US bond bulls lean into latest selloff despite inflation scare
==========

A sharp selloff in U.S. bonds prompts some investors to consider allocating more funds to lock in higher yields ahead of interest rate cuts by the Federal Reserve. Treasury yields have soared in recent weeks after solid economic data and rebounding price pressures pushed out expectations of rate cuts. Despite lower bond prices, investors see an opportunity to increase duration and benefit from potential interest rate moves. Some investors are rotating from cash to high-yielding fixed income products such as mortgages, credit, and emerging markets. Year-to-date returns on Treasuries have been negative, but investors remain optimistic about the duration trade. However, not all investors share the same view, with some expecting lower yields and a drop in allocations to bonds. Traders of futures tied to the Fed's policy rates expect less than two interest rate cuts in 2024. Confidence in easing price pressures is lower compared to the previous rally in bonds. It is considered too early to extend duration.

#UsBonds #Inflation #InterestRates #FederalReserve

https://theedgemalaysia.com/node/708937 

 Shadow banking stress in South Korea sends warning to global investors
==========

South Korea is experiencing stress in its shadow banking sector, raising concerns among global investors. Delinquency rates at Korean lenders have nearly doubled to 6.55% and 111 trillion won (US$80 billion) of project-finance debt is considered troubled. Korean shadow-bank financing to the real estate sector reached a record 926 trillion won last year. The restructuring announcement by builder Taeyoung Engineering & Construction Co. highlights the threat of flareups. The extent of the concern in Korea is reflected in the rapid policy response, including potential on-site inspections of saving banks. The government plans to speed up restructuring in the property sector. However, overall credit risks have not caused broader economic damage. The worst is yet to come for Korea's property malaise, with Citigroup economists predicting a slowdown in economic growth in the second half. Korean non-bank lenders have made significant investments in overseas commercial real estate, which have suffered in the post-Covid slump. Smaller and non-bank financial institutions are considered more vulnerable to the restructuring efforts. Global investors are closely watching the situation in South Korea's shadow banking sector as a potential warning for other economies.

#SouthKorea #ShadowBanking #RealEstate #FinancialStability #DebtRestructuring

https://theedgemalaysia.com/node/708923 

 Shadow banking stress in South Korea sends warning to global investors
==========

South Korea is experiencing stress in its shadow banking sector, raising concerns among global investors. Delinquency rates at Korean lenders have nearly doubled to 6.55% and 111 trillion won (US$80 billion) of project-finance debt is considered troubled. Korean shadow-bank financing to the real estate sector reached a record 926 trillion won last year. The restructuring announcement by builder Taeyoung Engineering & Construction Co. highlights the threat of flareups. The extent of the concern in Korea is reflected in the rapid policy response, including potential on-site inspections of saving banks. The government plans to speed up restructuring in the property sector. However, overall credit risks have not caused broader economic damage. The worst is yet to come for Korea's property malaise, with Citigroup economists predicting a slowdown in economic growth in the second half. Korean non-bank lenders have made significant investments in overseas commercial real estate, which have suffered in the post-Covid slump. Smaller and non-bank financial institutions are considered more vulnerable to the restructuring efforts. Global investors are closely watching the situation in South Korea's shadow banking sector as a potential warning for other economies.

#SouthKorea #ShadowBanking #RealEstate #FinancialStability #DebtRestructuring

https://theedgemalaysia.com/node/708923 

 'Overdue' pullback in US stocks to test dip-buyers' resolve
==========

The S&P 500 is down more than 5% from its March 28 closing high, its biggest retreat since October. The index has experienced an average of three pullbacks of 5% or more every year since 1929. Many market participants believe the factors that drove the S&P 500 to a 10% gain in the first quarter, including resilient economic growth and excitement over artificial intelligence, remain in place and will support stocks over the long term. Some investors are already buying on weakness, while others are waiting for more clarity on inflation, geopolitical tensions, and corporate earnings. The S&P 500 has seen an average maximum drawdown of 11% each time it has gained 10% or more in the first quarter. Clients of BofA sold $800 million in US equities in the latest week, the third straight week they were net sellers. Some volatility-sensitive funds that bought equities as markets marched higher have already started selling and could dump more stocks if markets grow more turbulent. Investors are also watching the level of the Cboe Volatility Index. The coming week’s earnings from Tesla, Meta Platforms, Alphabet, and Microsoft could offer support to stocks or further exacerbate the selloff. The earnings picture has been mixed so far. Investors will also focus on Friday's release of the monthly Personal Consumption Expenditures Price index, a crucial piece of inflation data before the Fed's April 30-May 1 meeting. Investors are pricing in around 40 basis points of interest rate cuts this year, compared to 150 priced in at the start of 2024.



https://theedgemalaysia.com/node/708848 

 'Overdue' pullback in US stocks to test dip-buyers' resolve
==========

The S&P 500 is down more than 5% from its March 28 closing high, its biggest retreat since October. The index has experienced an average of three pullbacks of 5% or more every year since 1929. Many market participants believe the factors that drove the S&P 500 to a 10% gain in the first quarter, including resilient economic growth and excitement over artificial intelligence, remain in place and will support stocks over the long term. Some investors are already buying on weakness, while others are waiting for more clarity on inflation, geopolitical tensions, and corporate earnings. The S&P 500 has seen an average maximum drawdown of 11% each time it has gained 10% or more in the first quarter. Clients of BofA sold $800 million in US equities in the latest week, the third straight week they were net sellers. Some volatility-sensitive funds that bought equities as markets marched higher have already started selling and could dump more stocks if markets grow more turbulent. Investors are also watching the level of the Cboe Volatility Index. The coming week’s earnings from Tesla, Meta Platforms, Alphabet, and Microsoft could offer support to stocks or further exacerbate the selloff. The earnings picture has been mixed so far. Investors will also focus on Friday's release of the monthly Personal Consumption Expenditures Price index, a crucial piece of inflation data before the Fed's April 30-May 1 meeting. Investors are pricing in around 40 basis points of interest rate cuts this year, compared to 150 priced in at the start of 2024.



https://theedgemalaysia.com/node/708848 

 'Overdue' pullback in US stocks to test dip-buyers' resolve
==========

The S&P 500 is down more than 5% from its March 28 closing high, its biggest retreat since October. The index has experienced an average of three pullbacks of 5% or more every year since 1929. Many market participants believe the factors that drove the S&P 500 to a 10% gain in the first quarter, including resilient economic growth and excitement over artificial intelligence, remain in place and will support stocks over the long term. Some investors are already buying on weakness, while others are waiting for more clarity on inflation, geopolitical tensions, and corporate earnings. The S&P 500 has seen an average maximum drawdown of 11% each time it has gained 10% or more in the first quarter. Clients of BofA sold $800 million in US equities in the latest week, the third straight week they were net sellers. Some volatility-sensitive funds that bought equities as markets marched higher have already started selling and could dump more stocks if markets grow more turbulent. Investors are also watching the level of the Cboe Volatility Index. The coming week’s earnings from Tesla, Meta Platforms, Alphabet, and Microsoft could offer support to stocks or further exacerbate the selloff. The earnings picture has been mixed so far. Investors will also focus on Friday's release of the monthly Personal Consumption Expenditures Price index, a crucial piece of inflation data before the Fed's April 30-May 1 meeting. Investors are pricing in around 40 basis points of interest rate cuts this year, compared to 150 priced in at the start of 2024.



https://theedgemalaysia.com/node/708848 

 'Overdue' pullback in US stocks to test dip-buyers' resolve
==========

The S&P 500 is down more than 5% from its March 28 closing high, its biggest retreat since October. The index has experienced an average of three pullbacks of 5% or more every year since 1929. Many market participants believe the factors that drove the S&P 500 to a 10% gain in the first quarter, including resilient economic growth and excitement over artificial intelligence, remain in place and will support stocks over the long term. Some investors are already buying on weakness, while others are waiting for more clarity on inflation, geopolitical tensions, and corporate earnings. The S&P 500 has seen an average maximum drawdown of 11% each time it has gained 10% or more in the first quarter. Clients of BofA sold $800 million in US equities in the latest week, the third straight week they were net sellers. Some volatility-sensitive funds that bought equities as markets marched higher have already started selling and could dump more stocks if markets grow more turbulent. Investors are also watching the level of the Cboe Volatility Index. The coming week’s earnings from Tesla, Meta Platforms, Alphabet, and Microsoft could offer support to stocks or further exacerbate the selloff. The earnings picture has been mixed so far. Investors will also focus on Friday's release of the monthly Personal Consumption Expenditures Price index, a crucial piece of inflation data before the Fed's April 30-May 1 meeting. Investors are pricing in around 40 basis points of interest rate cuts this year, compared to 150 priced in at the start of 2024.



