Weekly Market Update - 5 June 2017

Market Outlook

Equity Market Outlook

• Last Friday U.S. non-farm payroll was weaker than expected, resulted in less than absolute certainty of a June rate hike in next week’s Federal Open Market Committee (FOMC) meeting.
• Nevertheless market expectation of a 0.25% hike is still intact.
• Malaysian corporate earnings first quarter results are just over - 16% reported better than expected, 43% was below and the balance 41% was in line.
• Expects market to range bound this week ahead of FOMC meeting.       

Fixed Income Outlook

• The Malaysian Government Securities (MGS) market was relatively uneventful last week, with market taking a breather after a strong rally in the past 2 months. The 10-year benchmark ended 1bps lower for the week whilst most other benchmarks ended flat.
• US non-farm payroll disappointed on Friday, with 138k jobs created which was lower than expected. The market priced in a lower rate hike probability at 85% after the release, although most participants still expect the Federal Reserve to hike rates in June.

Source: Lipper for Investment Management, as at 31 May 2017. Past performance is not necessarily indicative of future performance. 

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