The US

The dollar index weakened 0.28% to 103.35. The US consumer inflation expectation for a year ahead remained at 5.0% in January 2023, the lowest level since 2021. Focus today will be on the release of headline inflation and core inflation for January 2023, where consensus is expecting both to recede to 6.2% and 5.4% respectively.

US Equities & Sovereign Bonds

Wall Street gained as the Dow Jones up 1.11% to 34,246, S&P500 up 1.14% to 4,137, and Nasdaq up 1.48% to 11,892.

The UST10Y benchmark yield down 3 bps to 3.702% while the UST2Y added 0.05bps to 4.518%, widening the inverted differential to 82 bps.

Eurozone

The Euro gained 0.42% to 1.072. The European Union's economy may be poised for better-than-expected performance in the coming year, as inflation eases and declining gas prices provide some relief for consumers and businesses. However, the European Commission's forecast highlights that there is still significant uncertainty and challenges in the economic landscape, particularly given the ongoing conflict in Ukraine. Focus today will be on the 4Q2022 GDP (2nd estimates), where the economy is expected to slow down from 0.3% to 0.1%, based on consensus expectation.

The UK

The pound gained 0.64% to 1.214. The findings a senior Bank of England official, indicate that the UK has experienced a significant loss of business investment since the 2016 Brexit referendum. The estimated GBP29 billion loss, equivalent to £1,000 per household, highlights the impact that the uncertainty surrounding Brexit has had on the economy.

Japan

The Yen weakened 0.81% to 132.42. After the announcement of the new incoming Bank of Japan (BoJ) governor, the movement of Yen was volatile, as the market is expecting that the BoJ will exit from its accommodative policy soon.

China

The Yuan weakened 0.06% to 6.818. According to Fitch, China's economy continues to recover and sectors such as retail and tourism-related to be the main beneficiaries. However, growth prospects also depends on the domestic property sector, which is expected to remain weak.

South Korea

The Won weakened 1.01% to 1,277.55. Foreign investors’ appetite on the South Korea’s stock market increased in January, where the Financial Supervisory Service reported that foreign investors have bought KRW6.14 trillion of stocks the highest since September 2013.

Australia

The Aussie Dollar gained 0.71% to 0.697. The Westpac-Melbourne Institute Index of Consumer Sentiment for Australia increased by 5% to 84.3 in January 2023. This will be the third month that the index is on the upward trend, due to some optimism on Australia's economy in the next 12 months.

Crude Oil

Russia’s Deputy Prime Minister said that the country is planning to send more than 80% of its crude oil exports to few of their friendly countries including China, India, and Sri Lanka, in response to EU's oil price cap. Brent was up 0.25% to US$86.61 per barrel and WTI up 0.53% to US$80.14 per barrel.

Gold

Gold Price Was Down by 0.65% to US$1,853/oz.

Malaysia Highlights

The ringgit depreciated 0.61% to 4.360. Bank Negara Malaysia (BNM) survey in which was announced recently showed that around 30% of Malaysians feel that their debts are burdensome. They survey also found that most Malaysians now are worried about their ability to fund their retirement, and 50% of the youth respondent did not think about their retirement plans.

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.290 and 4.300 while our resistance is pinned at 4.360 and 4.370.

FBM KLCI

The FBM KLCI was up by 0.04% to 1,475. Detailed transactions showed that the local institutions were the net sellers with RM48.2 million, offset by the net buying flow from local retails and foreign buyers with RM7.0 million and RM41.2 million, respectively.

Source: AmInvest Research - 14 Feb 2023