The US

The Dollar index gained 0.28% to 103.49. A survey conducted by the Federal  Reserve in the US has revealed that Americans' financial well-being significantly  declined in 2022 due to high inflation. The survey showed that only 73% of US  adults reported being financially stable, marking a 5 ppts drop from the previous year and one of the lowest readings since 2016.

US equities & sovereign bonds

Wall Street closed lower as the Dow Jones was down by 0.69% to 33,056, S&P500  decreased by 1.12% to 4,146, and Nasdaq down by 1.26% to 12,560.  The UST10Y benchmark yield was down 2 bps to 3.692% while the UST2Y was up 0.1 bps to 4.316%, widening the inverted differential to 62 bps.

Eurozone

The Euro was down 0.40% to 1.077. Preliminary estimates of the Hamburg  Commercial Bank (HCOB) Flash Manufacturing PMI for the Eurozone in May 2023  indicate a decline to 44.6, down from 45.8 in April. The reading suggests a  significant contraction in the manufacturing sector, marking the sharpest decline in three years. Output, new orders, and backlogs of orders all experienced a faster rate of decline. However, there was a slight increase in employment.

The UK

The British Pound was down 0.19% to 1.241. The preliminary estimate of the S&P  Global/CIPS United Kingdom PMI for May 2023 revealed a drop to 46.9, down from  47.8 in the previous month, which was below the market's expectation of 48.0. This indicates a deterioration in the manufacturing sector, marking the sharpest decline  in five months. The decline was driven by factors such as decreased output for the  third consecutive period, subdued order books, and customer destocking.

Japan

The Japanese Yen gained 0.01% to 138.59. Flash data revealed that the Jibun Bank Japan Manufacturing PMI rose to an eight-month high of 50.8 in May 2023,  up from a final reading of 49.5 in April 2023. This marked the first expansion in  factory activity since October 2022, indicating a strengthening post-COVID  recovery. Both new orders and output returned to expansion territory for the first  time since June 2022, and at the fastest pace in 13 months.

China

The Yuan weakened by 0.34% to 7.056. A recent report by Coface, a global trade credit insurance group, indicates that many Chinese companies are still facing challenges with overdue payments, despite some improvement since Beijing reopened its borders after nearly three years of zero-Covid policies. The report,  based on a survey involving 1,000 Chinese companies, reveals that the average payment delay decreased from 86 to 83 days in 2022.

South Korea

The Won gained 0.45% to 1,312. In May 2023, the Composite Consumer  Sentiment Index (CCSI) reached 98.0 points, showing an increase from 95.1 points in the previous month. This marked the highest level since May 2022, with the easing of inflation expectations contributing to improved living conditions.

Australia

The Aussie lost 0.65% to 0.661. Preliminary readings for May 2023 indicate that the Judo Bank Australia Manufacturing PMI remained unchanged at 48, reflecting a third consecutive month of deteriorating business conditions in the manufacturing sector. The decline was primarily driven by a persistent reduction in new orders and outputs.

Crude oil

Oil prices traded higher where Brent was up by 1.12% to USD77 per barrel and WTI was up by 1.11% to USD73 per barrel. 

Gold

Gold was down 0.17% to USD1,975/oz, trading below the 2,000-level since last  week.

Malaysia Highlights

The Ringgit weakened by 0.51% to 4.573. Malaysia and the United Arab Emirates  (UAE) have announced their intention to negotiate a Comprehensive Economic  Partnership Agreement (CEPA). This bilateral trade deal, pursued by the UAE  since 2021 with several countries, will cover various aspects such as trade in goods  and services, investments, and economic cooperation.

Ringgit outlook for the week

The support level for USD/MYR is seen at 4.550 and 4.570 while resistance is  pinned at 4.60 and 4.650.

FBM KLCI

The FBM KLCI went down by 0.53% to 1,412. Detailed transactions showed that  the local institutions and local retailers were net buyers with RM29.1 million and  RM23.5 million. Foreign investors were net sellers with RM52.6 million.

Source: AmInvest Research - 24 May 2023