The US

The Dollar weakened by 0.33% to 105.31. Focus today will be on the US’ labour market data that will be published later tonight. Market is expecting the unemployment rate to remain at 3.4% in February 2023, suggesting the labour market is tight while the Nonfarm payroll is forecast to print 210K (January 2023: 517K) over the same period.

US Equities & Sovereign Bonds

Wall Street closed lower with the Dow Jones was down by 1.66% to 32,255, S&P500 fell by 1.85% to 3,918 and Nasdaq also declined by 2.05% to 11,338.

The UST10Y benchmark yield was down by 9 bps to 3.903% and the UST2Y was also down by 20 bps to 4.870%, widening the inverted differential to 97 bps.

Eurozone

The Euro gained 0.34% to 1.058 due to the weaker Dollar. The Eurozone's GDP remained unchanged on quarter-on-quarter in the 4Q 2022, according to Eurostat, revising down its previous flash estimate of 0.1% growth. The revision confirmed that the Eurozone managed to avoid a technical recession, which had previously been expected.

The UK

The UK Sterling gained 0.68% to 1.193. The British Chambers of Commerce (BCC) predicts that the UK economy will avoid a recession this year, but slow growth means it will not recover to pre-pandemic levels until the final quarter of 2024. The BCC upgraded its outlook due to better-than-expected household spending and firm investment at the end of 2022.

Japan

The Japanese Yen was up by 0.88% to 136.15. The Japanese economy stagnated in the 4Q2022, instead of growing by 0.3% based on the previous estimate, indicating a fragile recovery. Private consumption growth was less than anticipated, and capital spending fell for the first time in three quarters, while government spending increased further. However, net trade contributed positively to the GDP, as exports rose, and imports fell.

China

The Yuan traded lower by 0.08% to 6.965. China's inflation rate dropped to 1.0% in February 2023, missing market forecasts of 1.9%. This was due to slowing prices of both food and non-food items, as consumers remained cautious despite the removal of the zero-Covid policy.

South Korea

The Won lost 0.07% to 1,322. The Bank of Korea has warned that the lagged effects of its monetary tightening will have a bigger negative impact on economic growth this year than in 2022. The bank estimates that its 300 basis points of rate increases in the current tightening cycle will lower the country's economic growth rate by 1.4 percentage points in 2023, compared to 0.9 percentage points in 2022. It is expected that the tightening will also lower consumer inflation by 1.3 percentage points this year, versus 0.4 percentage points in the previous year.

Australia

The Aussie Dollar gained 0.02% to 0.659. Australian bond values are rising while US bond values are falling due to the Reserve Bank of Australia's softer approach to monetary policy. The yield on 10-year Australian notes is 30 basis points below similar-dated Treasuries, nearly the biggest discount seen since March 2020.

Crude Oil

Oil prices were down yesterday, where Brent down by 1.29% to US$82 per barrel and WTI also down by 1.23% to US$76 per barrel

Gold

Gold Gained 0.95% to US$1,831/oz Due to the Weaker Dollar.

Malaysia Highlights

The Ringgit gained 0.14% to 4.519. In line with our expectation, Bank Negara Malaysia (BNM) keeps the Overnight Policy Rate (OPR) unchanged at 2.75% where economists were almost equally divided in their call. This status quo decision is to allow the economy to readjust to the 100 bps rate hike that was made last year.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.460 and 4.470 while resistance is pinned at 4.500 and 4.520.

FBM KLCI

The FBM KLCI was down by 0.35% to 1,450. Detailed transactions showed that the local institutions and local retails were the net buyer with RM41.1 million and RM17.1 million respectively. Foreign investors were the net seller with RM58.2 million.

Source: AmInvest Research - 10 Mar 2023