Daily Market Reports Issued By Rakuten Trade Research : Page 16

Wall Street was closed for Memorial Day and will resume trading today.
Nonetheless, index futures are trending higher with the DJIA adding more than 400 points as Trump said he would delay the 50% tariff on the EU.
As for Hong Kong equities, the HSI tumbled on concerns of China’s economic health amid the tariff uncertainty once the 90-day pause expires.
Meanwhile, traders are also worried that a prolonged price war amongst the EVs players to clear inventory will see extended margin compression.
Back home, the FBM KLCI closed marginally lower as we suspect foreign selling may still be prevalent.
These short term trades by foreign funds would certainly lengthen the consolidation of the benchmark index.
For today, we expect the index to trend between the 1,535- 1545 range.
Meanwhile, we noticed that the MYR has strengthened over the past week from RM4.30 to RM4.22 vs the USD.

Wall Street sank as Trump continues with his latest tariff threats at the European Union with a straight 50% and 25% on i-Phones not made in the US.
As a result, sentiment was again spooked by the “de” and “re”-escalation of the trade tension going forward.
Meanwhile, the US 10-year yield eased slightly to 4.509% despite recent tepid demand for US treasury.
Over in Hong Kong, the HSI closed marginally higher on the easing trade tension between the US and China.
On the home front, the FBM KLCI staged an immediate rebound from below the 1,530 level due to some bargain hunting activities.
We suspect foreign funds may be the buyers after selling down in the past few days.
For today, we expect the index to trend cautiously within the 1,525-1,540 range.

Wall Street ended flat after a choppy session as sentiment turned cautious after the House members passed the latest Bill, and is now pending for the Senate’s approval.
The Bill which could worsen the US deficit is estimated to cost USD4 trillion.
Meanwhile, the US 10-year yield has eased to 4.529%.
Over in Hong Kong, the HSI halted its recent impressive run-up on concerns over Baidu’s growth prospects as the stock slid 4% after Daiwa Securities cut its estimates despite a better quarterly result.
Apart from this, overall sentiment was further spooked by the events on Wall Street which led to a spike in its 10-year yield to above 4.6%.
Back home, the FBM KLCI slumped to below the crucial 1.530 level amid a regional bloodbath.
We believe foreign funds are unwinding their position within the regional markets amid heightening uncertainties over the US budget deficit and interest rates.
Though we hope for an immediate rebound, we believe it is inevitable that the index to hover within the 1,520-1,530 range today.

Wall Street tumbled on growing worries that the new US budget will put more stress on the already huge deficit.
While Trump is bulldozing the budget to be passed, the US 10-year yield spiked up to 4.597% thus pushing the financing of the US massive national debt amounting USD37trillion higher.
Over in Hong Kong, the HSI upward trajectory continues as it climbed to a 2-month high buoyed by expectations that China’s economy remains resilient and is able to absorb the tariff impact.
Meanwhile, many are also optimistic that there will be more cuts in interest rates and the banks’ Reserve Requirement Ratio (RRR).
On the home front, the situation is still disappointing as the FBM KLCI dropped further to just below the 1,545 mark.
Still lacking any catalysts, we expect the local bourse to stay in consolidation mode with the index to oscillated between the 1,540-1,550 range today.

Wall Street took a breather to end lower after an impressive performance over the past few days.
Recent downgrade on the US sovereign rating by Moody’s may have also played a part exacerbating the flight of funds out of treasury thus pushing the US 10-year yield to 4.485%.
In Hong Kong, the HSI rejoiced to a 2-month high after The People’s Bank of China (PBOC) cut its interest rate for the first time in 7 months.
Buying was broad based led primarily by the pharmaceutical sector following Morgan Stanley’s upgrades.
Back home, the FBM KLCI continues to slide to close below the 1,550 level as market undertone remains cautious.
The lack of catalysts coupled with the evaporating daily volume saw diminishing participation, especially from the retail portion.
As we do not expect the market to stage a trend reversal anytime soon, we believe the index to hover within the 1,545-1,555 range today.

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