The US

The Dollar index weakened 0.18% to 101.21. The US labour market remained tight, as the unemployment rate reached a 50-year low of 3.4% in April 2023, matching the low of 3.4% seen in January 2023, and was lower than expected by the market, which anticipated 3.6%. The number of unemployed people decreased by 182,000 to 5.657 million, and employment levels increased by 139,000 to 161.031 million.

US Equities & Sovereign Bonds

Wall Street closed higher as the Dow Jones was up by 1.65% to 33,674, S&P500 increased by 1.85% to 4,136, and Nasdaq rose by 2.25% to 12,235.

The UST10Y benchmark yield added 6 bps to 3.437% and the UST2Y up 12 bps to 3.914%, widening the inverted differential to 48 bps.

Eurozone

The Euro was up 0.06% to 1.102. Retail sales in the Euro Area fell by 1.2% in March 2023 compared to the previous month, which was worse than expected, and following a 0.2% decline in February. High prices of food and increasing borrowing costs reduced consumer affordability, leading to a 1.4% decrease in food, drinks, and tobacco sales, and a 1.1% decrease in non-food sales. However, sales of auto fuels rose by 1.6%. Among the major economies in the Euro Area, sales declined in Germany, France, and Italy, while they increased in Spain.

The UK

The British Pound climbed 0.49% to 1.264. The Bank of England monetary policy committee is set to meet this week, where market is currently split whether the interest rates should be raised by 25 bps to fight against inflation or to be maintained at 4.25% to avoid the UK economy from falling further.

Japan

The Japanese Yen weakened 0.38% to 134.80. A Kyodo News poll showed that 80% of respondents are against possible tax hikes to finance Japan's substantial defence build-up plan, despite concerns about China potentially taking military action against Taiwan. Only 19% showed support for Prime Minister Fumio Kishida's call to finance a portion of defence spending by taxes, with the government deciding in December to boost defence spending by more than 50% to JPY43 trillion in five years from fiscal 2023.

China

The Yuan strengthened 0.03% to 6.909. The Caixin China General Services PMI decreased to 56.4 in April 2023 from March's 28-month high of 57.8. However, it was the fourth consecutive month of expansion in service activity since the postCOVID recovery began. New orders and foreign sales increased at a slower pace, and employment grew at the slowest rate in three months.

South Korea

The Won gained 0.31% to 1,319. The Japanese Prime Minister Fumio Kishida went to Seoul to meet South Korean President Yoon Suk-yeol to improve relations between the two countries due to concerns over North Korea's nuclear program. This is the first visit by a Japanese leader to Seoul in 12 years, and Kishida hopes to have a candid discussion with Yoon to build trust, discuss about North Korea, economic security, and other international issues.

Australia

The Aussie gained 0.84% to 0.675. The end of China's Covid-19 restrictions didn't boost the Australian economy enough to offset the negative impact of the global economic downturn, according to Australian Treasurer Jim Chalmers. Although Australia expects to have a surplus for the first time in 15 years due to surging revenues from commodity exports and a strong labour market, the country's dependence on China as its largest trading partner is still a concern. Chalmers made the comments just before his announcement of the fiscal blueprint for 2023.

Crude Oil

Oil prices recovered after a declining trend last week. Brent was up by 3.86% to US$75 per barrel and WTI was up by 4.05% to US$71 per barrel.

Gold

Gold Was Down 1.63% to US$2,017/oz Pessimism Outlook Increases.

Malaysia Highlights

The Ringgit gained by 0.42% to 4.436. The Deputy Finance Minister said that Malaysia and ASEAN plan to explore new partnerships with Japan in finance, and expand existing collaborations in various areas like tourism, defence, and science and technology. He hopes that the cooperation will result in a stronger financial ecosystem that benefits all parties involved.

On macro news, Malaysia’s official 1Q2023 GDP numbers will be published on Friday. Analysts surveyed on Bloomberg had a wide range of views, with a median forecast of 4.8%, lowest at 4.2% and the highest forecast is at 6.0%.

Ringgit Outlook for the Week

The support level for USD/MYR is seen at 4.440 and 4.450 while resistance is pinned at 4.460 and 4.470.

FBM KLCI

The FBM KLCI went up by 0.35% to 1,431. Detailed transactions showed that the local institutions and local retailers were net sellers with RM15.6 million and RM12.9 million. Foreign investors were net buyers with RM28.5 million.

Source: AmInvest Research - 8 May 2023