The US

The Dollar index closed at 103.60. In February 2023, the annual inflation rate in the US dropped to 6.0%, the lowest since September 2021, in line with market expectation. The slowdown in inflation was due to the slower price increase in prices and a continued decline in the cost of used cars and trucks. Energy and fuel oil costs also slowed sharply, with gasoline prices falling 2.0% after a 1.5% rise in January 2023. Despite the latest development surrounding the financial systems in the US, market is still pricing in that the Federal Open Market Committee (FOMC) to make 25 bps rate hike next week.

US Equities & Sovereign Bonds

Wall Street closed higher, where The Dow Jones was up by 1.06% to 32,155, S&P500 up by 1.06% to 3,919 and Nasdaq up by 2.14% to 11,428.

The UST10Y benchmark yield up by 12 bps to 3.689% and the UST2Y up by 27 bps to 4.250%, widening the inverted differential to 56 bps.

Eurozone

The Euro rose 0.02% to 1.073. European shares had their largest one-day gain in almost three months on growing optimism about a slowdown in the FOMC’s ratehiking cycle. The German DAX closed 1.8% higher, rebounding from its selloff past few days.

The UK

The British pound lost 0.21% to 1.2186. The UK's unemployment rate for November 2022 to January 2023 was 3.7%, which is almost the same as the previous three-month period and slightly lower than what was expected. This figure is also 0.3 ppts lower than pre-pandemic levels.

Japan

The Japanese Yen depreciated 0.76% to 134.22. Japanese policymakers are downplaying the risk of the economy being affected by the collapse of SVB, despite financial stocks and domestic share prices being impacted by fears of contagion. The Economy Minister stated that the government is monitoring the situation but does not expect a significant impact on the economy at this time.

China

The Yuan lost 0.37% to 6.874. Focus today will be the retail sales and industrial production for China, where market is expecting these activities to rebound after affected by the strict Covid-related policies previously.

South Korea

The Won also lost by 0.67% to 1,310. South Korea's export prices fell by 2.7% in February 2023, which is the sharpest annual decline since December 2020. The drop in export prices was due to the stronger won and lower costs for agricultural, forestry, and marine products as well as manufacturing products. This follows an upwardly revised 1.2% fall in export prices in the previous month.

Australia

The Aussie dollar rose 0.21% to 0.668. The Council of Financial Regulators in Australia, which includes the Reserve Bank, has warned that the country's slowing economy and rising interest rates may lead to higher loan losses for banks, both in the housing and business sectors. However, they noted that the banks' capital requirements are strong enough to withstand any potential shocks. The Council stated that it will continue to monitor credit growth, asset price developments, lending standards, and system-wide resilience.

Crude Oil

Brent Fell 4.11% to US$77 Per Barrel and WTI Also Fell 4.64% to US$71 Per Barrel.

Gold

Gold Was Down by 0.51% to US$1,904/oz But Still Trading Higher Due to Flow Into the Safe Haven.

Malaysia Highlights

The Ringgit gained 0.23% to 4.484. Malaysia's International Trade and Industry Minister has stated that the country will focus on improving the ease of doing business to attract high-quality investments. The government plans to streamline processes and closely monitor and track investment processes in real-time through a dedicated unit within the Ministry of International Trade and Industry.

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 4.250.

FBM KLCI

The FBM KLCI fell 1.97% to 1,394. Detailed transactions showed that the local institutions and local retails were the net buyer with RM138.1 million and RM113.1 million, respectively. Foreign investors were the net seller with RM251.2 million.

Fixed Income

MGS yield 3-year -2.5 bps to 3.405%, 5-year -3.0 bps to 3.495%, 7-year remained at 3.770%, and 10-year -4.0bps to 3.860%.

Source: AmInvest Research - 15 Mar 2023