The US

The Dollar index weakened 0.40% to 102.09. The latest S&P Manufacturing PMI survey showed slight improvement in the US manufacturing sector in March, where the index increased to 49.3 (February 2023: 47.3). Nevertheless, the reading is still under the contraction threshold since domestic and foreign demand conditions remained subdued due to inflation, which weighed on purchasing power. Manufacturers also engaged in cost-cutting initiatives as input buying and preproduction inventories fell.

US Equities & Sovereign Bonds

Wall Street was mixed where the Dow Jones was up by 0.98% to 33,601, S&P500 rose by 0.37% to 4,125, while Nasdaq fell by 0.27% to 12,189.

The UST10Y benchmark yield declined by 6 bps to 3.411% and the UST2Y was down by 6 bps to 3.963%, narrowing the inverted differential to 55 bps.

Eurozone

The Euro gained 0.55% to 1.090. Manufacturing activities in the Eurozone continued to decline, where the PMI fell from 48.5 in February 2023 to 47.3 in March 2023, indicating contraction for a ninth consecutive month.

The UK

The British Pound gained 0.62% to 1.241. The UK manufacturers experienced a deeper decline in March with the PMI falling to 47.9 (February 2023: 49.3). However, manufacturers turned more optimistic about the future as cost pressures and supply chain problems eased off. The survey showed that the downturn in output was driven by declines in both the consumer and intermediate goods sectors, while investment goods production rose for the second month in a row.

Japan

The Japanese Yen gained 0.30% to 132.46. The Bank of Japan's (BOJ) Tankan survey showed that Japanese manufacturers' sentiment worsened in the first quarter of 2023 to its lowest level in two years. The survey also revealed that corporate inflation expectations reached a new high, with firms projecting inflation to remain above the BOJ’s 2% target for the next five years. China

The Yuan weakened 0.06% to 6.878. China's manufacturing sector lost momentum in March due to weak export orders, which is slowing down the country's economic recovery from COVID-19 restrictions. The Caixin/S&P Global manufacturing PMI fell to 50.0 in March (February 2023: 51.6).

South Korea

The Won depreciated 1.16% to 1,316. South Korea's factory activity shrank at its quickest pace in six months in March 2023, with output and new orders falling faster than in February 2023. The latest manufacturing PMI for March 2023 stood at 47.6 (February 2023: 48.5), which was the lowest since September 2022, reflecting weaker global demand caused by the fallout from the Ukraine war and a tightening of policy by major central banks.

Australia

The Aussie dollar gained 1.51% to 0.679. Consensus are split on whether the Reserve Bank of Australia (RBA) will raise interest rates later today meeting or pause amid a cooling economic momentum. Nineteen economists surveyed by Bloomberg forecast that the RBA will hold at 3.60% today.

Crude Oil

Oil prices rose to the highest level since January 2023 following a surprise production cut of over 1 million barrels per day (bpd) by OPEC+. For the record, OPEC and Russia produce around 40 million bpd as of February 2023. Brent up by 6.47% to US$85 per barrel and WTI up by 6.28% to US$80 per barrel.

Gold

Gold Was Up 0.78% to US$1,985/oz, Reflecting Increase on All Commodity Prices.

Malaysia Highlights

The Ringgit depreciated 0.07% to 4.419. Malaysia's manufacturing PMI rose from 48.4 in February 2023 to 48.8 in March 2023, a slight improvement but remains in the contraction threshold. There was some improvement in demand in the manufacturing sector as employment and cost pressure improved. However, new order intakes moderated, and foreign sales fell at the softest rate since July 2022.

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 was up 0.76% to 1,433. Detailed transactions showed that the local institutions were the net buyer with RM38.7 million. Foreign investors and local retailers were net seller of RM38.6 million and RM0.1 million, respectively.

Fixed Income

MGS benchmark yield for 3-year +4.0bps to 3.400%, 5-year +0.5bps to 3.545%, 7- year remained at 3.810%, and 10-year +1.0bps to 3.920%.

Source: AmInvest Research - 4 Apr 2023