<p><strong>GLOBAL: Iran said that it had intelligence indicating the US and its allies were preparing a big new attack. </strong>Iran declared that any such move would trigger sustained retaliation.</p>

<p><strong>Market impact: Oil prices fell last Friday amid reduced concerns over Saudi oil supply.</strong> Meanwhile, US stock futures were up ahead of US-China trade talks.&nbsp;</p>

<p><strong>A retaliatory response by the US and its regional allies is highly likely</strong> following the Houthi strikes on Saudi Arabia.</p>

<p><strong>LOCAL: The balance of payments deficit narrowed to USD 596 million in August, improving from the USD 1.5-billion gap in July.</strong> Remittances offset foreign exchange outflows.&nbsp;</p>

<p><strong>Market impact: The PSEi tumbled to the 5,800 level amid inflation and policy rate worries.</strong> Meanwhile, the peso weakened amid a strong US dollar and high Treasury yields.&nbsp;</p>

<p><strong>However, the structural pressures of high oil prices and global market volatility are expected to outpace the buffering effects</strong> of remittances and service exports over the coming months.</p>