Malaysia and global market summary for January 2024.
World Updates
Global financial markets largely experienced positive returns with Europe and the United States having the largest gains, followed by Japan
In Europe, headline inflation was confirmed at 2.8% in January, slightly lower from December's 2.9%
Hong Kong is rolling back stamp duties on residential property transactions in an effort to stop the housing market slump
US sanctions on Russia threaten to dent Russian oil sales to India, the biggest buyer of Russian oil
Malaysia Economy Updates
Ringgit declined to 4.8 against the US dollar. According to BNM, the decline is caused by the strengthening US dollar and uncertainty in China’s economy rather than domestic indicators for the slump
FBMKLCI recorded positive gains, driven by optimism in the regional market
The annual inflation stood at 1.5% in January, holding steady for the third straight month while staying at its lowest since February 2021
Effective March 1, 2024, the service tax in Malaysia will be revised from 6% to 8%
US Updates
Jobless claims decreased by 12,000 to 201,000 in mid-February, well below market expectations of 218,000
The 10-year U.S. Treasury note had a relatively muted return, with yields stabilising around the 4.2% range. This comes as investors assessed the future path of interest rates following recent comments from Federal Reserve speakers
Consumer spending, which accounts for more than two-thirds of US economic activity, increased at a 3.0% rate
China Update
China's economic growth is likely to slow to 4.6% in 2024 and cool further to 4.5% in 2025
The People’s Bank of China reduced its reference rate for mortgages, specifically the 5-year loan prime rate, by 25bps to 3.95% at the February fixing. Meanwhile, the 1-year rate was maintained at 3.45%
Alternative Investments
Bitcoin has reached an all time high above US$60,000, a gain of 50% since the beginning of the year.
Ethereum could reach $4,000 ahead of a likely spot ETF approval in May
Oil prices eased after a larger-than-expected build in US crude stockpiles while signs that US interest rates could remain elevated for longer also added to the pressure
Spot gold already at recent highs remained steady at $2,036.42 per ounce, as traders held back from taking fresh positions ahead of key U.S. inflation data
2024 February Market Outlook Update
Global markets largely expect inflation to have peaked due to measures taken by central banks worldwide and the lagged effects of monetary policy. Expected ahead would be a decline in inflation rates leading to eventual rate cuts while facing potential investment volatility. Diversifying investments, particularly into attractive segments of the global economy such as equities and alternative investments, is recommended.
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