Why are major global equity markets turning mixed now?

Major equity markets across the globe turned mixed last week amid the ongoing tension between Russia and  Ukraine, and US inflation hitting a 40-year high of 7.9%  on the back of rising fuel and food costs.

It is worth to note, that among the markets that we track, DAX Index was the top performer last week, rising by +4.07% as consumer spending in Germany rose steadily in Jan-22 as the retail sales surged to an all-time high of +10.3%yoy after remaining flat in the preceding month.

Meanwhile, the FBM KLCI dropped by -2.23% as IPI growth moderated further in January 2022, at +4.3%yoy (vs +5.5% in December 2021).In the US, nonfarm payrolls advanced by 678K in Feb-22 (Jan-22: 481K), beating the market expectations to add only 400K jobs.

The stronger job growth which was the highest since Jul-21 was bolstered by the increased hiring in leisure & hospitality; professional & business services; health care; and construction during the month.

global equity and labour

The labour force participation rate climbed to a new pandemic high of 62.3% (Jan-22: 62.2%), showing that many people are returning to work.

Given the robust job creation and the high labour force participation rate, the US jobless rate slipped to 3.8% (Jan-22: 4%), recording a new pandemic low and slightly below the market consensus of 3.9%.In Malaysia, employment growth hit 8-month high.

Malaysia’s labour market improved further as employment increased +2.9%yoy, biggest gain since Jun-21. As overall economic activities stay in recovery mode, total unemployed persons fell further by -13%yoy in Jan-22, the largest contraction rate ever recorded.

Jobless rate remained at pandemic low of 4.2%.Brent crude oil price dropped by 4.61% last week, to close at USD112.67/b last Friday.

The FBM KLCI decreased by -2.23% for the week to settle at 1,568.22 points. As for the Ringgit, it saw a weekly depreciation by circa 0.43% against the US dollar to close at USD/MYR 4.1958 last Friday. – MIDF