The US

The Dollar index weakened 0.34% to 101.75. US House of Representatives Speaker Kevin McCarthy has outlined a federal spending cut plan being sought by fellow Republicans, with ideas already rejected by Democrats, as conditions attached to an urgently needed increase in the government's debt ceiling.

US Equities & Sovereign Bonds

Wall Street was mixed the Dow Jones was down by 0.03% to 33,977, S&P500 up by 0.09% to 4,155, and Nasdaq down by 0.04% to 12,153.

The UST10Y benchmark yield was down by 2 bps to 3.576% while the UST2Y was up by 0.3 bps to 4.197%, widening the inverted differential to 62 bps.

Eurozone

The Euro gained 0.42% to 1.097. Eurozone bond yields have risen higher as investors brace themselves for more interest rate hikes from the European Central Bank. Yields had fallen earlier in March as the collapse of Silicon Valley Bank and the takeover of Credit Suisse sparked risk-averse positioning into safe-haven. However, as the situation appears to be relatively stable now, focus has re-shifted towards inflation conundrum as central bankers have not budged away from their inflation-fighting objective despite the recent banking turmoil.

The UK

The British Pound also gained by 0.40% to 1.243. The UK's unemployment rate rose to 3.8% in February 2023 with 49,000 more people becoming unemployed However, employment levels increased by 169,000 to 32.95 million, driven by parttime employees and self-employed workers. The total pay growth remained at 5.9% y/y.

Japan

The Japanese Yen gained by 0.26% to 134.12. The Ministry of Economy Trade and Industry (METI) is working on a code of conduct for mergers and acquisitions to spur greater industry consolidation in Japan. This effort is seen as necessary because Japanese firms are often viewed as lacklustre acquisition targets due to a perception of being indifferent to shareholders.

China

The Yuan gained by 0.05% to 6.876. China's economy grew by 4.5% y/y in 1Q2023, surpassing market expectations of 4.0%. While China's exports unexpectedly rebounded in March, the statistics agency stated that a complex global environment and insufficient domestic demand meant that the foundation for the country's recovery was "not yet solid." China has set a GDP target of around 5% for 2023.

South Korea

The Won weakened 0.56% to 1,319. South Korea's finance ministry has announced that it plans to extend the consumption tax cut on fuel through August, despite concerns that the government's tax revenue may miss its target due to an economic slowdown. The scheme provides a 25% discount on gasoline and a 37% discount on diesel and liquefied petroleum gas butane.

Australia

The Aussie dollar gained 0.36% to 0.673. The Reserve Bank of Australia (RBA) minutes indicate that the decision to pause interest rates was a close call. The Bank's stance is that of "conditional pauses," and the April pause should not be taken as a signal that the Bank won't tighten further if the economy remains too hot.

Crude Oil

Oil prices rose due to positive economic data from China and the resumption of northern oil exports from the Turkish port of Ceyhan. Brent up by 0.07% to US$85 per barrel and WTI up by 0.04% US$81 per barrel.

Gold

Gold Was Up by 0.51% to US$2,005/oz, Trading Above the 2,000 Level Throughout April.

Malaysia Highlights

The Ringgit weakened by 0.26% to 4.434 as talks about interest rate hike among major central banks become the focus again as concerns on the spillover effect the US and European banking turmoil has subsided as compared where it was earlier this month. On the data front, Malaysia’s trade numbers are due today, where consensus is expecting actual numbers for March 2023 will be much softer.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.390 and 4.400 while resistance is pinned at 4.440 and 4.450.

FBM KLCI

The FBM KLCI was down 0.18% to 1,432. Detailed transactions showed that the local institutions and foreign investors were the net sellers with RM25.7 million and RM22.8 million respectively. Local retailers were net buyers of RM48.5 million.

Source: AmInvest Research - 19 Apr 2023