As for FCPO, market closed slightly lower after opening at new highs since 5 March. Better sellers surfaced in the afternoon following quiet cash market and ideas of slack demand. Good weather in the US and arrival of monsoon rains in India undermined sentiment. Market was higher in the morning with support from very weak ringgit, which lost about 1.3 pct vs USD, and firmer CBT soyoil. Prices were 21 to 1 higher in the morning and eased to 13 lower in the afternoon.
There was some profit taking and position squaring ahead of MPOB May data, 1-10 June exports by cargo surveyors and USDA supply-demand reports on 10 June. Technical correction from overbought situation added pressure. However, there are no new factors. Short term fundamentals are positive with lower stocks, good demand for festive Ramadan, prospect of increase use for biodiesel with upcoming Indonesian export levy and signs of El Nino weather. Seasonal increase in production in coming months and bumper soybean supplies are keeping a lid on bullish sentiment.
Technical view - the lower close after rising to new highs is slightly negative. However, trend is still up and indicators remain positive. Trend up ; RSI 68.67 ; support 2275 / 2250 / 2225 / 2150 ; resistance 2360 / 2400 / 2450.
In other news...
RM weakened 1.4% to 3.7720 versus the greenback, the biggest drop in Asia, according to data compiled by Bloomberg. It earlier fell to 3.7743, the lowest level since January 2006 and close to the 3.8 level at which it was pegged until 2005.
🌺 Malaysia is vulnerable to outflows spurred by higher U.S. interest rates as central bank data show global funds hold 32% of the nation’s government bonds, compared with 18% for Thailand. Overseas investors sold a net 2.5 billion ringgit ($663 million) of the nation’s shares last month, stock exchange data show.
🌺 Malaysia Foreign reserves have climbed to $106.4 billion after falling to $105.1 billion in March, the lowest level since 2010 and below the 10-year average of $112.42 billion.
🇺🇸 U.S. stocks fell and U.S. government bonds strengthened one session after an upbeat May jobs report bolstered expectations for higher rates later this year.
€ European stocks were down at a 3-1/2 month low. The unresolved Greek debt crisis continues to weigh on stocks. The 10-year Greek bond yield rose +17 bp to a 4-sessionhigh of 11.39% as Greek needs a deal with its creditors or get another extension before a Eurozone bailout package expires on Jun 30.
📝 Greece’s international creditors have suggested extending the country’s bailout program until March 2016.
🇨🇳 China's Shanghai Composite climbed +2.17% to a 7-1/3 year high on optimism that MSCI will decide to include China's locally traded stocks to its equity benchmark indexes.
🇨🇳 The China May trade balance widened to a surplus of +$59.49 billion from +$34.13 billion in Apr, more than expectations of +$44.80 billion. May exports fell -2.5% y/y, less than expectations of -4.4% y/y. May imports fell -17.6% y/y, more than expectations of -10.0% y/y.
🇨🇳 Today, China reports May producer and consumer prices with the PPI expected to rise -4.5% on the year, while economists are forecasting a 1.3% year-over-year rise in the CPI.
👑 Gold prices rallied as a weaker dollar and concerns over political uncertainty in Turkey and Greece buoyed investor demand for the precious metal. Now, $1,174.
⛽ Oil prices fell on signs of weaker Chinese demand and continued concerns supplies. China’s crude-oil imports fell 11% in May from the prior year, according to data released Monday.
🌴 FCPO (RM2,333) closed lower after opening high since 5 March. Market was higher at opening as weak Ringgit. There was some profit taking ahead of MPOB data, 1-10 June Export data and USDA supply-demand report on 10 June. Technical correction from overbought situation added pressure. However, trend is still up and indicators remain positive.
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