Market Update -18 March 2013

• Wall Street closed lower on Friday with DOW -0.17%, S&P -0.16% and Nasdaq -0.30% as investors reacted to lower-than-expected US Empire Manufacturing and U. of Michigan Confidence Index. US headline and core inflation rose 2.0% yoy.

• Eurozone’s annual inflation fell to 1.8% in Feb due to moderate growth in wages and food prices

• The euro dropped to its lowest level this year, stocks fell and the yen strengthened as an unprecedented levy on bank deposits in Cyprus threatens to plunge Europe back into crisis. Gold jumped.

• Japan’s parliament has named Kuroda as the next BOJ Chief while Iwata and Nakaso have also been named as Kuroda’s deputies.

• Chinese Premiere, Li Keqiang pledged to open the Chinese economy to more market forces and strip power from the government to achieve 7.5% annual growth through 2020 and spread the benefits of the nation’s expansion

• Government bonds in Asia climbed as threats that the euro crisis may be reignited boosting demand for haven assets.

• KLCI ended Friday on a rather sour note, as it closed at 1627.64 amidst a string of profit taking actions in the market. With concerns resurfacing in the Eurozone, caution of further downside move if there is a convincing break of the 1625 mark.

• USD/MYR continues its uphill climb on the back on the Cyprus issue and looming Malaysian GE, today’s range between 3.1250 – 3.1400, short-term range 3.1150 - 3.1500