The US

The Dollar index rebounded by 0.21% to 102.64 as focus has now turned to fighting inflation narrative. The US Fed Vice Chair Michael Barr told the Senate Banking Committee that Silicon Valley Bank’s problems were caused by its own governance and risk management hence suggesting it could be a contained crisis.

US Equities & Sovereign Bonds

Wall Street traded higher as the Dow Jones rose 1.00% to 32,718, S&P500 climbed 1.42% to 4,028, and Nasdaq gained 1.79% to 11,926.

The UST10Y benchmark yield lost 0.6 bps to 3.564% while the UST2Y added 2 bps to 4.099%, widening the inverted differential to 53 bps.

Eurozone

The Euro fell marginally by 0.01% to 1.084 as the dollar strengthened. ECB’s Chief Economist Philip Lane stated that the central bank will increase interest rates further to tame down inflation if the recent financial system turmoil remained isolated, considering that inflation rate in the region remains elevated.

The UK

The British Pound shed 0.23% to 1.231. According to a report by the BoE, due to the recent banking crisis, global investors have become more cautious and selective. This is against the backdrop of rising borrowing costs, ongoing political tension and high uncertainties on global economic activities.

Japan

The Japanese Yen depreciated 1.51% to 132.86. The BoJ’s Deputy Governor Shinichi Uchida flagged the possibility of tweaking the yield curve control policy if the economic and price conditions support the case of rolling back the ultraaccommodative stimulus. The central bank will consider many options, including those that have not been taken currently if the prospects of 2.0% inflation target can be hit sustainably.

China

The Yuan depreciated as well by 0.19% to 6.890. As part of the effort for the economy to achieve carbon neutrality, China’s outstanding green loans has exceeded 22 trillion yuan US$3.2 trillion) which taking up 10% of the total loans. So far, the PBoC has lent more than 300 billion yuan which helped banks to create 600 billion yuan loans to green projects.

South Korea

The Won weakened 0.35% to 1,303. The consumer sentiment indicator in South Korea inched higher to 92 in March 2023 compared to 90.2 in the prior month. This marked the highest figure since June 2022 citing better living conditions while the government’s move to delay public cost has helped buoy the sentiment.

Australia

The Aussie dollar fell 0.37% to 0.668. Report showed that the monthly inflation indicator in Australia fell to 6.8% y/y during February 2023, down from 7.4% y/y in January 2023 and from the record peak of 8.2% y/y in January 2023. This has built up the case for RBA to halt its rate hike cycle during next week’s meeting.

Crude Oil

Oil prices traded lower with Brent fell 0.47% to US$78 per barrel while WTI fell 0.31% to US$73 per barrel, weighed by profit taking after two days of gains.

Gold

Gold Fell 0.45% to US$1,965/oz as the Dollar Traded Higher.

Malaysia Highlights

The Ringgit weakened 0.39% to 4.418 and traded within the range of 4.391 and 4.421. According to the BNM 2022 Annual Report, the central bank expects the domestic economy to grow by 4.0% - 5.0% in 2023, with private consumption is anticipated to grow by 6.1%. The growth will be underpinned by improvement in the labour market, supports by the government, and recovery in tourism.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.390 and 4.400 while resistance is pinned at 4.425 and 4.435.

FBM KLCI

The FBM KLCI rose 0.80% to 1,420. Detailed transactions showed that the local institutions and foreign investors were the net buyers with RM29.6 million and RM4.9 million flow, respectively, while being offset by the net selling flow from local retailers at RM34.6 million.

Fixed Income

The MGS benchmark yield for 3-year was flat at 3.350%, while the 5-year +2.0 bps to 3.530, 7-year +1.0 bps to 3.810%, and 10-year +2.0 bps to 3.910%.

Source: AmInvest Research - 30 Mar 2023