The US

The DXY Dollar weakened by 0.22 to 101.918. More American consumer now are expecting the US is heading for an economic recession. According to survey by the National Mortgage Professional, around 46% of the respondents believed that the US now is entering a recession, and half of the respondents said that they are now taking steps preparing for the downturn.

US equities & sovereign bonds

Dow Jones up by 0.31% to 33,734, S&P500 down by 0.07% to 4,017, and Nasdaq also down by 0.27% to 11,334.

The UST10Y benchmark yield up 5.71 bps to 3.453% and UST2Y up 1.71 bps to 4.210%, widening the inverted differential between the two to 71.76 bps.

Eurozone

The Euro gained by 0.14% to 1.089. The S&P manufacturing PMI in the Eurozone improved slightly from 47.8 in December 2022, to 48.8 in January 2023. However, it is still below the expansion threshold of 50. The slight improvement is reflecting to the easing in input costs and some optimism in the months to come.

The UK

The Sterling down by 0.36% to 1.233. The manufacturing PMI in the UK also improved from 45.3 in December 2022 to 45.5 in January 2022, but still below the expansion threshold. The improvement is reflecting to the improved business sentiment from the external front.

Japan

The Yen gained by 0.38% to 130.170. The manufacturing in Japan unchanged at 48.9 in January 2023. This was the third month of decline in factory activities in Japan due to weaker demand and slower output and new orders. However, expectation on business sentiment for the months to come did improve.

China

The Yuan remained at 6.793 due to the Lunar New Year for the whole week.

South Korea

The Won weakened 0.15% to 1,230.57. A recent survey by the Korea International Trade Association showed that around 29.5% of South Korean conglomerates are planning to reduce investments and 27.5% to cut down overseas investments.

Australia

The Aussie Dollar gained 0.24% to 0.705. Focus today will be on the inflation rate, where consensus is expecting an increase from 7.3% in the 3Q2022 to 7.5% in the 4Q2022.

Crude oil

Oil prices were down on the day though its upward trend throughout January 2023 persisted since the reopening of China’s economy. Brent lost 2.34% to USD86.13 per barrel and WTI also down by 1.83% to USD80.13 per barrel.

Gold

Gold gained 0.33% to US$1,937/oz, and trading at its highest level since the beginning of the year.

Malaysia Highlights

The ringgit remained at 4.285 due to Chinese New Year holiday yesterday.

Against other currencies

The ringgit was weaker against the EUR, GBP, AUD, JPY, CNY, SGD, IDR, PHP and VND, but stronger against the THB.

Ringgit outlook for the day

We expect the MYR to trade between our support level of 4.280 and 4.290 while our resistance is pinned at 4.370 and 4.380.

FBM KLCI

The FBM KLCI remained at 1,500 due to Chinese New Year holiday yesterday.

Fixed Income

The benchmark yield MGS 3Y remained at 3.320%, 5Y remained at 3.500%, 7Y at 3.700%, and 10Y up 4.0bps to 3.750%.

Rates

The IRS yield for the 3-year remained at 3.315%, 5-year at 3.445%, 7-year at 3.555%, and 10-year at 3.660%.

Source: AmInvest Research - 25 Jan 2023