https://theedgemalaysia.com/node/708848 

 No social media accounts for children under 13, says Fahmi
==========

The Malaysian Communications and Multimedia Commission (MCMC) has reminded parents to ensure that their children under 13 do not own any social media accounts. Communications Minister Fahmi Fadzil said the commission found that it is not appropriate for children under 13 to use any social media. Most social media platforms do not permit teens of such age to sign up for an account. Fahmi warned parents that children under 13 are not permitted to own TikTok, Facebook, Instagram, or any other social media accounts. The MCMC will shut down any accounts found to be owned by children under 13. Fahmi stated that social media platforms currently do not have a way to verify the age of users during account registration. The Ministry of Communications has held meetings with social media platforms, including Meta (owner of Facebook, Instagram, and WhatsApp) and Telegram, to discuss plans to address the ownership of social media accounts by children under 13. An announcement regarding online safety for children is expected in early May.



https://theedgemalaysia.com/node/708812 

 No social media accounts for children under 13, says Fahmi
==========

The Malaysian Communications and Multimedia Commission (MCMC) has reminded parents to ensure that their children under 13 do not own any social media accounts. Communications Minister Fahmi Fadzil said the commission found that it is not appropriate for children under 13 to use any social media. Most social media platforms do not permit teens of such age to sign up for an account. Fahmi warned parents that children under 13 are not permitted to own TikTok, Facebook, Instagram, or any other social media accounts. The MCMC will shut down any accounts found to be owned by children under 13. Fahmi stated that social media platforms currently do not have a way to verify the age of users during account registration. The Ministry of Communications has held meetings with social media platforms, including Meta (owner of Facebook, Instagram, and WhatsApp) and Telegram, to discuss plans to address the ownership of social media accounts by children under 13. An announcement regarding online safety for children is expected in early May.



https://theedgemalaysia.com/node/708812 

 Trade tensions threaten rise of China’s stock champions
==========

China's most-promising industries, including electric vehicles, wind and solar projects, medical devices, and chips, are facing growing trade restrictions from Western governments. These sectors are of strategic importance to President Xi Jinping's bid for leadership in the global race toward green transition and high-tech development. The rising tensions come at a time when stocks were starting to emerge from a multi-year slump as investors bought into China's efforts to build new growth engines and achieve self-sufficiency along key supply chains. The materialization of these threats can hinder China's global expansion and may lead to a full-blown trade war. The biggest Chinese firms that get at least a fifth of their revenue from exports command more than a 14% weight in the CSI 300. Recent months have seen tensions worsen, with the European Union joining US-styled protectionist moves. The focus is now on which sector will be targeted next, with electric vehicles being a key target so far. The unpredictable nature of geopolitical tensions increases the risk of investing in Chinese stocks, which many were already avoiding due to regulatory uncertainties and a slowing economy.

#China #TradeTensions #StockMarket #StrategicIndustries #ElectricVehicles #GreenTransition #HightechDevelopment

https://theedgemalaysia.com/node/708734 

 Ringgit likely to trade around 4.78 versus greenback next week
==========

The ringgit is likely to trade around 4.78 against the US dollar next week. The situation in the Middle East will continue to be under scrutiny by investors, and any escalation in tension would result in a higher demand for the US dollar. The Federal Reserve's favorite inflation gauge, the personal consumption expenditures (PCE) price index, will also be watched. Stable growth prospects and authorities' continued support might help keep the ringgit stable. On April 15, Bank Negara Malaysia said it stood ready to deploy tools to ensure the Malaysian financial markets remain orderly. The ringgit depreciated to 4.7810/7855 versus the greenback compared with 4.7680/7730 a week earlier. Malaysia's economy was forecast to have grown by 3.9% in 1Q2024. The ringgit traded higher against Asean currencies except for the Singapore dollar.



https://theedgemalaysia.com/node/708707 

 The Week Ahead: Eyes on March inflation, US 1Q GDP and tech earnings
==========

The Department of Statistics Malaysia (DOSM) will release the Consumer Price Index (CPI) data for March on Thursday. Inflation in February was 1.8% year on year (y-o-y), higher than expected. Core inflation remained steady at 1.8% y-o-y. Bank Negara Malaysia will release its latest data on Monday. The 1MDB-Tanore criminal trial involving former prime minister Datuk Seri Najib Razak continues. Bank Indonesia will announce its policy rate decision on Wednesday. South Korea will release its 1Q gross domestic product (GDP) on Thursday. China will release industrial profits for March on April 27. The Bank of Japan will announce its monetary policy decision on April 26. Australian and New Zealand stock markets will be closed on April 25 for Anzac Day.

#Inflation #Gdp #TechEarnings #EconomicIndicators #ConsumerPriceIndex #BankNegaraMalaysia #1mdbtanoreTrial #BankIndonesia #SouthKoreaGdp #ChinaIndustrialProfits #BankOfJapanMonetaryPolicy #AnzacDay

https://theedgemalaysia.com/node/708696 

 US bank reserve balances see largest drop since 2022 tax season
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The amount of reserves in the US banking system dropped by the most in two years as Americans paid income tax bills out of their bank accounts. Bank reserves totalled US$3.33 trillion in the week through April 17 from US$3.62 trillion the prior week, a decline of US$286 billion. This is the largest drop since the April 2022 tax deadline. The level of reserves is closely monitored by market participants and policymakers to gauge liquidity and potential impacts on financial markets. As reserves approach a level estimated to be between US$3 trillion and US$3.25 trillion, the Federal Reserve may need to consider altering its balance-sheet unwind. The current level of reserves is considered abundant, but policymakers aim for a slightly lower level. The Fed may need to slow the pace of runoff soon. If reserves shrink too much, it risks volatility in overnight funding markets. However, too many reserves consume bank capital and inhibit lending. Scarcity of reserves has caused problems in the past, such as in September 2019 when demand for liquidity surged and overnight funding markets experienced volatility.

#UsBankReserves #FederalReserve #BalancesheetUnwind #Liquidity #FinancialMarkets

https://theedgemalaysia.com/node/708565 

 US Bancorp shares fall as lending-income guidance trimmed
==========

US Bancorp reduced its outlook for net interest income (NII) to $16.1 billion to $16.4 billion this year, down from the previous guidance of $16.6 billion or more. The trend of customers shifting funds to interest-bearing accounts from those that don't pay interest hasn't slowed as quickly as expected. Shares of US Bancorp fell 3.6% to $39.53 after the announcement. The bank expects NII to be stable in the second quarter and start growing in the second half of the year. The reduction in guidance was disappointing to analysts and may weigh on the stock in the near term. US Bancorp is one of the largest lenders in the country with over $600 billion in assets.

