Global Macro: 

US President Donald Trump held a Situation Room meeting on Friday to make a “final determination” on signing a 90-day extension to the ceasefire between the US and Iran. However, the two-hour meeting ending without a decision. On Sunday, the BBC reported that Trump is pushing for changes in the memorandum around both the Strait of Hormuz and enriched uranium removal. Both remain hard red lines for Tehran, so the gap that blocked a signature all week is unchanged. This (Monday) morning, Trump struck a calmer tone on his social media platform Truth Social, telling critics to stand down while he negotiates.

South Korea

South Korea's record semiconductor export boom is increasingly a story of concentration rather than breadth. In the first quarter, Korea’s five largest exporters, including Samsung Electronics and SK Hynix, accounted for USD 95.7bn, equivalent to 43.5% of total exports of USD 219.9bn and more than 80% of the entire increase in exports. The narrowness is just as stark in production, where manufacturing output rose 3% quarter-on-quarter but only 0.2% once chips are stripped out, with semiconductor output alone up 14.1%. Because chips generate just 2.1 jobs per KRW 1bn of output, around a third of the manufacturing average, the boom is doing little for employment and is widening wage gaps across the economy. Chief Presidential Secretary for Policy Kim Yong-beom cast the resulting mix of high interest rates, elevated inflation and a strong dollar as the cost of success of a transition to a higher-growth phase, projecting nominal growth close to 10% in 2026 on improving terms of trade from semiconductors and AI, and attributing Won weakness to foreign profit-taking after the rally in the Korea Composite Stock Price Index (KOSPI). The framing is politically convenient, but it captures a real tension between headline growth that is genuine in aggregate yet barely felt in the wider labour market.

Argentina

Economy Minister Luis Caputo confirmed the government will deploy USD 1bn from its latest International Monetary Fund (IMF) disbursement to repurchase close to USD 1.9bn in non-marketable Treasury bonds held by the Central Bank of Argentina (BCRA). That lifts total repurchases in May to USD 22.3bn in nominal terms and trims the gross debt stock by around 3.3% of gross domestic product (GDP). For the BCRA, swapping illiquid non-marketable paper for cash strengthens gross reserves and liquidity, plausibly in preparation for an upcoming Bopreal payment of about USD 1bn. The operation is as much about improving the quality and tradability of the BCRA balance sheet as about the headline debt reduction.

Czech Republic

The Czech National Bank (CNB) attributed weaker than projected first quarter growth of 2.2% year-on-year, below its own 2.5% forecast, to higher energy prices. The shortfall was transmitted largely through imports, as oil and gas costs rose on the back of the US/Iran war. Domestic demand held up well, with investment broad-based across machinery, buildings and vehicle-fleet renewal, and only modestly softer household consumption.

South Africa:

S&P affirmed the country’s ‘BB’ rating and maintained the positive outlook. A key factor for a one or two notch upgrade would be the continued delivery of reforms and fiscal discipline, allowing for higher GDP growth path than in previous decades. 

Source and notations for all tables in this document:

Source: Bloomberg, JP Morgan, Barclays, Merrill Lynch, Chicago Board Options Exchange, Thomson Reuters, MSCI. Latest data available on publication date.

* Price only. Does not include carry. ** Global Indices from Bloomberg. Price to Earnings: 12m blended-forward

Index Definitions:

VIX Index = Chicago Board Options Exchange SPX Volatility Index. DXY Index = The Dollar Index. CRY Index = Thomson Reuters/CoreCommodity CRM Commodity Index.

Figures for more than one year are annualised other than in the case of currencies, commodities and the VIX, DXY and CRY which are shown as percentage change.