Daily Market Snapshot

The US

The Dollar index gained 0.17% to 101.92 but still hovering around the one-year low it reached recently. According to the latest US Fed Beige Book, nine Districts reported little to no change in economic activities while three districts indicated a modest growth. Consumer spending and manufacturing activity were seen largely down or flat amidst high uncertainties and elevated interest rate level, but tourism and travel picked up across much of the country. At the same time, lending volumes and loan demand decline in all consumer and business loan types. All these factors are showing clear signs of slowing, building up the case for the Fed to reach its rate hike cycle peak sooner.

US Equities & Sovereign Bonds

Wall Street closed mixed again as the Dow Jones fell 0.23% to 33,897, S&P500 fell marginally by 0.01% to 4,155, while Nasdaq climbed 0.03% to 12,157.

The UST10Y benchmark yield added 1 bps to 3.596% while the UST2Y was up by 5 bps to 4.244%, widening the inverted differential to 65 bps.

Eurozone

The Euro shed 0.15% to 1.096. Inflation rate in the Eurozone was affirmed at 6.9% y/y in March 2023, while core inflation was at 5.7% y/y, according to the final report. On another note, the region recorded a current account surplus at EUR21.3 billion during February 2023 which marked the largest surplus since December 2021 and was driven mainly by larger goods account surplus.

The UK

The British Pound bucked the trend and rose 0.11% to 1.244 following the release of UK’s inflation data. Consumer price grew 10.1% y/y during March 2023, slower than 10.4% y/y in the prior month but much more than what market is expecting (cons.: 9.8% y/y). This is due to the higher food, recreation and culture, and miscellaneous goods and services inflation. The headline reading has now stayed above 10% level for the seventh consecutive month. Excluding energy and foods, core inflation rate stood at 6.2% y/y unchanged from February’s reading. This suggests a higher likelihood for the BoE to raise interest rate going forward.

Japan

The Japanese Yen weakened by 0.45% to 134.72. The Reuters Tankan sentiment index, which focuses on manufacturing sector, was flat at -3 during April 2023, the fourth month back-to-back it has stayed in the negative territory. Manufacturers remained pessimist amidst slowing global trade, worsened by the recent global banking sector turmoil.

China

The Yuan depreciated 0.12% to 6.885. The focus today in China will be on the loan prime rate (LPR) rate setting. The market is expecting the PBoC to keep the benchmark lending unchanged at 3.65% for 1-year and 4.30% for 5-year as economic recovery has, so far, been on track taking the hint from the better-than-expected GDP reading.

South Korea

The Won weakened again by 0.54% to 1,326. South Korea mulls easing its regulation to attract private business as much as 600 billion Won worth. The plan will enable local firms to go ahead with 55 new projects in an effort to address the imminent economic slowdown.

Australia

The Aussie dollar fell 0.18% to 0.671. The Westpac-Melbourne Institute Leading Economic index fell slightly by 0.01% m/m compared to 0.06% drop in February 2023, dragged by pessimism in household and slump in housing construction.

Crude Oil

Oil prices tumbled as Brent fell 2.22% to US$82 per barrel while WTI dropped 2.10% to US$79 per barrel. Sentiment among investors remained on the downside as the looming US Fed rate hike could further dampen economic activities.

Gold

Gold Dipped 0.52% to US$1,995/oz, Trading Below US$2,000/oz Level as UST Yields Closed Higher.

Malaysia Highlights

The Ringgit weakened 0.16% to 4.441 and traded within the range of 4.410 and 4.445. Malaysia's total trade declined by 1.6% y/y in March 2023 to RM232.7 billion, with exports falling by 1.4% to RM129.7 billion (February 2023: 9.8% y/y) and imports contracting by 1.8% to RM103.0 billion (February 2023: 12.4% y/y). This has widened the trade surplus to RM26.7 billion compared to February’s data of RM19.6 billion.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.400 and 4.410 while resistance is pinned at 4.450 and 4.460.

FBM KLCI

The FBM KLCI shed 0.51% to 1,425. Detailed transactions showed that the local institutions and retailers were the net buyers with RM30.1 million and RM63.5 million, respectively. Foreign investors were net buyers of RM93.6 million flow.

Fixed Income

The MGS benchmark yields for 3-year was flat at 3.331%, while 5-year -3.0 bps to 3.510%, 7-year -2.0 bps to 3.724% and 10-year -2.0 bps to 3.874%.

Source: AmInvest Research - 20 Apr 2023