#UsBancorp #NetInterestIncome #LendingincomeGuidance #Banking

https://theedgemalaysia.com/node/708463 

 Citi says Wall Street wrong to slash Fed rate-cut bets
==========

Economists at Citigroup Inc are sticking by their forecast for five-quarter point cuts this year, despite other banks dialing back their forecasts for interest-rate cuts. Citigroup believes the Fed remains concerned about economic growth stalling and is eager to seize on any signs of disinflation or economic weakness. The bank's forecast contrasts with the broader sentiment in financial markets, where bond yields surged after last week's consumer price index report. Citigroup's economists believe upcoming readings of the core personal consumption expenditures index will show some cooling of price pressure, giving the Fed cover to begin adjusting policy rates lower starting in June or July. They also expect the Fed to give more weight to signs of economic weakness than to data showing continued strength.



https://theedgemalaysia.com/node/708442 

 Indonesia's plunging rupiah twists the policy plot
==========

The Indonesian rupiah has plunged to a four-year low against the dollar, complicating monetary policy for Bank Indonesia. The currency's decline may force the central bank to raise rates as early as next week. Bank Indonesia has been using various intervention tools to stabilize the rupiah, but a rate hike may be necessary to support the currency. The rupiah's high yields have historically attracted investors, but its appeal has waned due to currency volatility and narrow spreads. Foreigners now hold just 14% of Indonesian government securities, compared to 25% in December 2020. Bank Indonesia has spent $6 billion in the first quarter to support the rupiah. However, the central bank may be running out of options as expectations for Fed rate cuts recede. Some investors are betting on eventual Fed rate cuts later this year to provide relief for the rupiah. Bank of America's economist has pushed out expectations for Bank Indonesia's first rate cut to December from June. The central bank may surprise the market with a rate hike to address inflation risks from imported inflation and energy.



https://theedgemalaysia.com/node/708375 

 US 30-year mortgage rate rises to four-month high of 7.13%
==========

The contract rate on a 30-year fixed mortgage rose 12 basis points to 7.13% in the week ended April 12, according to Mortgage Bankers Association data. The effective rate, which includes fees and compound interest, increased to 7.32%. Purchase activity stabilised last week with a 5% increase in the group's index of mortgage applications for home purchases. Mortgage rates are at risk of rising further based on the 10-year Treasury yield. Federal Reserve chair Jerome Powell said that the latest US inflation readings indicate that it will take longer for the central bank to lower its benchmark interest rate, which will likely keep mortgage rates elevated and temper housing demand. MBA's overall index of applications rose 3.3% last week, with the refinancing gauge edging higher.



https://theedgemalaysia.com/node/708367 

 IMF says US, China debts pose risks to global public finances
==========

The International Monetary Fund (IMF) warns that the US and China will drive the increase in global public debt over the next five years. Both countries are projected to nearly double their public debt by 2053. The IMF states that how these two economies manage their fiscal policies will have profound effects on the global economy and pose risks to other economies. The high and uncertain interest rates in the US make it difficult for many countries by strengthening the value of the US dollar and increasing debt burdens. The IMF also warns of risks from a larger-than-expected slowdown in China, which could impact international trade, external financing, and investments. The report projects a decline in overall primary deficits but notes substantial risks to public finances in many countries. The IMF highlights that this year, voters in 88 economies representing over half of the world's population and GDP will go to the polls, making it a challenging year for fiscal policy. 



https://theedgemalaysia.com/node/708326 

 Bank of America profit hurt by losses on credit cards, office loans
==========

Bank of America's first-quarter profits shrank as the bank set aside more money to cover souring loans from consumers. The bank's net charge-offs rose to $1.5 billion from $807 million a year earlier, mainly from credit card losses. The bank's net interest income slid 3% to $14 billion. Bank of America CEO Brian Moynihan said the bank had cut the workforce by more than 4,700 employees. Investment banking fees jumped 35% to $1.6 billion. Revenue from the consumer unit sank 5% to $10 billion. Profit from the Merrill wealth management division rose about 10% to $1 billion.

#BankOfAmerica #CreditCards #OfficeLoans #Profits #NetChargeoffs #NetInterestIncome #InvestmentBankingFees #ConsumerUnit #MerrillWealthManagementDivision

https://theedgemalaysia.com/node/708253 

 Bank of America profit hurt by losses on credit cards, office loans
==========

Bank of America's first-quarter profits shrank as the bank set aside more money to cover souring loans from consumers. The bank's net charge-offs rose to $1.5 billion from $807 million a year earlier, mainly from credit card losses. The bank's net interest income slid 3% to $14 billion. Bank of America CEO Brian Moynihan said the bank had cut the workforce by more than 4,700 employees. Investment banking fees jumped 35% to $1.6 billion. Revenue from the consumer unit sank 5% to $10 billion. Profit from the Merrill wealth management division rose about 10% to $1 billion.

#BankOfAmerica #CreditCards #OfficeLoans #Profits #NetChargeoffs #NetInterestIncome #InvestmentBankingFees #ConsumerUnit #MerrillWealthManagementDivision

https://theedgemalaysia.com/node/708253 

 IMF steps up its warning to US over spending and ballooning debt
==========

The International Monetary Fund (IMF) has criticized US policymakers for their unsustainable fiscal policy, stating that the country's recent strong economic performance is driven by a fiscal stance that is out of line with long-term fiscal sustainability. The IMF warns that Washington's overspending risks reigniting inflation and undermining global fiscal and financial stability. US deficit spending has been fueled by Covid-related stimulus, investments in infrastructure and clean energy, and rising interest costs. Debt held by the public is projected to reach $45.7 trillion, or 114% of GDP by 2033. Treasury Secretary Janet Yellen has downplayed concerns, stating that debt sustainability should be measured by the cost to service debt as a percentage of GDP, adjusted for inflation. However, Yellen acknowledges that this forecast is vulnerable if interest rates remain elevated.



https://theedgemalaysia.com/node/708208 

 Big banks led by Citi continue layoffs amid pressure to cut costs
==========

US banking giants, including Citigroup, Bank of America, Wells Fargo, and PNC Financial, have continued to lay off employees in the first quarter of 2024. Citigroup saw the biggest drop, with a decline of 2,000 employees after completing a reorganization aimed at improving profits and reducing management layers. The layoffs were part of a broader goal to reduce Citi's staffing by 20,000 over the next two years. Bank of America's headcount has fallen by more than 4,700 since the first quarter of 2023. However, JPMorgan Chase went against the trend and added nearly 2,000 employees in the first quarter. The layoffs are driven by pressure to control costs due to the uncertain economic outlook and the need to navigate the changing rate environment. Higher funding costs, contracting net interest margins, and uneven trading results are likely to keep banks cautious. Investment banks, on the other hand, have brought in higher revenue, fueled by a revival in capital markets. Goldman Sachs and Morgan Stanley saw reductions in headcount, but executives are optimistic that a surge in equity offerings will lift sentiment and spur mergers and acquisitions.

#Banking #Layoffs #Costcutting #EconomicOutlook

https://theedgemalaysia.com/node/708202 

 US Treasury cash balance jumps most in two years as tax payments rise
==========

The US Treasury's cash balance surged by $172 billion to $897 billion on Monday, the highest since May 2022. Taxpayers are expected to owe more this year due to higher incomes and a booming stock market. Treasury collected roughly $63.5 billion in corporate taxes, $86.6 billion in non-withheld individual electronic payments, and $4.66 billion in non-withheld individual "other" payments. To date, Treasury has collected roughly $290 billion in tax-related income this month.



https://theedgemalaysia.com/node/708191 

 Dow up on UnitedHealth boost; higher bond yields, Mideast tensions cap gains
==========

The Dow Jones Industrial Average rose on Tuesday, driven by positive results from health insurer UnitedHealth. UnitedHealth Group's stock advanced 5.9% after beating expectations for first-quarter adjusted profit. Other health insurers such as Humana, CVS Health, and Centene also saw gains. Morgan Stanley rose 2.4% after beating first-quarter profit estimates. The market is searching for a bottom from its recent sell-off. Conflict in the Middle East and higher Treasury yields kept investors on edge. Israel's war cabinet was set to meet to decide on a response to Iran's first-ever direct attack. The yield on the 10-year government bond hit fresh five-month highs. US retail sales increased more than expected in March, indicating a solid first quarter for the US economy. Several policymakers, including Federal Reserve Chair Jerome Powell, are slated to speak later in the day. Rate-sensitive real estate and utilities led sectoral declines. The Dow Jones Industrial Average was up 0.23% at 37,822.67, the S&P 500 was down 0.26% at 5,048.56, and the Nasdaq Composite was down 0.30% at 15,837.84. Tesla fell 3.7% after an internal memo revealed layoffs. Johnson & Johnson slipped 2.0% as its first-quarter revenue missed estimates. Declining issues outnumbered advancers on both the NYSE and Nasdaq. The S&P index recorded no new 52-week highs and six new lows, while the Nasdaq recorded nine new highs and 189 new lows.

