The US

The Dollar index rose 0.45% to 102.56, supported by the lingering sentiment of further rate hike bets, triggered by the strong labour market data on Friday. On another note, New York Fed survey showed that share of households expecting for a tighter credit condition rising in the wake of recent banking sector turmoil. Despite that, the year-ahead inflation expectation rose to 4.7% in March 2023 survey compared to 4.5% in the previous month.

US Equities & Sovereign Bonds

Wall Street closed mixed as the Dow Jones climbed 0.45% to 33,587, S&P500 climbed 0.10% to 4,109, while Nasdaq fell 0.03% to 12,084.

The UST10Y benchmark yield added 3 bps to 3.417% and the UST2Y added 3 bps to 4.008%, widening the inverted differential to 59 bps.

Eurozone

The Euro fell 0.42% to 1.086. One of the ECB policymakers Pablo Hernandez de Cos stated that core inflation is likely to remain elevated during the rest of 2023, which will delay returning back to the 2.0% targeted level and opening the possibilities of further interest rate increases. The ECB so far has raised its interest rates by 350 bps cumulative since July last year but did not provide clear guidance for its 4th May meeting.

The UK

The British Pound also shed 0.29% to 1.238. Retail sales in the UK expanded 4.9% y/y in March 2023, the same pace as in the prior month (cons.: 4,2%). Retailers noted that Mother’s Day had provided some boosts despite the high cost of living pressure.

Japan

The Japanese Yen depreciated 1.10% to 133.61 following the new BoJ governor Kazuo Ueda’s remarks. He stated that it is appropriate for the central bank to maintain the ultra-accommodative policy for now as inflation has yet to reach 2.0% sustainably, which suggests the BoJ can be patient in achieving the target. Although, he also noted that the BoJ must avoid being too late in jumping the interest rate hike wagon to prevent costly measures later down the road. On the data front, the consumer confidence index gained to 33.9 in March 2023, higher than 31.1 previous reading (cons.: 31.9). Households’ sentiment improved across the board; income growth, employment, overall livelihood and willingness to buy durable goods.

China

The Yuan weakened by 0.24% to 6.885. In an effort to spur the economy after being ravaged by the pandemic restrictions, provinces in China plan to boost spending on major construction this year, in parallel with Beijing’s reliance on infrastructure “playbook” in boosting the economy. It is estimated more than 12.2 trillion yuan (US$1.8 trillion) worth of spending plans have been announced.

South Korea

The Won depreciated 0.21% to 1,320. South Korean President Yoon Suk Yeol called for a national strategy meeting to boost the rechargeable battery and semiconductor sectors’ competitiveness. This is amidst the slump in global trade and still-sluggish demand from its neighbour China. Today, the Bank of Korea (BoK) is expected to leave its interest rate unchanged for the second consecutive meeting to help support the slowing domestic economy.

Australia

The Aussie dollar lost 0.46% to 0.664. The Australian market was closed on Monday due to Easter Monday.

Crude Oil

Brent fell 0.88% to US$84 per barrel while WTI dropped 1.19% to US$80 per barrel as investors worried that further interest rate hikes could dampened demands towards oil.

Gold

Gold fell 0.82% to US$1,991/oz as strong labour market data in the US turned investors’ focus on rates instead.

Malaysia Highlights

The Ringgit depreciated 0.18% to 4,410 and traded within the range of 4.402 and 4.411. Malaysia’s unemployment rate declined to 3.5% in February 2023, the lowest level since February 2020, after it was flat at 3.6% for fifth consecutive months.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.380 and 4.390 while resistance is pinned at 4.420 and 4.430.

FBM KLCI

The FBM KLCI rose slightly by 0.08% to 1,428. Detailed transactions showed that local institutions were the net buyers with RM45.0 million, while local retailers and foreign investors were the net sellers with RM17.7 million and RM27.3 million, respectively.

Source: AmInvest Research - 11 Apr 2023