The US

The Dollar index weakened 0.37% to 103.20. Focus this week will be on the publication of the Federal Open Market Committee (FOMC) minutes, where investors will look for clues whether the FOMC has stopped its tightening cycle.

US equities & sovereign bonds

Wall Street closed lower as the Dow Jones was down by 0.33% to 33,427, S&P500  decreased by 0.14% to 4,192, and Nasdaq down by 0.24% to 12,658.

The UST10Y benchmark yield added 3 bps to 3.673% and the UST2Y up 1 bps to  4.266%, widening the inverted differential to 59 bps.

Eurozone

The Euro was up 0.32% to 1.081. European Central Bank (ECB) President  Christine Lagarde expressed the ECB's commitment to taking necessary steps to restore inflation to 2%. She emphasized the need for courage in making upcoming decisions. The ECB's Economic Bulletin highlighted the increasing wage pressures as employees seek to regain purchasing power lost due to high inflation.

The UK

The British Pound climbed 0.29% to 1.245. The focus this week will be on the inflation rate publication on Wednesday, where consensus is expecting the headline inflation to recede to a single-digit level based on Bloomberg’s estimates  (March 2023 actual: 10.1%).

Japan

The Japanese Yen gained 0.53% to 137.98. Japan's export growth in April 2023  was the slowest in over two years, primarily due to a decline in shipments to China and concerns about global economic demand. Ministry of Finance data revealed a  2.6% increase in exports compared to the same period last year, falling short of consensus expectations and marking the weakest growth since February 2021.

China

The Yuan strengthened 0.36% to 7.012. Chinese leaders are facing challenges in restoring confidence in the Chinese market due to disappointing economic data.  Premier Li Qiang's recent inspection tour in Shandong province provided some hints about the authorities' plans. The efforts will focus on increasing household spending, boosting export orders, and improving purchasing policies for newenergy vehicles, especially in rural areas. However, specific details about these measures are limited at this time.

South Korea

The Won gained 0.56% to 1,326. Against the backdrop of diplomatic tensions impacting the sluggish South Korean economy, the country's finance minister held a meeting with the Chinese ambassador to discuss economic cooperation. The finance ministry expressed the minister's desire for continued economic collaboration between the two nations, emphasizing the importance of reciprocity and mutual respect as the foundation for such cooperation.

Australia

The Aussie gained 0.44% to 0.665. Australia's economy experienced a decrease of 27,100 full-time jobs, alleviating concerns of a potential interest rate hike by the  Reserve Bank to combat inflation. The country's unemployment rate for April increased to 3.7% seasonally adjusted. The loss of full-time positions outweighed the addition of 22,800 part-time jobs, resulting in a net loss of 4,300 jobs. Crude oil Oil prices traded lower, Brent was down by 0.37% to US$76 per barrel and WTI  was down by 0.43% to US$72 per barrel.

Gold

Gold was up 1.03% to US$1,978/oz pessimism outlook increases.

Malaysia Highlights

The Ringgit closed at 4.538. Malaysia's total trade declined by 14.5% y/y in April  2023 to RM198.0 billion, with exports falling by 17.4% to RM105.4 billion (March  2023: -1.4% y/y) and imports declined by 11.1% to RM92.6 billion (March 2023: - 1.8% y/y). The trade surplus narrowed to RM12.8 billion (March 2023: RM26.7  billion). For the first four months of 2023, exports now declined by 3.0% on average.

Focus this week will be on the inflation rate on Friday, where consensus is expecting inflation to be at 3.3%.

Ringgit outlook for the week

The support level for USD/MYR is seen at 4.510 and 4.520 while resistance is pinned at 4.550 and 4.600.

FBM KLCI

The FBM KLCI went up by 0.04% to 1,429. Detailed transactions showed that the local institutions were net buyers with RM65.5 million. Local retailers and foreign investors were net sellers with RM24.7 million and RM40.8 million.

Source: AmInvest Research - 22 May 2023