#DowJonesIndustrialAverage #Unitedhealth #HealthInsurers #MorganStanley #MiddleEast #TreasuryYields #Israel #Iran #UsRetailSales #FederalReserve #Tesla #Johnson&Johnson

https://theedgemalaysia.com/node/708174 

 El-Erian says world ‘frozen’ by strong dollar, high US rates
==========

Policymakers around the world are struggling to confront a surging greenback and lofty US interest rates, according to Mohamed El-Erian. El-Erian, the president of Queens’ College, Cambridge and a Bloomberg Opinion columnist, said that authorities are unsure how to react to a generalised dollar strengthening and a generalised increase in US interest rates. In the past, when these two factors have gone too far, they have broken something elsewhere. El-Erian cited the yen’s plunge below the 154 per dollar mark as an example of inaction from Japanese policymakers. He believes that sectors with imbalanced balance sheets and countries with unsustainable debt are the most exposed to the impact of tighter financial conditions. El-Erian also stated that while the likelihood of the Fed hiking interest rates is low, it is not zero. If inflation worsens, a rate hike could lead to a regional banking crisis and damage in the marketplace.



https://theedgemalaysia.com/node/708164 

 Biden once rejected Trump’s migrant policies but now echoes them
==========

Joe Biden came into office in 2021 vowing to undo Donald Trump’s harsh policies on the US’s southern border and work with governments across Central America to reduce the motivations for their citizens to head north. However, record flows of migrants have overwhelmed the system, leading Biden to consider further restricting migrants' ability to claim asylum, echoing some of the Trump-era policies. The Biden administration blames Congress for failing to approve its aid plan for the region and failing to deliver on reforms needed to handle the large numbers of people seeking to move to the US. The administration's diplomatic push across the region has had mixed results, with Mexico deporting fewer migrants and South American countries surpassing the Northern Triangle as the largest source of migrants. The administration is aware of the political risks of surging migration but believes its more humane approach on the border has changed migrants' perceptions. The Biden administration's efforts to ease poverty, violence, and misrule in Central America have had limited success, with many migrants still believing the border offers their best chance of reaching the US.



https://theedgemalaysia.com/node/708119 

 Morgan Stanley sees US Fed cut delay pushing back easing in Asia
==========

Most central banks across Asia are likely to begin cutting interest rates later in the year — if at all, according to economists at Morgan Stanley. Central bank policymakers in China, South Korea, Indonesia, the Philippines, and Taiwan are set to postpone rate cuts, while India and Malaysia hold rates for the rest of the year. The delay in the Federal Reserve's policy easing has influenced the outlook for Asian central banks. The odds of rate cuts globally are waning as data points to ongoing inflation pressures in the US. Asian central banks are unlikely to lower rates ahead of the Fed to protect their currencies. Overall aggregate real rates will likely stay about 30 basis points above pre-Covid levels through at least the first quarter of 2025. Risks to the forecast include surging oil prices and further inflationary pressure.



https://theedgemalaysia.com/node/708082 

 Indonesian rupiah hits four-year low, prompts cenbank intervention
==========

The Indonesian rupiah weakened to its weakest level in four years, reaching 16,200 per US dollar, prompting the central bank to intervene. The decline was influenced by the US dollar gaining strength due to strong US economic data and rising inflation. Bank Indonesia is taking steps to maintain rupiah stability through triple interventions, including maintaining supply-demand balance in the foreign exchange market and boosting the attractiveness of rupiah-denominated assets. The benchmark stock index also weakened, dropping 3.02% before recovering some losses. The yield of the benchmark 10-year bonds rose to 6.83%, the highest since November 2023.



https://theedgemalaysia.com/node/708051 

 'Low price' is the word at China's largest trade show
==========

Foreign buyers will attend China's 135th Canton Fair, where the keyword will be 'low price'. China's shift towards its manufacturing complex and away from its property sector is causing concern in the US and EU. The fair will showcase China's efforts to move up the value chain. The majority of factories in the 'new three' industries of electric vehicles, batteries, and solar energy are less sophisticated, and depressed domestic demand leaves them reliant on foreign buyers. The fair is expected to attract around 93,000 foreign buyers and 28,600 exhibitors. Deals worth US$22.3 billion were signed at the last Canton Fair. The lower numbers may reflect a drop in value rather than volume due to producer price deflation in China. The fair is seen as a contradiction between developed countries' government preferences and micro-level business priorities.

#China #TradeShow #CantonFair #LowPrice #Manufacturing #Exports

https://theedgemalaysia.com/node/707899 

 Clobbered Fed rate cut bets wipe out even last year’s bond gains
==========

Investors who expected an extension of last year's global bond gains have been disappointed as expectations of higher US interest rates have wiped out the 4.2% return on global sovereign debt from 2023. The decline in bond prices has been driven by investors now expecting under two Fed interest rate cuts this year, a significant backtrack from earlier bets of more than 150 basis points of easing starting in March. The selloff has room to run as the US inflation print this week sent yields surging across the curve. However, some believe there is scope for bonds to recoup their losses when the Fed begins easing, and investors may be looking to buy on dips. Sticky US inflation remains a concern for bond investors, and some predict further declines in bond prices.



https://theedgemalaysia.com/node/707734 

 US plans chip, nickel deals in Philippines as defence ties grow
==========

The US plans to support infrastructure, semiconductor, and nickel processing projects in the Philippines as part of their growing investment partnerships. This comes as the Philippines strengthens economic ties with the US and Japan amid strained relations with China. The US, Philippines, and Japan will accelerate investments on the Luzon Economic Corridor, focusing on rail and port modernization, clean energy, semiconductor supply chains, agribusiness, and civilian port upgrades. The US will also support a grant to Eramen Minerals Inc for the development of an ore-to-nickel and cobalt processing plant. United Parcel Service Inc will expand its operations in Clark, and the US military will have access to Philippine bases under the Enhanced Defense Cooperation Agreement. The US Agency for International Development will launch a humanitarian relief initiative at one of the sites for the Philippines' civilian disaster response. Cooperation between the US and Philippines in the South China Sea has reached historic levels.

#Us #Philippines #Investment #DefenseTies #Infrastructure #Semiconductor #NickelProcessing #LuzonEconomicCorridor #China #SouthChinaSea

https://theedgemalaysia.com/node/707699 

 Fed officials in no rush to cut rates as inflation worries rise
==========

Federal Reserve (Fed) officials, including New York Fed president John Williams and Boston Fed president Susan Collins, are saying there is no rush to cut interest rates due to concerns about rising US inflation. Williams stated that there is no clear need to adjust monetary policy in the near term, while Collins mentioned that recent data suggests it may take more time to gain confidence in inflation's downward trajectory. The officials believe that rate cuts will be needed eventually, but the anticipated start of an easing cycle has been pushed further down the road. In Europe, central bankers left the policy rate unchanged but signaled they remain on track to cut rates as soon as June. However, sources suggest that the European Central Bank (ECB) could pause after June to await more clarity from the Fed on its rate decisions. International Monetary Fund chief Kristalina Georgieva expressed concern that higher US interest rates are not great news for the rest of the world. US consumer price index (CPI) data came in stronger than expected in March, leading to a resetting of expectations for when the Fed will be able to cut rates this year.

#FederalReserve #InterestRates #Inflation #UsEconomy #EuropeanCentralBank #MonetaryPolicy

https://theedgemalaysia.com/node/707690 

 US core CPI tops forecasts again, likely delaying Fed rate cuts
==========

The US core consumer price index (CPI) increased 0.4% from February, holding steady at 3.8% from a year ago, likely delaying any Federal Reserve (Fed) interest-rate cuts until later in the year. The overall CPI climbed 0.4% from the prior month and 3.5% from a year ago, boosted by higher energy prices. The report suggests that progress on taming inflation may be stalling, despite the Fed keeping interest rates at a two-decade high. Treasury yields and the dollar jumped, while S&P 500 index futures tumbled. Swaps traders lowered their expectations of Fed rate cuts this year. The core CPI over the past three months increased an annualized 4.5%, the most since May. Gasoline and shelter accounted for over half of the overall monthly advance. Shelter prices rose 0.4% for a second month. Excluding housing and energy, services prices accelerated to 4.8% from a year ago, the most since April 2023. The Fed's preferred inflation metric, the personal consumption expenditures (PCE) price index, is trending closer to the 2% target. Fed officials have ruled out a rate cut at their next policy meeting on May 1.



https://theedgemalaysia.com/node/707624 

 Asean balance sheets appear to hold up 'very well' amid US liquidity tightening pressure, says Eastspring portfolio manager
==========

The balance sheet of Asean economies, including Malaysia, has held up well in withstanding pressures from the US liquidity tightening process over the past two years. When the expected interest rate cut by the US Federal Reserve takes place, the Asean economies are set to shine given their resilient balance sheet and attractive valuations. Historically, Asean economies tend to perform poorly whenever the US Fed raises interest rates, but this time they have held up well. The Chinese market appears to have bottomed with signs of recovery showing up, particularly in the manufacturing sector and nascent signs of consumption recovery.

