The flow of economic data took to the sidelines last week as the “real trigger” to the market rally was Fed’s commentaries which sent Dow Jones to 21,000 points.

The flow of economic data took to the sidelines last week as the “real trigger” to the market rally was Fed’s commentaries which sent Dow Jones to 21,000 points.

San Francisco Fed’s John Williams expressed the view that a rate hike at the March FOMC meeting would be given “serious consideration”. He noted that “we’re very close to achieving our dual mandate goals”. Next, New York Fed’s William Dudley mentioned that a policy tightening case had become “a lot more compelling” and that “the risks to the outlook are now starting to tilt to the upside”. Lael Brainard, one of the most dovish members of the FOMC, said that “we are closing in on full employment, inflation is moving gradually toward our target, foreign growth is on more solid footing and risks to the outlook are as close to balanced as they have been in some time” and that “assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path”. Lastly, Jerome Powell commented that “we’re as close to our mandates as we’ve been in a very long time and the case for a rate increase in March has come together, and I do think it’s on the table for discussion”.

Thereafter, the probability of the rate hike in March jumped to 88%. As a result of the hawkish statements by the Fed members, all risky asset classes in the US, especially financials, climbed.

ment could be that Proton is on track to complete its foreign strategic partner exercise. Injection of capital by the government has helped DRB’s gearing levels and credit metrics. We think DRB’s valuation for the 2019 paper and the 2021 paper is around fair value. Investors who wish to take a position on DRB could hold the bonds for their relatively high yields in the Malaysian bond space.