The US

The Dollar index fell 0.39% to 101.47, paring some gains it made from the previous session as recent data painted mixed picture on US economy. The new orders for US manufactured durable goods gained 3.2% m/m during March 2023, better than 1.2% m/m contraction in the prior month and market expectations of 0.7% m/m growth. The growth was driven by higher demand towards transportation equipment and computers and electronic products. On the other hand, the orders for non-defence capital goods excluding aircraft, a proxy for business spending plans, fell 0.4% m/m after 0.7% m/m contraction and worse than market expectation of 0.1% m/m contraction.

US Equities & Sovereign Bonds

Wall Street closed mixed as the Dow Jones fell 0.68% to 33,302, S&P500 fell 0.38% to 4,055, while Nasdaq rose 0.47% to 11,854.

The UST10Y benchmark yield added 5 bps to 3.449% while the UST2Y fell 0.3 bps to 3.951%, narrowing the inverted differential to 50 bps.

Eurozone

The Euro rose 0.62% to 1.104, reaching a new one-year high level. The ECB’s chief economist noted that despite the easing inflation in the region, it was “not the time” to end interest rate hikes. This is ahead of the 4th May meeting where the market is expecting for the central bank to push up interest rates by 25 bps.

The UK

The British Pound climbed 0.48% to 1.247. A survey by Confederation of British Industry (CBI) showed that retailers saw sales improved but remained cautious amid red-hot inflation and high interest rates. The CBI distributive trades survey showed that retailers reported sales volume improved as the weighted balance rose to +5 in March 2023 from +1 in the prior month (cons.: 0).

Japan

The Japanese Yen appreciated 0.07% to 133.67. The BoJ’s governor Kazuo Ueda stated the central bank need to keep monetary policy ultra-loose for now, but also indicated that there is possibility of raising interest rates if wage and inflation growth surge above expectations. The market is anticipating for the BoJ to stand pat during its meeting ending on Friday 28th April 2023, but the speculations for Ueda to phase out current accommodative policy are mounting.

China

The Yuan strengthened 0.07% to 6.928. China’s cabinet prepared a plan to boost domestic employment. It includes support for financial institutions to offer loans and issue subsidies for firms that hire college graduates and unemployed young people. Data showed that in March 2023, the unemployment rate among those aged 16-24 up ticked to 19.6% from 18.1% a month earlier.

South Korea

The Won weakened 0.30% to 1,336. Consumer sentiment in South Korea saw marked improvements as the Composite Consumer Sentiment Index gained to 95.1 in April 2023, from 92. It was the highest level since June 2022 supported by increased reading on living standards and morale concerning domestic economic conditions.

Australia

The Aussie dollar fell 0.35% to 0.660 following the lower inflation data. Inflation rate in Australia eased to 7.0% y/y in 1Q2023, down from 30-year high of 7.8% y/y in the previous quarter (cons.: 6.9%). Costs for foods, transport and housings slowed but health and insurance & financial services inflation grew faster. This may put less pressure on the RBA to continue raising its interest rate, but we still think that the job to bring down inflation to 2% - 3% target is still not done yet.

Crude Oil

Oil prices tumbled as Brent sank 3.81% to US$77 per barrel while WTI shed 3.59% to US$74 per barrel. Investors remained cautious as recession worries continued to engulf the market.

Gold

Gold Eased 0.42% to US$1,989/oz as the Recent Worries on US Banking Turmoil Has Subsided.

Malaysia Highlights

The Ringgit weakened 0.17% to 4.458 and traded within the range of 4.450 and 4.465. Malaysia emerged as the second-best performing ASEAN country after Singapore and jumped 15 ranks to 26 positions in the World Bank Logistics Performance Index (LPI). The index measures the easiness of establishing reliable and timely supply chain connections, supported by structural factors such as quality of logistic services, trade and transport-related infrastructure, and border controls.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.420 and 4.430 while resistance is pinned at 4.460 and 4.470.

FBM KLCI

The FBM KLCI fell 0.77% to 1,414. Detailed transactions showed that the foreign investors were the net sellers with RM62.2 million flow, offset by the local institutions and retailers buying flow of RM31.6 million and RM30.6 million, respectively.

Fixed Income

The MGS benchmark yields for 3-year -1.0 bps to 3.325%, 5-year +2.0 bps to 3.440%, 7-year +2.0 bps to 3.670%, and 10-year -1.0 bps to 3.755%.

Source: AmInvest Research - 27 Apr 2023