#Asean #UsLiquidityTightening #InterestRates #BalanceSheets #ChinaMarket #Recovery

https://theedgemalaysia.com/node/707559 

 ECB-Fed split in rate policy fuels talk of euro sliding to parity with dollar
==========

Policymakers at the European Central Bank (ECB) are expected to deliver more interest-rate cuts this year than their US peers, leading to talk of the euro touching parity with the dollar. Bank of America Corp (BofA) and Germany’s LBBW are warning of euro weakness if the differing pace of rate cuts at the ECB and the US Federal Reserve play out. The euro could touch parity with the dollar this year, according to Geoffrey Yu, a senior strategist at Bank of New York Mellon. ECB officials led by president Christine Lagarde are expected to prepare markets for an initial rate cut on June 6. The euro is down almost 2% this year at US$1.09. Strategists at BofA are weighing scenarios where the euro returns to parity against the greenback if the Fed stands pat on rates this year and the ECB delivers three quarter-point cuts. Every extra cut the ECB delivers relative to the Fed can trigger a 1% move in the euro-dollar exchange rate. Options markets imply only about a 15% chance of the euro reaching parity with the dollar over the next 12 months.

#Ecb #FederalReserve #InterestRates #Euro #Dollar

https://theedgemalaysia.com/node/707551 

 The US and its allies face a US$10 tril reckoning in the race to rearm
==========

A new era of global rearmament is underway, with the US and its allies facing a potential $10 trillion in additional commitments over the next decade. European Union nations are considering increasing their defense spending to as high as 4% of their GDP, in order to meet the North Atlantic Treaty Organization's (NATO) targets. The aggressive actions of Russia and the expansion of the Chinese military are driving the need for increased defense capabilities. The US, already allocating 3.3% of its GDP on defense, would see its borrowings increase to 131% from 99% over the next decade if it pushed its military budget to 4%. The implications of increased defense spending include potential fiscal challenges, such as deeper levels of borrowing, significant budget cuts, or tax increases. The surge in military budgets is a global phenomenon, with China's defense spending projected to grow by 7.2% in 2024. The question of how to reconcile increased defense commitments with finite tax revenues and growing welfare and health needs is becoming a pressing political issue. NATO members are unlikely to agree to a firm commitment to spend 4% of GDP on defense in the near future. The issuance of jointly-backed euro bonds is a potential financing option, but higher interest rates could increase debt servicing charges. The opposition to joint bond issuance from fiscal hawks in wealthier nations like Germany adds to the complexity of the discussions. NATO's plan includes overhauling its defenses, increasing troop readiness, and investing in new technologies to maintain an advantage over Russia. The alternative to increased defense spending is also a consideration, as failing to spend the money could have negative consequences for countries, economies, and investors.



https://theedgemalaysia.com/node/707525 

 Gold extends record rally amid speculative buying, geopolitical tensions
==========

Gold prices extended their record rally, reaching a high of US$2,353.79 per ounce, supported by speculative buying and geopolitical tensions in the Middle East. The rally is driven by strong central bank buying, safe-haven inflows, and demand from momentum-following funds. Despite strong US job growth in March, lower interest rates reduce the opportunity cost of holding gold. Analysts expect the market to test US$2,400, but anticipate bearish volatility to shake out some bulls. Gold demand in India remained tepid due to high domestic prices, while premiums held firm in China. Spot silver rose 1.4% to US$27.85 per ounce, platinum edged 0.1% higher at US$928.11, and palladium gained 0.4% at US$1,006.88.

#Gold #RecordRally #SpeculativeBuying #GeopoliticalTensions #UsJobGrowth #InterestRates #India #China #Silver #Platinum #Palladium

https://theedgemalaysia.com/node/707333 

 Solutions: Emerging technologies shaping the future of social enterprise
==========

The global impact of social enterprises is significant and transformative. There are about 10 million social enterprises globally, contributing US$2 trillion annually to the world economy and supporting about 200 million jobs. Women lead half of these enterprises. The Malaysian government supports social enterprises but the sector is still developing. Technology adoption presents opportunities for social enterprises to create innovative solutions and scale up operations. Emerging technologies like AI, ML, blockchain, and IoT are reshaping the sector. SOLS Energy is a Malaysian social enterprise that harnesses solar technology and digital platforms. Funding gap of US$1.1 trillion is a barrier to technological advancement. The government and GLICs and GLCs support social enterprises through funding schemes and initiatives. Policymakers can encourage technology transfer and open innovation to enhance efficiency and impact. Enhancing support for impact investing and patient capital is essential. Integrating emerging technologies with Malaysia's social enterprise sector can lead to transformative impact and growth.

#SocialEnterprise #Technology #EmergingTechnologies #Ai #Ml #Blockchain #Iot #Funding #GovernmentSupport #SolsEnergy #Innovation #ImpactInvesting #PatientCapital

https://theedgemalaysia.com/node/707173 

 US Fed on track to cut rates in June, Morgan Stanley’s Zentner says
==========

The US Federal Reserve is expected to cut interest rates in June, according to Ellen Zentner, chief US economist at Morgan Stanley. Zentner believes that the market's expectation of about three cuts this year is in line with the Fed's view. However, she expects four cuts in total, with the fourth quarter seeing an acceleration of rate cuts due to inflation coming down faster than the Fed. Nouriel Roubini, chairman of Roubini Macro Associates, highlighted that markets are now less optimistic on rate cuts than the Fed, as they consider the possibility of higher inflation due to factors such as higher-than-expected growth or geopolitical risks impacting inflation.



https://theedgemalaysia.com/node/707149 

 Saudi Crown Prince MBS’s US$100 bil foreign investment quest falters
==========

Saudi Arabia's attempt to attract foreign investment for its Vision 2030 economic transformation plan is facing challenges. The country aims to achieve $100 billion of foreign direct investment (FDI) annually by 2030, but preliminary data for 2023 shows FDI below target at $19 billion. Foreign investors remain cautious due to unclear and untested laws governing contracts and investment in Saudi Arabia. The government is considering self-funding a larger portion of its economic remake and has started cutting back on megaprojects. The Public Investment Fund (PIF) has provided financial support to companies like Lucid Group Inc, which is increasingly relying on Saudi money to stay in business. The PIF, which is the top shareholder of Lucid, has already invested $5.4 billion in the company. The government's reliance on oil riches to entice firms and fund its diversification plans is evident, as it recently gave the PIF an additional $164 billion stake in Saudi Aramco. However, the PIF is feeling the pinch, with just $15 billion in cash reserves as of September. The kingdom may advocate longer production curbs by OPEC+ to sustain oil prices, but prices remain below what is needed to balance the budget and fund the grand ambitions of Crown Prince Mohammed Salman.

#SaudiArabia #ForeignInvestment #Vision2030 #PublicInvestmentFund #LucidGroupInc #Oil #Economy

https://theedgemalaysia.com/node/707147 

 Dalio defends his decades-long investment in China
==========

Ray Dalio, founder of Bridgewater Associates, defended his decades-long investment in China and expressed his commitment to not abandon the country despite the identified problems and risks. In a LinkedIn post, Dalio stated that his relationship with the Chinese people and culture has led him to love them, and he believes being involved with them and their markets is essential. He emphasized that he doesn't engage in fair-weather investing and remains committed even during challenging times. Dalio previously discussed the difficulties China faces and urged Beijing to address its debt and monetary policy. He believes China's problems are manageable if its leaders act smartly and courageously. Dalio also mentioned the possibility of quantitative easing and debt restructuring in China. While he acknowledges the risk of conflict between the US and China, he continues to do business with China and sees it as one of his core investment positions. Dalio considers China as one of his good uncorrelated return streams and adjusts his investment based on assessments of various factors.



https://theedgemalaysia.com/node/706935 

 Asian stocks slump, FX range-bound as Taiwan earthquake hits sentiment
==========

Emerging Asian stocks fell after Taiwan experienced a 7.2-magnitude earthquake, causing concerns about disruptions to the chip-making industry. Taiwan's benchmark index ended lower, and shares of Taiwan Semiconductor Manufacturing Co slumped 1.3% after some facilities were evacuated. Stocks in Seoul, Manila, Singapore, and Jakarta also fell. Singapore Telecommunications fell nearly 4% after confirming no impending deal to divest its Australian telecom unit. The dollar remained strong, with the dollar index steady at 104.78. The yen traded at 151.67 per dollar, and the Philippine peso slipped 0.3%. Thailand's cabinet approved a plan to raise its budget deficit next year. Oil prices edged higher due to geopolitical tensions and a larger-than-expected fall in US crude inventories. Chile's central bank cut its key interest rate by 75 basis points to 6.50%.

