KUALA LUMPUR, April 8 (Bernama) -- The FTSE Bursa Malaysia KLCI (FBM KLCI) erased earlier gains to close marginally lower on Tuesday as mild bargain hunting activities were offset by cautious mode over ongoing global uncertainties. At 5 pm, the benchmark index slipped 0.24 of-a-point, or 0.02 per cent, to 1,443.56 from yesterday’s close of 1,443.80. The benchmark index opened 7.63 points firmer at 1,451.43 and climbed to as high as 1,454.58 in early trade before retreating to a low of 1,440.89 towards the end of the morning trading session. It then moved in a yo-yo mode during the afternoon session. In contrast, the broader market was positive with gainers outpacing decliners 669 to 367, while 419 counters were unchanged, 894 counters untraded, and nine others suspended. Turnover dwindled to 3.32 billion units valued at RM2.83 billion against 5.35 billion units valued at RM4.67 billion on Monday.
US 10-year Treasury yield falls below 4% for the first time since Trump’s re-election as fears of a trade-induced recession surge.
Key Developments:
Yield Movements:
US 10-year yield: Briefly dipped below 4%, settled at 4.03%.
US 2-year yield: Fell ~15bps to 3.70%.
Eurozone & UK bond yields: Dropped sharply on synchronized global easing bets.
Market Pricing:
Fed Rate Cuts: Markets now pricing in 3 to 4 cuts (90bps) by end-2025.
Money markets: 50% probability of 4 quarter-point Fed cuts — up from 0% pre-announcement.
US Dollar: Dropped 1.5%, reversing post-election gains.
Analyst Insights:
- Brandywine’s Jack McIntyre:Tariffs are now a bigger drag on growth than inflation, shifting focus of monetary policy.
- Citi Strategy Upgrade:Upgraded Treasuries to overweight, citing heightened recession risks.
- JPMorgan’s Bob Michele:US is “cruising to recession,” Fed could drop rates to 2.5% if current trajectory holds.
- Goldman, Barclays, RBC, SocGen:All cut year-end 10-year yield targets due to worsening macro outlook.
Macro Commentary:
The bond market reaction signals stagflation risk — growth slowdown alongside potential tariff-driven inflation.
Morgan Stanley delays expected Fed cuts to 2026, citing inflation risks.
Bloomberg strategist Sebastian Boyd notes the employment mandate may now dominate the Fed’s dual focus.
Conclusion:
Trump’s unexpectedly aggressive tariff regime has re-priced the global rate outlook. Investors are now bracing for slower growth, possible Fed cuts, and elevated volatility across risk assets. The path forward hinges on trade negotiation developments and clarity from upcoming jobs data and Fed commentary.
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