The US

The Dollar index fell slightly by 0.03% to 101.82 as investors were cautious following mixed employment data. US-based employers announced as much as 89.7k job cuts in March 2023, higher than 77.7k in the previous month as tight financing conditions are forcing companies to reduce their costs. At the same month, US employers planned to hire 9.0k workers, down from 28.8k. On the other hand, the initial jobless claims fell to 228k last week from 246k in the previous week.

US Equities & Sovereign Bonds

Wall Street traded higher as the Dow Jones rose 0.01% to 33,485, S&P500 climbed 0.36% to 4,105, and Nasdaq fell rose 0.76% to 12,088.

The UST10Y benchmark yield lost 0.6 bps to 3.305% but the UST2Y rose 5 bps to 3.831%, widening the inverted differential to 52 bps.

Eurozone

The Euro rose 0.17% to 1.092. The ECB chief economist Philip Lane argued that the decision for upcoming May meeting will depend on three factors; the inflation outlook, the bank's assessment of underlying price dynamics and on how quickly past rate hikes are impacting the economy. With the way it is right as recent banking crisis seemed to be contained, it may be appropriate for further rate hike.

The UK

The British Pound, however, fell 0.18% to 1.244. Housing price index in the UK unexpectedly rose for the third straight month and booking 0.8% m/m growth in March 2023 after 1.2% m/m growth in the previous month, beating market expectation of 0.3% m/m contraction. While this figure partly suggests that the housing market remained relatively stable, there are more room towards the downside given the elevated borrowing costs and high living costs which put pressure on housing demand.

Japan

The Japanese Yen weakened 0.35% to 131.78. BoJ’s data showed that Japan’s output gap, which measures the differences between actual and potential output, was at -0.43 in the last quarter of 2022, down from -0.08 from. Despite the recent inflation reading last spotted at above the target 2.0%, but negative output gap means weak demand in the economy which could push inflation lower over the longer term and may force the central bank to maintain accommodative policy.

China

But the Yuan appreciated 0.09% to 6.873. The Caixin China Composite PMI improved slightly to 54.5 in March 2023 from 54.2 in the preceding month, the strongest growth since June 2022 following the lifting of strict pandemic measures, supported mainly by the services sector.

South Korea

The Won depreciated 0.71% to 0.667. In establishing cutting-edge capabilities in global level, South Korea is planning to invest 160 trillion won (US$122 billion) into research and development in three key technology sectors of semiconductors, displays, and next generation batteries by 2027.

Australia

The Aussie dollar shed 0.71% to 0.667. Report by RBA showed that first home buyers and those in lower income group are feeling the impact from higher interest rate through financial stress and squeezing household budgets. Two factors that are keeping inflation levels elevated in Australia are high rental prices and surging energy costs.

Crude Oil

Oil prices closed on stronger footing as Brent added 0.15% to US$85 per barrel while WTI rose 0.11% to US$80 per barrel. Fears on dim prospect of global economic outlook outweighed oil prices but production cuts announced by OPEC+ provide some buffer to it.

Gold

Gold Fell 0.63% to US$2,008/oz.

Malaysia Highlights

The Ringgit appreciated 0.03% to 4.398 and traded within the range of 4.398 and 4.407. According to Fitch Solutions Country Risk and Industry Research, the risks for policy continuity has diminished but challenges in policymaking remains. The firm has maintained Malaysia’s Short-Term Political Risk Index (STPRI) score at 72.9 out of 100.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.370 and 4.380 while resistance is pinned at 4.415 and 4.425.

FBM KLCI

The FBM KLCI fell 0.33% to 1,425. Detailed transactions showed that local institutions were the net sellers with RM71.1 million, offset by the buying flow from local retailers and foreign investors at RM8.0 million and RM63.0 million, respectively.

Fixed Income

MGS benchmark yield saw lower yields as the 3-year -3.5 bps to 3.355%, 5-year - 2.0 bps to 3.495%, 7-year -1.0 bps to 3.715%, and 10-year -1.5 bps to 3.850%.

Source: AmInvest Research - 7 Apr 2023