#AsianStocks #TaiwanEarthquake #Fx #ChipmakingIndustry #Dollar #Yen #PhilippinePeso #Thailand #OilPrices #Chile

https://theedgemalaysia.com/node/706834 

 Malaysia’s market potential drives continued US investments — Ambassador
==========

The United States Ambassador to Malaysia, Edgard D Kagan, expressed confidence in the continued investments of American firms in Malaysia, citing the country's market potential and integration into global trade networks as key factors. He highlighted the enduring economic partnership between the US and Malaysia, emphasizing the significant investments and job opportunities generated by American companies in the region. Kagan also emphasized Malaysia's participation in the Indo-Pacific Economic Framework (IPEF) and its role in shaping international trade norms and standards. The IPEF includes 14 countries in the Indo-Pacific region and was set up under US President Joe Biden's administration to address long-term economic issues. Malaysia has seen additional flows of investment from American companies since the announcement of the IPEF. The US is the top investor in Malaysia, with over RM150 billion worth of foreign direct investments (FDIs) since 2021.



https://theedgemalaysia.com/node/706535 

 The Week Ahead: Upper house to debate supplementary budget proposal
==========

Parliament's upper house will debate the supplementary budget proposal for 2023, requesting RM23.48 billion from the consolidated fund. The largest allocation will go to Treasury General Services, followed by Contribution to Statutory Fund and the Ministry of Education. The upper house will also discuss 10 amendments to the Police Act 1967, including the establishment of the role of honorary commissioner-in-chief of the Royal Malaysian Police. The Election Commission will set the dates for the Kuala Kubu Baharu state by-election. Economic data to be released includes the S&P Global Manufacturing PMI for March and preliminary first-quarter 2024 GDP data for Singapore. China will release its official March manufacturing PMI data. The Reserve Bank of India will make a monetary policy decision, and the Reserve Bank of Australia will release its March policy meeting minutes. Inflation-related data will be released by Indonesia, South Korea, Thailand, and the Philippines. US financial results season will begin, and key economic data will be released. Key European data includes the preliminary March CPI from the eurozone and the European Central Bank's Account of March Rate Decision. Impeachment proceedings will continue in the Penang undersea tunnel project corruption trial, and the 1MDB-Tanore criminal trial will continue. A final hearing will be held for former Umno Supreme Council member Datuk Lokman Noor Adam.



https://theedgemalaysia.com/node/706391 

 BNM: Malaysia’s end-February official reserve assets at US$114.28 bil
==========

Malaysia’s official reserve assets amounted to US$114.28 billion as at end-February 2024, while other foreign currency assets stood at US$202.69 million, according to Bank Negara Malaysia (BNM). The detailed breakdown of international reserves provides forward-looking information on the size, composition, and usability of reserves and other foreign currency assets. The pre-determined short-term outflows of foreign currency loans, securities, and deposits for the next 12 months amount to US$16.33 billion. The net short forward positions amounted to US$22.59 billion as at end-February 2024. Foreign currency inflows are projected to amount to US$2.46 billion in the next 12 months. The only contingent short-term net drain on foreign currency assets is government guarantees of foreign currency debt due within one year, amounting to US$400.9 million.



https://theedgemalaysia.com/node/706331 

 JPMorgan says stocks are so crowded they may crack at any time
==========

JPMorgan Chase's chief global equity strategist, Dubravko Lakos-Bujas, warns investors that the five-month rally in US equities may come to an end unexpectedly. Lakos-Bujas encourages diversifying holdings and considering risk management. Excessive crowding in the market's best-performing stocks raises the risk of an imminent correction. Lakos-Bujas points out that flash crashes have occurred in the past due to one fund de-levering positions, causing a chain reaction. The S&P 500 Index is on track for a 10% return in the first quarter, but Lakos-Bujas sees this as a reason for concern, as many positive factors have already been priced in. He believes there are limited sources of upside surprise and more risks in the background. Looking at recent history, the rush into popular momentum stocks is typically followed by a correction. JPMorgan holds the lowest year-end target on the S&P 500 of 4,200, implying a drop of nearly 20% from the current level.

#JpmorganChase #DubravkoLakosbujas #UsEquities #S&p500Index #FlashCrashes #CrowdedStocks #RiskManagement

https://theedgemalaysia.com/node/706237 

 Areca Capital fund wins Best Equity Malaysia for seventh year in a row
==========

Areca Capital Sdn Bhd has won the Best Equity Malaysia award for the seventh consecutive year at the LSEG Lipper Fund Awards 2024. The fund house's Areca equityTRUST fund received the award in the five- and 10-year categories. CEO Danny Wong attributes the fund's success to its agile investment philosophy and emphasis on appropriate asset allocation. The fund performed well in 2023 by increasing cash holdings during peak-pessimistic levels and making sectoral calls in utilities, property, and healthcare stocks. The Areca equityTRUST fund, launched in 2007, generated a cumulative return of 5.21% over the past year, with returns of 80.41% and 170.57% over the past five and 10 years, respectively. The fund's sector allocation is primarily in construction and properties, technology, and industrial sectors. Areca Capital plans to continue its investment formula, which has proven successful over nearly two decades.

#ArecaCapital #LsegLipperFundAwards #EquityInvestment #Malaysia

https://theedgemalaysia.com/node/705429 

 Stellantis laying off about 400 US workers, citing 'unprecedented uncertainties'
==========

Chrysler parent Stellantis is laying off about 400 U.S. salaried workers, representing 2% of those jobs worldwide, effective March 31. The company aims to cut costs, boost efficiency, and ramp up electric-vehicle production plans. Stellantis offered buyouts to U.S. workers last year and plans to offer at least 25 battery-electric models in the United States by 2030. Both Ford Motor and General Motors have also cut costs and jobs recently. United Auto Workers President Shawn Fain criticized Stellantis for terminating 2,000 temporary workers, calling it 'corporate greed.'

#Stellantis #Layoffs #ElectricVehicles #Costcutting #Buyouts #Automakers #UnitedAutoWorkers

https://theedgemalaysia.com/node/705709 

 Didi Global’s revenue jumps ahead of planned Hong Kong IPO
==========

Didi Global Inc’s fourth-quarter revenue rose 55% from a year earlier, reaching 49.4 billion yuan (RM32.36 billion). For the full year, revenue climbed 37% to 192.4 billion yuan. Didi is recovering from a setback in 2021 when regulators launched a probe into its data handling and forced it to delist from the NYSE. Didi plans to have a public listing in Hong Kong this year. As of Feb 29, Didi had repurchased approximately 14.9 million ADSs for approximately US$54.4 million under its US$1 billion share-buyback program.



https://theedgemalaysia.com/node/705703 

 Oil higher on strong US demand, Fed policy in focus
==========

Oil prices rose on expectations of strong global demand, including in the US. Brent futures for May delivery rose 0.6% to $82.38 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast of strong oil demand growth globally. US crude oil inventories and fuel inventories fell last week. Analysts believe the Federal Reserve may start cutting rates in the summer despite rising US consumer prices. Capital Economics forecasts the Fed to start easing policy around June. Oil prices were under pressure in the previous session after the US Energy Information Administration raised domestic oil output forecast.

