A good start in April but will it sustain amid Fed rate-cuts jitters and RM weakness? 

KLCI: 1547.99 (4)
DOW: 39170.24 (-396.6)
MSCI Asia: 176.55 (0.9)
FCPO (RM): 4388 (76)
BRENT (USD): 88.92 (1.5)
USDMYR: 4.7525 (0.022)
SGDMYR: 3.5145 (0.007)
EURMYR: 5.1052 (0.003)
AUDMYR: 3.093 (0.008)
GBPMYR: 5.9737 (0.003)
US: 10-yr yield (%) 4.3491 (0.04)
BNM:10-yr yield (%) 3.844 (0.014)

Asia/US. Ahead of the JOLTS, non-farm payrolls and services PMI data in US, Asian markets ended mixed as investors pared bets the Fed will cut rates in June after an upbeat manufacturing PMI coupled with recent hawkish undertones by the Fed officials. Ahead fo the major non-farm payrolls and Services PMI data, the Dow recorded its 2nd straight loss (-397pts to 39,170) while US10Y bond yield jumped 4 bps to 4.35% (to 4M high) after recent solid economic readings and a rally in commodities triggers a recalibration of expectations for Fed rate-cut policy. On economic front, US weekly oil inventories fell more-than-expected by 2.28m barrels (vs -2m) while the US Logistics Manager’s Index surged 58.3 in March (fastest expansion since Sep 22). Additionally, the US Feb job openings topped expectations at 8.756m (vs 8.75m) and factory orders rose 1.4% (vs forecast:+1%). 

Malaysia. Bucking the mixed regional markets and weakening RM (vs USD), KLCI rose for the 3rd consecutive day (+4 pts to 1,548). Market breadth was positive for the 3rd consecutive session at 1.16 vs 1.24 a day ago. Foreign investors returned as net buyers after selling RM547m in the last four straight sessions (+RM134m, Apr: +35m, YTD: -RM839m) whilst retail investors (-RM53m, Apr: -RM99m, YTD: -RM1.41bn) and local institutions (-RM81m, Apr: -84m, YTD: +RM2.25bn) emerged as the major net sellers. 

Outlook Technically, barring a decisive fall below 1,500-1,518-1,528 support levels, the odds would still favour the bulls to resume its ascent in Apr (resistance: 1,559-1,578-1,600) after losing 1% in March, reflected by the KLCI’s historical average gains of 0.6% and 1.5% over the past 10 and 20 years, respectively. In the short term, KLCI is likely to remain choppy as investors weigh expectations for Fed rate-cut policy in wake of US economic resilience and RM weakness coupled with persistent foreign net selling.