The US

The Dollar index dropped 0.73% to close at its intraday low of 103.34 as the number of new unemployment benefit claims surprised the market to the upside. There was as much as 261k of new claims last week, up from 233k in the prior week and the highest level since October 2021 (cons.: 235k), a sign of labour market in the US losing its strength.

US Equities & Sovereign Bonds

Wall Street closed higher as the Dow Jones climbed 0.50% to 33,834 but S&P500 rose 0.6% to 4,294, and Nasdaq gained 1.02% to 13,239.

The 10Y UST yield lost 8 bps to 3.718% while the UST2Y lost 4 bps to 4.515%, widening the inverted differential between the two to 79 bps.

Euro Area

The Euro rose 0.78% to 1.078 alongside the weaker dollar. On the macro front, the Eurozone economy is officially in recession as its 1Q2023 GDP q/q growth figure was revised to -0.1% q/q from +0.1% q/q earlier estimates. At the same time, the 4Q2022 figure was also revised to -0.1% q/q from 0% reading. Amidst still high inflation, this can build up the case for the ECB to pause its rate hike sooner than expected.

The UK

The British pound gained 0.98% to 1.256. A survey by Royal Institution of Chartered Surveyors (RICS) indicated that there was a slight improvement in the housing market as the headline reading of net respondents seeing rises vs. fall in house price rose to -30 in May 2023 from -39 in April. However, the outlook for property remained grim amidst elevated living costs and high interest rate environment.

Japan

The Japanese yen strengthened 0.86% to 138.92 following the release of revised GDP data. In 1Q2023, the Japanese economy is now seen growing by 0.7% q/q compared to 0.4% q/q earlier estimate, and better than market forecast of 0.5% q/q. It was driven mainly by private consumption as tourism continued to benefit from the full lifting of travel borders, complemented by higher revision in capital expenditure and government spending.

China

The Yuan appreciated 0.33% to 7.112. According to data released by SEMI, a global semiconductor industry association, semiconductor equipment sales to China declined by 23% y/y to USD5.9 billion amidst heightened trade barrier imposed on the country.

South Korea

The Won depreciated slightly by 0.02% to 1,304. As the relation between South Korea and Japan becomes closer amidst rising China’s influence following the ongoing US-China’s tension, the former is planning to discuss on re-establishment of bilateral foreign exchange swap with Japan that expired back in 2015.

Australia

The Aussie rose 0.96% to 0.672, the strongest level since early May 2023. Macro data showed that Australia’s trade surplus narrowed to AUD11.2 billion in April 2023, down from AUD14.8 billion in March as exports contracted 5.0% m/m while imports gained 2.0% m/m.

Crude Oil

Concerns on global economic growth overwhelmed Saudi Arabia’s plan to cut oil supplies, caused oil prices to trade lower. Brent fell 1.29% to USD75.9 per barrel while WTI shed 1.71% to USD71.3 per barrel.

Gold

Gold Price Was on the Front Footing, Rising 1.31% to USD1,965/oz as the Dollar and UST Yields Fell.

Malaysia Highlights

The Ringgit weakened 0.51% to 4.621 and traded within the range of 4.598 and 4.623. The BNM’s assistant governor Adnan Mohamad Zahid stated that the Ringgit would not hit 5.00 level against the greenback as Malaysia is currently not experiencing any crisis.

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 dipped 0.29% to 1,375. Detailed transactions showed that foreign investors were the net sellers with RM159.9 million flow, being offset by local institutions and retailers with RM151.0 million and RM8.9 million, respectively.

Source: AmInvest Research - 9 Jun 2023