Snapshot Summary…

Global FX: The dollar received little support amid a cautious trading session ahead of incoming FOMC meeting

Global Rates: UST curve flattened after JOLTs report reported an upside surprise

MYR Bonds: MGS/GII space was supported taking cue from the rally in UST in the prior session

USD/MYR: Ringgit firmed slightly amidst the weaker dollar

Macro News

United States : According to the Bureau of Labor Statistics in their JOLTs report, the number of job opening in the US surged to 9.026 million during the final month of 2023, which is above market consensus of 8.75 million and from prior month reading of 8.925 million. During the month, job openings increased in professional and business services.

Eurozone: The Euro Area economy stagnated in the last quarter of 2023, posting a slight recovery from 0.1% q/q contraction in the previous quarter and beating market forecast of 0.1% q/q decline. This means that the bloc managed to circumvent a recession as better-than expected economic growth in Spain and Italy helped support the overall economy, despite the fall in in Germany’s economy (-0.3% q/q). We also saw positive growth contributed by other economies such as Portugal (0.8% q/q), Belgium (0.4% q/q), and Latvia (0.4% q/q).

Fixed Income

Global bonds: Initially, the UST curve extended its gains from Monday but later the curve flattened after JOLT job openings data surprised to the upside which pushed back pricing of Fed rate cuts. Bunds were bearish after the hot US job data and a slight upbeat from Eurozone’s GDP data. By the end of the day, the 10Y UST yield fell 4 bps while the 10Y Bund yield rose 3 bps.

MYR Government Bonds: In the local bond market, healthy price action was seen along the MGS/GII curve as market was very much supported taking cue from the overnight rally in US Treasuries after it was reported that the US Treasury reduced its estimate for federal borrowing for the current quarter.

MYR Corporate Bonds: Volume traded in the PDS space was healthy at more than MYR1.0 billion throughout the day as a few papers made their debut (11/30 Pengurusan Air SPV, 07/33 LPPSA, and AA- rated 09/30 UEM Sunrise). Gainers were seen outpacing losers and among notable trades were MYR5 million on 02/26 Danum Capital (AAA) done at 3.64% and MYR200 million on 03/32 KLK done at 4.02%.

Source: AmInvest Research - 31 Jan 2024