The US

The Dollar index fell only slightly by 0.02% to close at 104.10. The market shrugged off the wider trade deficit data from USD60.6 billion in March 2023 to USD74.6 billion. The trade deficit in the US reached a six-month high of USD74.6 billion in April 2023, widening from the USD60.6 billion deficit in March 2023. The higher deficit mainly driven by declines in crude oil, fuel oil, pharmaceutical preparations, jewellery, financial services, and government goods and services.

US equities & sovereign bonds

Wall Street closed mixed, where Dow Jones climbed 0.27% to 33,665 but S&P500 fell 0.38% to 4,268, and Nasdaq shed 1.29% to 13,105. The 10Y UST yield sustained upward pressure on Fed hike fears. The UST10Y climbed 14 bps to 3.795% while the UST2Y climbed 8 bps to 4.556%.

Euro Area

The Euro climbed 0.06% to 1.070 by the end of Wednesday’s session as hawkish tone by the ECB President provided support for the currency.

The UK

Alongside lower Dollar, the British pound gained by 0.11% to 1.244. The house price index in the UK declined by 1.0% y/y in May 2023, the first contraction since December 2012 amidst elevated interest rate and high living costs.

Japan

The Japanese weakened 0.36% to 140.130. The Japan’s leading economic indicators improved to 97.6 in April 2023 after 96.9 in the prior month. The improvement is due to the continuous recovery in the Japanese economy, coming from the services and the manufacturing sector.

China

The Yuan depreciated 0.24% to 7.135 following external trade data showed trade surplus unexpectedly narrowed down to USD65.8 billion in May 2023, from USD90.2 billion in the prior month (cons.: USD92 billion).

South Korea

The Won depreciated 0.24% to 1,304. The OECD expects South Korea’s economic growth to be lower to 1.5% due to external factors slower private investments. The South Korea’s economy has been slowing down for the past quarters in line with higher lending rates and elevated inflation numbers.

Australia

The Aussie dipped 0.28% to 0.665 as slowing growth concerns having tug-of-war with RBA’s hawkish tone. In the 1Q2023, the Australian economy grew by 0.2% q/q (4Q2022: 0.6% q/q), which was lower than expected. This was the slowest growth rate in the past six quarters.

Crude oil

Brent gained 0.87% to around USD77 per barrel as a reaction from the Saudi Arabia plans to lower oil production at 9 million barrels per day in July 2023.

Gold

Gold dipped 1.20% to USD1,940/oz weighed by the uptick in UST yields.

Malaysia Highlights

The Ringgit strengthened 0.22% to 4.598 alongside higher oil price. Malaysia 5G network rollout has reached 62.1% in track with expectations to achieve 80% coverage by the end of this year, according to the Communications and Digital Minister.

Ringgit outlook for the week

The support level for USD/MYR is seen at 4.590 and 4.600 while resistance is pinned at 4.620 and 4.650.

FBM KLCI

The FBM KLCI shed 0.33% to 1,379. Detailed transactions showed that foreign investors were net sellers with RM98.2 million flow, being offset by local institutions and retailers with RM40.8 million and RM57.4 million, respectively.

Source: AmInvest Research - 8 Jun 2023