Macro News

United States : Consumer sentiment surged in January 2024 to its highest level since July 2021, according to the University of Michigan Consumer Sentiment Index. The headline reading was 78.8, up from 69.7 in the prior month, beating the market forecast of 70. This reading has now risen nearly 60% above the all-time low reached in June 2022 and is likely to provide decent economic momentum. The stronger sentiment can be attributed to the confidence that inflation has already made its disinflation progress alongside firmer income expectations.

Malaysia : The Department of Statistics Malaysia (DOSM) released its advanced 4Q2023 GDP estimate report, where the number came in at 3.4% y/y, slightly faster than 3.3% y/y in the previous quarter. This translates into a 3.8% y/y full-year 2023 growth after an 8.7% y/y 2022 growth. On quarter-on-quarter performance, Malaysia’s economic growth moderated to 3.5% q/q from 5.2% q/q in the prior quarter.

Fixed Income

Global bonds: The UST yield curve on Friday flattened as the most interest ratesensitive part of the curve. The 2Y yield rose three bps, the 10Y yield fell two bps, and the ultra-long 30Y yield dropped four bps. US data continued to pressure bond market sentiment. The preliminary reading of the University of Michigan's Consumer Sentiment Index was came in at 78.8 for January, which strongly beat the consensus of 68.8. Meanwhile, existing Home Sales for December 2023 were at 3.78 million, which was only slightly below the consensus of 3.80 million. Elsewhere, German bund yields remained near the past month's high as sentiment remained affected by a chorus of ECB officials' comments in the past couple of weeks warning against earlierthan-expected interest rate cuts. The Bund yield curve also flattened, with the 10Y yield down 1 bps while the 2Y yield was up five bps.

MYR Government Bonds: The local government bond market remained supported last Friday, and this flowed into the auction for 5Y GII, which was well received, where the MYR5.0 billion sale saw BTC touching over 4x. The confluence of early-year demand and attractive yield may have lent strong support. Meanwhile, economic data showing Malaysia’s GDP growth and trade surplus missing consensus added to the bond upside.

MYR Corporate Bonds: In the corporate bond market, gainers outpaced losers, with interest focused on some infrastructure names. These included 07/33 Sarawak Energy (AAA), which shed two bps to close at 4.00%, and 04/43 Air Selangor (AAA) at 4.30%, which also fell two bps.

Forex

United States: The dollar index edged lower on Friday, taking a break after four straight sessions of bull-run. The DXY index is now hovering near its more than 1- month high following the stronger-than-expected Univ. of Michigan Consumer Sentiment Index, which reached its highest level since July 2021. Although it was a preliminary figure, multiple robust economic data released throughout the week supported bringing the dollar to where it is currently trading.

Europe: The EUR rebounded 0.2% against lower USD on Friday after multiple days of bearish trend. Data during the day, Germany’s producer inflation contracted further to 1.2% m/m after a 0.5% m/m decline in the prior month, suggesting a further retreat of inflation pressure in the economy. In the meantime, the GBP closed flat at 1.270 and could not find support as the shrink in the UK’s retail sales (-3.2% m/m vs November +1.4% m/m) pressured the currency.

Asia-Pacific: The Japanese yen last closed at 148.12 per dollar, its weakest level since early December last year, and approaching the 149-level. It spurred fresh verbal warnings from authorities as Finance Minister Shunichi Suzuki said on Friday that the government is watching currency moves “carefully”, stressing that market movements should reflect economic fundamentals. Japan’s inflation also grew slower in December, challenging the expectations that the BoJ would soon reverse its negative interest rate policy. Meanwhile, in China, the CNY firmed by a marginal 0.04% to settle Friday at 7.193 after the PBoC set the mid-point yuan fixing at 7.1167, stronger than the average Bloomberg survey estimate of 7.1953.

Malaysia: The ringgit erased its early Friday gains after reaching 4.713 following Malaysia’s advanced GDP reading, showing slightly better growth in the final quarter of 2023 than the previous quarter's reading but still falling short of market expectations. Also, Malaysia’s exports posted a larger decline of 10% y/y compared with a prior reading of a 6.1% decline and a market forecast of 4% contractions.

Other Markets

Gold : Gold prices were steady overnight, whilst the USD level showed less upward impetus from the current 103.50 level.

Crude oil : Oil prices fell, with Brent shedding 0.7% while WTI falling 0.9% despite the ongoing Middle East tension and

FBM KLCI: The FBM KLCI rose 0.5% to 1,486. Foreign investors bought a net of MYR53.3 million Malaysian shares.

Source: AmInvest Research - 22 Jan 2024