The US

The Dollar index fell 0.94% to 103.59, falling for the third straight sessions to its lowest level in one-month. Following the fallout of Silicon Valley Bank (SVB), NewYork’s Signature Bank, one of the key lenders in crypto industry, was closed down by regulators as depositors rushed to withdraw their funds. The prospect of contagious financial risk has brought about greater uncertainties into the market and market players are now pricing in less aggressive interest rate outlook. The Fed Fund futures are now showing 35.0% of no rate hike during 22nd March meeting and 65.0% of 25 bps rate hike.

US Equities & Sovereign Bonds

Wall Street experienced volatile session and closed mixed. The Dow Jones fell 0.28% to 31,819, S&P500 fell 0.15% to 3,856 while Nasdaq rose 0.45% to 11,189.

The UST10Y benchmark yield dropped further by 12 bps to 3.573%, a fresh new one-month low, while the UST2Y fell 60 bps to 3.976%, narrowing the inverted differential to 40 bps.

Eurozone

As the Dollar weakened, the Euro rose 0.83% to 1.073. The flight-to-quality sentiment was also mirrored in the Eurozone as the 2-year German Bund dropped by 40 bps to 2.69% after reaching as high as 3.10% last Friday.

The UK

Similarly, the British pound surged 1.27% to 1.218. On another note, thousands of junior doctors went on three-day strike, demanding for a better pay amidst surging inflation.

Japan

The Japanese Yen appreciated 1.35% to 133.21. On the data front, the business survey index of large manufacturers in Japan fell to -10.5% in 1Q2023 from -3.6% in the previous quarter, as corporates are facing higher import and raw material costs and heightened global economic uncertainties. It marked the lowest reading since the second quarter of 2020.

China

The Yuan appreciated 1.00% to 6.848. China’s new Premier, Li Qiang, during the closing ceremony of National People’ Congress, stated that China will shift its focus to high-quality development and improve science and technology.

South Korea

The Won Also Appreciated by 1.78% to 1,301, Taking Advantage From the Falling of US Dollar.

Australia

The Aussie dollar rose 1.34% to 0.667. The value of property in Australia is experiencing largest decline in record according to CoreLogic data. Values dropped by 7.9% while the median value of dwellings in more than 200 suburbs dipped below AUD$1 million.

Crude Oil

Risk averse mode following the collapse of SVB and Signature Bank has engulfed the market. Brent fell 2.43% to US$80 per barrel while WTI fell 2.45% to US$74 per barrel.

Gold

Gold Surged by 2.43% to US$1,913/oz Due to Bid for Safe Haven.

Malaysia Highlights

The Ringgit appreciated 0.56% to 4.395 and traded within 4.480 and 4.520 range. During the first month of 2023, the domestic industrial output sustained its growth albeit at moderate pace of 1.8% y/y, compared to 2.8% y/y reading in the prior month. It marked the slowest annual growth pace since August 2021 when the country was still struggling with pandemic restrictions. This reflects slower global economic activities which have already been preluded by the S&P Global Malaysia Purchasing Managers’ Index (PMI). The PMI was last spotted at 48.1, marking sixth consecutive months in contractionary region. All in all, we reiterate our 2023’s growth projection to be around 4.5%.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.460 and 4.470 while resistance is pinned at 4.540 and 4.550.

FBM KLCI

The FBM KLCI fell 0.79% to 1,422. Detailed transactions showed that the local institutions were the net buyer with RM23.50 million, respectively. Foreign investors and local retailers, meanwhile, were the net sellers with RM11.80 million and RM11.70 million outflow, respectively.

Fixed Income

Local bond market saw another day of keen buying interests as the benchmark MGS yield 3-year -4.0bps to 3.430%, 5-year -6.5bps to 3.525%, 7-year -7.0bps to 3.770%, and 10-year -5.0bps to 3.900%.

Source: AmInvest Research - 14 Mar 2023