The US

The DXY Dollar weakened by 0.02% to 103.41 by end of the trading day. President Biden delivered the State of the Union speech focusing on economic issues. He called for an increase in the debt ceiling to avoid defaulting the US debt and advocated for higher taxes on billionaires, consumer protections, and antitrust efforts. He also urged Congress to move past partisan differences and pass new measures.

US Equities & Sovereign Bonds

Wall Street closed lower on Wednesday. Dow Jones down by 0.61% to 33,949, S&P500 down by 1.11% to 4,118, and Nasdaq also down by 1.68% to 11,911.

The UST10Y benchmark yield was down by 6.370 bps to 3.610% and UST2Y down 4.360 bps to 4.421%. The 10/2 spread remained inverted, widening to 81.10 bps.

Eurozone

The Euro lost by 0.13% to 1.071. The European Central Bank (ECB) announced that some banks did not set aside enough money to cover bad loans and were too slow in recognizing the problem. The review also found that Eurozone banks generally have more capital than necessary and have benefited from the profit increase due to rising interest rates, which has offset the economic impact of the conflict between Russia and Ukraine.

The UK

The Sterling gained by 0.20% to 1.207. Britain's National Institute for Economic and Social Research (NIESR) forecasted that Britain will avoid a recession this year but predicts that Britons will experience a decline in living standards due to inflation and will have difficulties in paying their bills. NIESR also revised down its forecast for GDP growth in 2022 to 0.2% from 0.7%.

Japan

The Yen weakened by 0.25% to 131.40. Japanese Prime Minister Fumio Kishida has stated that he will take market’s consideration when choosing a new governor for the Bank of Japan (BoJ). He emphasized that the selection is significant for the direction of economic policy and has attracted attention from the financial and business community.

China

The Yuan was down by 0.11% to 6.792. Fitch has upgraded its GDP forecast for China to 5.0% from its previous forecast of 4.1% for 2023. The revision is due to faster-than-expected recovery in consumption and broader economic activity after the removal of the zero-Covid policy. The credit rating agency also believes that the recovery will be driven primarily by consumption and that high-frequency indicators have rebounded but remain below pre-pandemic levels.

South Korea

The Won weakened 0.35% to 1,260.19. South Korea had a current account surplus of USD2.68 billion in December 2022, reversing a deficit of USD0.22 billion in November 2022. However, the annual surplus was the smallest in 11 years.

Australia

The Aussie Dollar weakened 0.49% to 0.693. Despite the high inflation and high interest rates environment, Australia Treasurer Jim Chalmers is not expecting Australia to fall into a recession.

Crude Oil

Oil prices rose due to several factors including China's reopening progress, supply outages caused by earthquakes in Turkey and Syria, and shutdown of Norway's oilfield. Brent up 1.67% to USD85.09 per barrel and WTI also up by 1.72% to USD78.47 per barrel.

Gold

Gold gained 0.13% to US$1,875/oz, bust still trading trading lower since the decisions by major central banks last week.

Malaysia Highlights

The ringgit gained by 0.10% to 4.298. Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has announced that the budget allocations for Budget 2023 will be reduced but expects the reduction will not impact the country's development programs.

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.250 and 4.260 while our resistance is pinned at 4.300 and 4.310.

FBM KLCI

The FBM KLCI was down by 0.38% to 1,471. Detailed transaction showed local institutions and foreign investors were net sellers of RM2.1 million and RM55.0 million respectively. Local retailers were net buyer of RM57.1 million.

Fixed Income

The benchmark yield MGS 3Y down 3.0bps to 3.350%, 5Y -1.0bps to 3.510%, 7Y -1.0bps to 3.670%, and 10Y -1.5bps to 3.810%.

Source: AmInvest Research - 9 Feb 2023