Frederic Neumann

That's right.

We started off the year with really optimism.

Financial markets were up.

Inflation was easing.

Consumers were looking a little bit more confident.

But with the energy shock that developed since late February, early March, you've seen this turn in confidence.

And that's very evident in some of the measures you also mentioned across the U.S., Europe.

Yeah, take us into some of the examples you're seeing of this across Asia.

Well, Asia is particularly exposed to this energy shock.

It's the region that gets most of its energy from the Gulf through the Strait of Hormuz.

About 60% on average of Asian oil imports come through the Strait of Hormuz.

And so there is obviously great concern among consumers that gas prices will go up.

It's not just gas and petrol, it's also fertilizer prices, for example.

And so you're seeing now the consumer confidence readings starting to plummet.

In Japan, for example,

We've seen a big, big decline, the biggest drop since really the start of COVID.

So that's how worried consumers have become.

Even if prices have not yet risen at the pump because of subsidies, they're already fretting essentially what's going to happen to prices down the road.

That's right, because it's all about confidence, right?

So if you expect prices to go up down the road and your paycheck is not going to increase, you're going to become more cautious in terms of your spending decisions.