The US

The Dollar index gained 0.13% to 101.96. The unemployment rate in the US fell to 3.5% in March 2023, lower than the market expectation of 3.6%. The number of unemployed people decreased by 97,000 to 5.8 million, while employment levels increased by 577,000 to 160.9 million. Additionally, the labour force participation rate increased to 62.6% in March, the highest since March 2020.

US Equities & Sovereign Bonds

Wall Street was closed due to Good Friday Holiday. The Dow Jones closed at 33,485, S&P500 at 4,105, and Nasdaq at 12,088.

The UST10Y benchmark yield closed at 3.305% and the UST2Y closed at 3.831%, bringing the inverted differential to 53 bps.

Eurozone

The Euro weakened 0.06% to 1.092. Italy's government is planning to reduce its economic growth forecast for 2024 due to concerns about rising interest rates and challenges in spending EU recovery funds. Italy had previously targeted a growth rate of 0.6% for 2023 and 1.9% for 2024, as the country attempts to recover from the economic impact of the Covid-19 pandemic.

The UK

The British Pound also weakened by 0.02% to 1.244. The S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) was 52.9 in March 2023, slightly below February's 53.5 but still above the expansion level. This suggests that the UK's economy is on track for growth in early 2023.

Japan

The Japanese Yen weakened by 0.02% to 131.80. The index of leading economic indicators in Japan increased in from 96.6 in January 223 to 97.7 in February 2023, due to further economic recovery, with the service sector experiencing its most significant growth in over nine years, and manufacturing activity shrinking at the slowest pace in five months. Additionally, this was the highest reading since last October.

China

The Yuan weakened by 0.03% to 6.875. Focus this week will be on China's annual inflation rate. Back in February 2023, inflation dropped from 2.1% to 1.0%, mainly due to lower prices of both food and non-food items, as consumers remained cautious despite the removal of the zero-Covid policy. Food inflation fell to its lowest in nine months. Non-food inflation was also lower, with costs growing less for transport and education, while falling further for housing.

South Korea

The Won gained 0.18% to 1,317. South Korea's current account recorded a deficit of USD0.52 billion in February 2023, compared to a surplus of USD6.42 billion in the same month of the previous year. The balance of goods recorded a deficit of USD1.30 billion, and the balance of service moved into a deficit of USD2.03 billion. For the record, its current account balance stood at 3.2% of GDP in 2022.

Australia

The Aussie dollar gained 0.09% to 0.668. Treasurer Jim Chalmers has said that the government will continue to take international developments including the high interest rates and impact from the Russian-Ukraine war into account as they finalize the budget, which is expected to be tabled in May 2023.

Crude Oil

Brent closed at US$85 per barrel and WTI closed at US$81 per barrel, still trading at the highest level after OPEC+ announcement on production cuts.

Gold

Gold closed lower at US$2,008/oz, and has been trading above the USD2,000- level since 4 April 2023.

Malaysia Highlights

The Ringgit appreciated 0.04% to 4.400. The Prime Minister announced an additional allocation of RM35 million aimed at empowering communities in public housing projects (PPR) in Selangor and Kuala Lumpur. The programme is expected to benefit 50,000 PPR residents through 12 housing projects that have been identified as problematic.

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 was down 0.02% to 1,425. Detailed transactions showed that the local institutions were the net buyer with RM30.7 million. Foreign investors and local retailers were net seller of RM26.0 million and RM4.7 million, respectively.

Fixed Income

MGS benchmark yield for 3-year remained at 3.355%, 5-year remained at 3.495%, 7-year remained at 3.715%, and 10-year +1.5 bps to 3.865%.

Source: AmInvest Research - 10 Apr 2023