The US

The Dollar index weakened 0.41% to 102.15. According to the International Monetary Fund (IMF), the United States economy is forecasted to grow by 1.6% in 2023, which is lower than the 2.1% growth seen in 2022. The IMF also warned of a "rocky road" for the global financial system following the collapse of two US banks last month, closely followed by a rushed takeover of Swiss banking giant. which sparked fears of another financial crisis.

US Equities & Sovereign Bonds

Wall Street was mixed where the Dow Jones was up by 0.29% to 33,685, while S&P500 down by 0.004% to 4,109, and Nasdaq fell by 0.43% to 12,032.

The UST10Y benchmark yield up by 1 bps to 3.426% and the UST2Y was also up by 1 bps to 4.022%, widening the inverted differential to 60 bps.

Eurozone

The Euro gained 0.49% to 1.091. Retail trade in the Euro Area fell by 3.0% y/y in February 2023, marking the fifth consecutive month of decline. The decrease was less severe than expected and was attributed to high inflation and rising borrowing costs impacting consumer demand.

The UK

The British Pound also gained by 0.34% to 1.242. The UK economy in 2023 will be the worst among the 20 biggest economies, according to the IMF, where the UK economy will shrink by 0.3% in 2023 and then grow by 1.0% in 2024.

Japan

The Japanese Yen weakened by 0.05% to 133.68. The new Governor of the Bank of Japan has said that he sees no major rate increases in the near future and that the current loose monetary policy remains appropriate. The Governor has made it clear that he will not make any immediate changes to the bank's existing approach since Japan is not currently in a situation where interest rates need to be significantly raised.

China

The Yuan weakened by 0.02% to 6.886. China's annual inflation rate came in at 0.7% in March 2023, below the market consensus and the previous month's figure of 1.0%. The lower rate was due to a drop in the cost of both food and non-food items, as the country's economic recovery remained uneven following the removal of zero-Covid policy.

South Korea

The Won weakened 0.18% to 1,322. The Bank of Korea (BOK) has kept its interest rate unchanged at 3.50% during its April meeting, marking the second consecutive time that the policy rate has remained steady. The decision was widely expected by consensus and comes as the country continues to grapple with elevated inflation, a slowing domestic economy, and global economic uncertainties.

Australia

The Aussie dollar gained 0.20% to 0.665. The Westpac-Melbourne Institute Index of Consumer Sentiment for Australia increased by 9.4% m/m in April 2023 to 85.8, its highest level since June 2022. The upturn was due to a pause in rate hikes by the Reserve Bank of Australia (RBA), with measures for economic conditions in the next 12 months and family finances in the coming year surging.

Crude Oil

OPEC+ producers experienced a significant decline in their collective production in March 2023, with output dropping by 680,000 barrels per day (bpd) to 37.64 million bpd, based on latest assessment by Energy Intelligence. Brent closed higher by 1.56% to US$85 per barrel and WTI up by 2.24% US$82 per barrel.

Gold

Gold Gained by 0.61% to US$2,004/oz.

Malaysia Highlights

The Ringgit depreciated 0.20% to 4.419. The Malaysian Industrial Production Index (IPI) grew by 3.6% y/y in February 2023, an improvement from the previous month, with manufacturing and electricity sectors leading the expansion. The mining sector output however declined after eight consecutive months of positive growth.

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 was up 0.54% to 1,436. Detailed transactions showed that the local institutions were the net buyer with RM12.7 million. Foreign investors and local retailers were net seller of RM4.3 million and RM8.4 million, respectively.

Fixed Income

MGS benchmark yield for 3-year up +0.5 bps to 3.345%, 5-year up +1.0 bps to 3.530%, 7-year remained at 3.730%, and 10-year +1.0 bps to 3.885%.

Source: AmInvest Research - 12 Apr 2023