#OilPrices #UsDemand #FedPolicy #Opec #UsCrudeOilInventories #FuelInventories #FederalReserve #CapitalEconomics #UsEnergyInformationAdministration

https://theedgemalaysia.com/node/704415 

 Biden’s budget expects cooling economy, stubborn inflation
==========

The White House expects the US economy to cool in 2024 with 1.7% growth, below economists' forecast of 2.1%. President Biden's proposed budget for fiscal year 2025 assumes higher growth due to pro-growth effects of policies. The budget includes increased child tax credit, tax credit for homebuyers, higher corporate taxes, and a minimum tax rate of 25% for billionaires. Inflation is expected to average 2.9% in 2024, and unemployment is projected to rise to 4% this year and next. The administration expects borrowing costs to average 5.1% for three-month Treasury bills and 4.4% for 10-year notes in 2024. The US will pay $4.7 trillion in real net interest from 2025 to 2034, squeezing other programs in the federal budget. The White House projects annual fiscal deficits above $1.5 trillion over the next decade, with a deficit as a share of GDP averaging 4.6% from 2025 to 2034.



https://theedgemalaysia.com/node/704278 

 The Week Ahead: Appeal verdict on Kevin Morais’ murder; Malaysia’s IPI, US CPI in the spotlight
==========

The local economic calendar turns light this week, with Malaysia’s industrial production figures for January due on Tuesday. Singapore’s 4Q2023 final labour market report will be released on Thursday. China is set to announce its February consumer price index (CPI) and producer price index (PPI) data on March 9. India’s February CPI figures are due on Tuesday, and its trade deficit is expected to worsen. Indonesia will unveil its trade data on Friday, and its trade surplus in February is likely to fall. The US CPI data for February will be released on Tuesday. The Court of Appeal’s verdict on the appeal by the six men sentenced to death for killing Deputy Public Prosecutor Datuk Anthony Kevin Morais eight years ago will be announced on Thursday. The hearing of SRC International Sdn Bhd’s US$1.18 billion civil suit against Datuk Seri Najib Razak continues on Monday. Petroliam Nasional Bhd will announce its 4Q and full year 2023 financial results.

#EconomicCalendar #IndustrialProduction #Cpi #Ppi #TradeData #CourtVerdict #CivilSuit #FinancialResults

https://theedgemalaysia.com/node/704021 

 Analysts see ringgit strengthening against US dollar this year
==========

The ringgit is expected to strengthen this year, supported by the upbeat domestic economy and the readjustment of the US interest rate. MIDF Research highlights that as a net commodity exporter, the ringgit will benefit from supportive global commodity prices and sustained trade surplus. The US Federal Reserve and other major central banks shifting their monetary stance from hawkish to dovish will narrow interest differentials in 2024. MIDF expects the ringgit to average at 4.38 against the US dollar and reach 4.20 by year-end. AmBank Research also sees upside prospects for the currency, backed by increased coordination among authorities and statements that the ringgit is currently deemed 'undervalued'. Maybank Investment Bank emphasizes the importance of economic reforms and restructuring for the ringgit's long-term outlook.

#Ringgit #UsDollar #Economy #InterestRates #CommodityPrices #TradeSurplus #MonetaryPolicy #EconomicReforms

https://theedgemalaysia.com/node/703865 

 Gold extends rally to record as Powell hints at rate cut in 2024
==========

Gold prices surged to a record high, reaching US$2,161.09 per ounce, as Powell indicated potential rate cuts in the coming months. The rally was also influenced by sluggish US economic data and falling inflation. Lower rates boost the appeal of non-yielding bullion. If labor market or inflation data shows weakness, US$2,300 would be the short-term target. Central bank buying is expected to continue due to geopolitical uncertainty, and gold is seen as a safe investment. Spot silver fell 0.4% to US$24.08, platinum dipped 0.3% to US$904.83 per ounce, and palladium slipped 1.5% to US$1,026.80 after a surge of over 12% in the last session.

#Gold #RateCut #RecordHigh #UsEconomicData #FederalReserve #JeromePowell #Inflation #InterestRates #Silver #Platinum #Palladium

https://theedgemalaysia.com/node/703819 

 Miti sees 'golden opportunity' for second surge in Malaysian economy
==========

Deputy Investment, Trade and Industry Minister Liew Chin Tong sees a 'golden opportunity' for a second surge in Malaysia's economy. He attributes this opportunity to political stability, far-sighted economic policies, and the green transition. Liew believes that competition between China and the US has led to increased investments in Southeast Asia, and Malaysia is well-positioned to attract investors. He highlights Malaysia's good logistics, fair Common Law framework, multilingual workforce, and high level of education as advantages. Liew suggests that Malaysia should focus on vertical integration and cooperation with neighboring countries like Vietnam and Indonesia rather than competing with them. He made these comments during the Civil Discussion: Unity Aspiration Strengthening the Bumiputera Agenda at the Bumiputera Economic Congress 2024.



https://theedgemalaysia.com/node/703176 

 US consumer sentiment posts surprise drop from initial reading
==========

US consumer sentiment declined to 76.9 from a preliminary reading of 79.6 in late February, marking a reversal from earlier in the month that showed a pickup in optimism. The intramonth drop was the biggest since March 2020. The earlier February reading was the highest since July 2021. Gas prices climbed notably toward the end of the month, but the survey didn’t specify what led sentiment to deteriorate so much through Feb 26, when the final responses were collected. Consumers expect prices will climb at an annual rate of 3% over the next year, up from the 2.9% expected in January. Despite the drop, sentiment has largely been improving in the last two years as inflation has retreated without much damage to the economy. Views among Republicans improved to the best level since mid-2021, while those for Democrats worsened by the most since June 2022 but remained elevated.



https://theedgemalaysia.com/node/703160 

 Boeing agrees to US$51m settlement for US export violations, including in China
==========

Boeing has reached a US$51 million settlement with the US State Department for export violations, including employees in China downloading documents related to US Defence Department programs. From 2013 to 2017, three Chinese employees at Boeing facilities in China downloaded technical data involving programs such as the F-18, F-15, and F-22 fighter jets, the E-3 airborne warning and control system, the AH-64 Apache attack helicopter, and the AGM84E cruise missile. Unauthorized downloads of technical data also occurred at Boeing and partner facilities in 18 countries from 2013 to 2018. The settlement covers 199 violations of the Arms Export Control Act and International Traffic in Arms Regulations. Boeing voluntarily disclosed the violations, and the settlement includes a three-year consent agreement and a US$51 million civil penalty, with US$24 million suspended for remedial compliance measures. Boeing will engage an external special compliance officer and undergo two external audits for at least two years.

#Boeing #UsStateDepartment #ExportViolations #China #Settlement

https://theedgemalaysia.com/node/703004 

 Experts have divergent views on investment outlook, general agreement on tech
==========

Global financial markets have started 2024 on a steady footing, with the US Dow Jones Industrial Average and S&P 500 hitting record highs. Taiwan's stock benchmark also surged to an all-time high. The FBM KLCI has risen 5% this year, making it the best performer in the region. Trading volume on Bursa Malaysia has increased. Experts have divergent views on the investment outlook for 2024, but there is general agreement on the positive outlook for the tech sector. Experts also discuss key investment themes, including the Johor theme and the Osat players in the tech sector. They discuss the attractiveness of Malaysia for foreign investors and the potential impact of a global economic slowdown. They also share their views on the soft landing in developed economies, weaknesses in China's economy, key risks in 2024, and opportunities in bonds. Overall, there is optimism about the tech sector and selective sectors in Malaysia and globally.

