The US

The dollar index lost 0.37% to 104.48. Latest S&P Manufacturing Purchasing Managers’ Index (PMI) for the US remained under the contraction level at 47.3 in February 2023. This will be the fourth month that the index remained below the 50- threshold, due to lower demand from the external front.

US Equities & Sovereign Bonds

Wall Street was mixed as the Dow Jones was up 0.02% to 32,662, S&P500 was down by 0.47% to 3,951 and Nasdaq closed 0.66% lower to 11,379. The UST10Y benchmark yield was up by 7 bps to 3.993% and the UST2Y was also up 6 bps to 4.876%, narrowing the inverted differential to 88 bps.

Eurozone

The Euro gained 0.87% to 1.067. The S&P Global Eurozone Manufacturing PMI was confirmed at 48.5 in February 2023, slightly below 48.8 in January, marking the eighth consecutive month of falling factory activity. Supply chain pressures eased, and pre-production inventories declined. However, Eurozone manufacturers were slightly more optimistic about the year-ahead outlook compared to January.

The UK

The UK Sterling gained 0.06% to 1.203. British factory activity contracted at a slower pace than in July, according to the S&P Global/CIPS UK monthly manufacturing PMI. The index rose from 47.0 in January 2023 to 49.3, but it is still under the contraction zone. The survey also showed that 60% of manufacturers expect output to increase in the next 12 months, reflecting a cooling inflation pressure.

Japan

The Yen weakened 0.01% to 136.19. Japan's manufacturing sector experienced the sharpest decline in activity in over two years in February, according to the Jibun Bank of Japan Manufacturing PMI. The reading fell from 48.9 in January 2023 to 47.7 in February 2023, with both new orders and production levels dropping at the fastest pace since July 2020 due to weak domestic demand and a global economic slowdown.

China

The Yuan gained 0.95% to 6.870. The Caixin China General Manufacturing PMI increased to from 49.2 in January 2023 to 51.6 in February 2023 from 49.2 in January, beating market expectations of 50.2. This was the first increase in factory activity since July 2022, and the highest reading in 8 months, following a shift in the zero-Covid policy. Sentiment improved to a 23-month high, driven by expectations of sustained recovery in customer demand.  

South Korea

The Won gained 0.61% to 1,315. South Korea's exports fell by 7.5% y/y to USD50.1 billion in February 2023, lower than market expectations of an 8.7% decline. This marked the fifth consecutive month of decline, as foreign demand weakened due to persistent cost pressures, higher borrowing costs, and the downturn in the global chip market.

Australia

The Aussie Dollar gained 0.48% to 0.676. The Australian economy expanded 0.5% q/q in the 4Q2022, which is lower than market expectations of 0.8%, and 0.7% in the 3Q2022. This marked the fifth consecutive quarter of growth but is the slowest pace in the sequence due to weak household consumption, due to cost pressures and rising interest rates.

Crude Oil

Brent was up by 0.50% to US$84 per barrel and WTI also up 0.83% to US$78 per barrel.

Gold

Gold Gained 0.54% to US$1,837/oz Due to the Weaker US Dollar.

Malaysia Highlights

The ringgit gained by 0.33% to 4.473. The S&P Global Malaysia Manufacturing PMI increased from 46.5 in January 2023 to 48.4 in February 2023, marking the seventh consecutive month of contraction but reaching the highest level since September 2022. Output and new orders showed improvement, but new export orders continued to slow due to weak international demand. Business sentiment remained steady, with hopes that new orders would increase as market conditions improve.

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.450 and 4.460 while our resistance is pinned at 4.500 and 4.510.

FBM KLCI

The FBM KLCI fell 0.27% to 1,450. Detailed transactions showed that the local institutions and local retailers were the net buyers with RM41.8 million and RM42.4 million, respectively. Foreign investors were net seller at RM84.2 million.

Source: AmInvest Research - 2 Mar 2023