaker 5: a thing. I don't expect a lot of cash handouts
[13:53] Speaker 5: to come through twenty twenty six. That said, it doesn't
[13:56] Speaker 5: mean that Chinese consumers don't need to be.
[13:59] Speaker 3: Aided fiscal support. What that fiscal support.
[14:03] Speaker 5: Really should be doing is helping bolster confidence. One way
[14:06] Speaker 5: of doing that is helping support the equity market and
[14:09] Speaker 5: encouraging consumers to invest into the equity market because that
[14:13] Speaker 5: allows them to that allows them to give sharing on
[14:20] Speaker 5: all lot of the gains in the tech sector rather
[14:22] Speaker 5: than miss out.
[14:23] Speaker 2: That was Eleana Jaane, international economist at Westpac, speaking of
[14:26] Speaker 2: Bloomberg's Heidi Shroud Watts, and we're bringing their conversation to
[14:30] Speaker 2: you here on the Daybreak Asia podcast.
[14:34] Speaker 6: Thanks for listening to today's episode of the Bloomberg Daybreak
[14:38] Speaker 6: Asia Edition podcast. Each weekday, we look at the story
[14:41] Speaker 6: shaping markets, finance, and geopolitics in the Asia Pacific. You
[14:46] Speaker 6: can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,
[14:50] Speaker 6: or anywhere else you listen. Join us again tomorrow for
[14:53] Speaker 6: insight on the market moves from Hong Kong to Singapore
[14:57] Speaker 6: and Australia. I'm Doug Prisner, and this is Bloomberg. Hmm.

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