#InvestmentOutlook #TechSector #FinancialMarkets #FbmKlci #TradingVolume #JohorTheme #OsatPlayers #ForeignInvestors #GlobalEconomicSlowdown #SoftLanding #China'sEconomy #KeyRisks #Bonds

https://theedgemalaysia.com/node/701393 

 Ringgit opens lower against greenback amid resilient US economic data
==========

The ringgit opened lower against the US dollar on Friday, as the greenback stayed firm, amid resilient US economic data. At 9am, the ringgit had eased to 4.7745/7800 versus the US dollar, compared with Thursday’s close at 4.7710/7800. Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said US economic data continued to defy market expectations, which could lead to continuous support for the greenback. He noted that initial jobless claims were lower than expected at 201,000 last week, against consensus estimates of 217,000, while manufacturers’ sentiment improved to 51.5 points in February, the second consecutive month above the 50-point level indicating an expansion. SPI Asset Management managing director Stephen Innes said that on a positive note, the ringgit opened below this week's weakest level. On a negative note, the broader US dollar was stronger overnight after better-than-expected US data. Meanwhile, the ringgit was traded higher against a basket of major currencies.



https://theedgemalaysia.com/node/702044 

 Ringgit opens easier against US dollar
==========

The ringgit opened easier against the US dollar at 4.7995/8050 compared to the previous close at 4.7975/8000. The greenback remained steady despite slight retracement and subdued US yields. The Malaysian ringgit is expected to continue trading cautiously ahead of the release of the US Federal Open Market Committee meeting minutes and the announcement of the Malaysian consumer price index on Friday. The ringgit also traded lower against other major currencies, including the Japanese yen, British pound, and euro. It also slid against other ASEAN currencies such as the Thai baht and Singapore dollar.



https://theedgemalaysia.com/node/701679 

 Commercial-property loans coming due in US jump to $929 billion
==========

Nearly 20% of outstanding debt on US commercial and multifamily real estate, totaling $929 billion, will mature this year, requiring refinancing or property sales. The volume of loans coming due swelled 40% from an earlier estimate of $659 billion. The increase is attributed to loan extensions and other delays rather than new transactions. The Federal Reserve's decision to stop hiking interest rates is expected to facilitate more deals this year. About $4.7 trillion of debt from all sources is backed by US commercial real estate, raising concerns among regulators and investors. Commercial-property prices have fallen 21% from their peak in early 2022, with office prices experiencing the largest decline at 35%. Banks have $441 billion of commercial-property debt coming due this year, while $234 billion is securitized in CMBS, collateralized loan obligations, and asset-backed securities. Nonbank lenders have $168 billion in loans coming due. Approximately 25% of office loans are coming due in 2024, reflecting the impact of remote and hybrid work on office values and vacancies.

#Commercial-propertyLoans #UsRealEstate #Refinancing #PropertySales

https://theedgemalaysia.com/node/700732 

 Real estate pain for US regional banks is piling up, say investors
==========

Investors are concerned about the exposure of US regional banks, particularly New York Community Bancorp (NYCB), to commercial real estate (CRE) loans. NYCB's recent earnings release, which revealed real estate losses, led to a 60% drop in its shares. Short-seller William C Martin of Raging Capital Ventures believes that as long as interest rates remain high, banks will continue to face problems with CRE loans. The collapse of Silicon Valley Bank in 2023 triggered a regional banking crisis, and investors fear that more pain is on the horizon for banks with office and multifamily property loans. The KBW Regional Banking index is down around 11% since NYCB's announcement. Delinquency rates on commercial mortgage-backed securities (CMBS) are expected to rise in 2024, and roughly $1.2 trillion in commercial mortgages are set to mature this year and next. Some investors are shorting banks with high concentrations of real estate loans, including NYCB, OceanFirst, and Valley National. Fitch has warned that if prices decline by approximately 40%, losses in CRE portfolios could result in the failure of a moderate number of smaller banks.

#UsRegionalBanks #CommercialRealEstate #NewYorkCommunityBancorp #SiliconValleyBank #CreLoans #InterestRates #DelinquencyRates #CommercialMortgage-backedSecurities #Cmbs #LoanDelinquencies #Rent-stabilizedMultifamilyLoans

https://theedgemalaysia.com/node/700702 

 Australian bonds fall ahead of US inflation data
==========

Australian and New Zealand bonds fell ahead of US inflation data this week. The two nations’ 10-year yields climbed three basis points. Australian stocks fell, while major currencies were broadly stable. US equity futures were little changed. The yen was slightly stronger on Monday. US inflation data due Tuesday will be crucial for the Fed. The S&P 500 rose 0.6% on Friday to cap a fresh record. Swaps market pricing shows investors anticipate the chance of a Fed cut in March at 15%. In commodities, oil prices fell after comments from Iran’s foreign minister. In Asia, data set for release includes inflation and industrial output reports for India.



https://theedgemalaysia.com/node/700622 

 Australian bonds fall ahead of US inflation data
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Australian and New Zealand bonds fell ahead of US inflation data this week. The two nations’ 10-year yields climbed three basis points. Australian stocks fell, while major currencies were broadly stable. US equity futures were little changed. The yen was slightly stronger on Monday. US inflation data due Tuesday will be crucial for the Fed. The S&P 500 rose 0.6% on Friday to cap a fresh record. Swaps market pricing shows investors anticipate the chance of a Fed cut in March at 15%. In commodities, oil prices fell after comments from Iran’s foreign minister. In Asia, data set for release includes inflation and industrial output reports for India.



https://theedgemalaysia.com/node/700622 

 Ringgit opens weaker against US dollar, rebound likely
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The ringgit opened lower against the US dollar at 4.7590/7625 compared to Tuesday's closing rate of 4.7570/7620. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid expects a rebound in the ringgit supported by an expected announcement from China on its economic boost. The ringgit also traded lower against a basket of major currencies, including the Japanese yen, euro, and British pound. However, it edged up against the Indonesian rupiah. The local note traded mostly lower against Asean currencies, including the Singapore dollar, Thai baht, and Philippine peso.



https://theedgemalaysia.com/node/700139 

 MIDF expects ringgit at 4.20 against US dollar by year end
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MIDF Research expects the ringgit to appreciate towards 4.20 against the US dollar by year end. The strengthening of the ringgit will be supported by the expected decline in interest rate differentials, as the US Federal Reserve (Fed) is expected to lower its interest rates, while Bank Negara Malaysia is likely to maintain the overnight policy rate at 3%. Concerns about recession risk in the US and prolonged weakness in global trade and manufacturing activities could limit the ringgit's prospects. The ringgit outlook may be affected by continued strength in the US dollar if the Fed delays rate cuts to a later period given the resilience in the US economy and elevated inflation. The return of appetite for riskier assets and recovery in regional trade are expected to support emerging-market currencies.



https://theedgemalaysia.com/node/699888 

 Treasuries decline as Powell adds to jobs blow
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Treasuries resumed a sell-off and most Asian equities fell after Federal Reserve chair Jerome Powell said policymakers will likely wait beyond March before cutting interest rates. The US 10-year yield climbed as much as seven basis points as Powell spoke, extending its advance made Friday when the benchmark rose 14 basis points. The Treasury declines rippled across Asian bond markets, weighing on government debt in Australia and New Zealand, where yields rose around 10 basis points. Asian equities and US share futures trended lower, while Japanese equities rose. The dollar strengthened against most major peers. Investor bets for a rate cut in March by the Fed tumbled Friday to around 20% from almost 40% on Thursday. Oil was little changed as traders gauged the impact of US and UK strikes against Houthi targets over the weekend. Gold fell slightly. Former US president Donald Trump also signaled he may impose a tariff on Chinese goods of more than 60% if elected.

#Treasuries #AsianEquities #FederalReserve #InterestRates #UsJobsData

https://theedgemalaysia.com/node/699761 

 Scorching US economy throws off market's Fed cut narrative
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Robust US economic data is challenging the expectation of a Federal Reserve rate cut, as evidence of stronger-than-expected growth raises concerns about inflation. The S&P 500 reached a record high in January on hopes of a Fed pivot to cutting rates, but recent data, including a strong jobs report, has diminished expectations of a near-term rate cut. The market had been pricing in six or seven rate cuts, but the probability of a March cut now stands at about 20%. The strong growth is seen as positive for stocks, but fears of an inflationary rebound and higher interest rates remain.

#UsEconomy #FederalReserve #StockMarket #InterestRates

https://theedgemalaysia.com/node/699686 

 MIDF Research expects Malaysia's economy to grow stronger at 4.7% in 2024
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MIDF Research projects Malaysia's economy to grow stronger at 4.7% in 2024, supported by external trade recovery and sustained growth in domestic spending. However, potential downside risks include geopolitical tensions, supply disruptions, fluctuations in commodity and financial markets, and the possibility of a US economic recession. Malaysia's economy grew at a modest pace of 3.4% year-on-year in 4Q 2023, with growth expected to continue based on rising domestic spending and recovery in external demand. The full-year 2023 GDP growth was 3.8%, driven by sustained domestic demand.



https://theedgemalaysia.com/node/699634