Gold Languishes on Hawkish Fed Stance

Gold prices held their decline to around $1,800 an ounce on Friday after falling nearly 3% in the past two sessions, as the dollar and Treasury yields jumped following hawkish updates from the Federal Reserve meeting. The US central bank indicated on Wednesday that it would likely hike interest rates in March and begin reducing its balance sheet soon after. Investors are pricing in as many as five rate increases this year, but felt that the Fed fell short in providing much needed guidance on the timing and magnitude of the shift in policy. The dollar has since soared to highs last seen in July 2020, while the 10-year US yield bounced back above 1.8% following the Fed update. Gold prices were on track to end the week 2% lower, nearly wiping out the gains from the past two weeks.

Dutch Business Mood Drops to 8-Month Low

The Netherlands' business confidence indicator fell to an eighth-month low of 9.0 in January 2020 from 10.2 a month earlier.

Singapore Producer Prices Rise the Least in 3 Months

The Domestic Supply Price Index in Singapore increased 22 percent from a year earlier in December 2021, easing from an upwardly revised 26.1 percent surge in the previous month. It was the lowest producer price inflation since September, as prices of mineral fuels increased much less (52.2% vs 80.5% in November), while those of crude materials excluded fuels continued to rise (14.0% vs 13.6%). Also, prices advanced softer for both animal & vegetable oils (40.7% vs 48.9%) and chemicals (13.3% vs 14.9%). On the other hand, prices advanced further for manufactured goods (14.8% vs 14.5%), machinery & transport (14.8% vs 12.0%), miscellaneous manufactured (4.8% vs 2.9%), and beverages & tobacco (2.9% vs 1.6%), food & live animals (5.6% vs 4.4%).

Brent Heads for Sixth Weekly Gain

Brent crude futures held near $90 per barrel on Friday after retreating from a 7-year high of $91.04 in the previous session, but were still set for their sixth weekly gain as supply tightness and a policy of moderate output increases from major producers kept oil prices elevated. OPEC+ is scheduled to meet on Feb. 2 and is widely expected to stick with a planned 400,000 bpd production increase for March. Oil prices have also gained about 15% since the start of the year as geopolitical tensions in Eastern Europe involving Russia, the second-largest oil producer and a key natural gas provider to Europe, and in the Middle East stoked fears of supply disruptions. On the demand side, China’s crude oil imports could rebound by 6-7% this year as buyers step up purchases for new refining units and to replenish low inventories, according to a Reuters report.

Oil Set for Sixth Weekly Gain

WTI crude futures held near $87 per barrel on Friday after retreating from a 7-year high of $88.54 in the previous session, but were still set for their sixth weekly gain as supply tightness and a policy of moderate output increases from major producers kept oil prices elevated. OPEC+ is scheduled to meet on Feb. 2 and is widely expected to stick with a planned 400,000 bpd production increase for March. Oil prices have also gained about 15% since the start of the year as geopolitical tensions in Eastern Europe involving Russia, the second-largest oil producer and a key natural gas provider to Europe, and in the Middle East stoked fears of supply disruptions. On the demand side, China’s crude oil imports could rebound by 6-7% this year as buyers step up purchases for new refining units and to replenish low inventories, according to a Reuters report.

Sensex Rebounds But Heads for Weekly Losses

The BSE Sensex jumped 754 points or 1.31% to 57,969 in early trade on Friday following a noticeable retreat in the prior session, amid gains in energy and banking stocks. Shares of Bharti Airtel surged 1.8% after the company said Alphabet Inc's Google would invest up to USD 1 billion in the telecom operator. Risk appetite was mainly lifted by upbeat latest US economic data. The world’s largest economy expanded at an annualized rate of 6.9% in Q4, beating market estimates of a 5.5% rise; while US weekly jobless claims fell for the first time in a month, suggesting the impact of the Omicron variant on the labor market is starting to recede. For the week, however, th index is heading for a 1.8% slump, dragged down by the prospect of a more hawkish Federal Reserve, mixed corporate earnings, and geopolitical unrest in Ukraine.

India 10Y Bond Yield Hits 25-month High

India 10 Year Government Bond Yeld increased to a 25-month high of 6.752%, tracking a general rise in global bond yields after the Federal Reserve set a more hawkish tone in its last meeting and signaled rate hikes from March. In India, the central bank (RBI) kept the interest rate at a record low of 4% last month and pledged to maintain an accommodative stance to support economic recovery. Meanwhile, investors await India’s budget due next week and the outcome of RBI’s monetary policy committee meeting scheduled from February 7th to 9th.

Malaysia Exports Rise to Fresh Record High

Exports from Malaysia increased by 29.2 percent from a year earlier to a new record high of MYR 123.8 billion in December 2021, beating market consensus of a 24.6 percent rise, following a 32.4 percent growth in the prior month, amid a further recovery in global demand and surging commodity prices. .

Malaysia Posts Largest Trade Surplus on Record

Malaysia's trade surplus widened sharply to a record high of MYR 31.0 billion in December 2021 from MYR 20.7 billion in the same month a year ago, and beating market expectations of MYR 22.5 billion, amid strong global trade ahead of the new year holidays.

Malaysia Import Growth Below Forecasts

Imports to Malaysia expanded 23.6% yoy to MYR 92.9 billion in December 2021, below market consensus of 27.3% and after a 38% jump in November. Still, this was the 11th straight month of double-digit growth in inbound shipments, as domestic consumption stayed robust following a surge in COVID-19 vaccinations. Arrivals of intermediate goods gained 27.1%, supported by industrial supplies, n.e.s. primary, parts and accessories of capital goods; and fuel & lubricants, primary. Also, purchases of capital goods grew 21% percent, lifted by capital goods (except transport equipment); and those of consumption goods rose 13.1%, due to food & beverages, process, mainly for household consumption, and non-durables. By country, imports went up from China (22.3%), Singapore (36.9%), the EU (24.1%), Taiwan (42.8%), the US (20.6%), and the ASEAN countries (36.7%). For the whole year, purchases rose 23.6% from the same period of 2020 to MYR 987.24 billion.