AmInvest Research Reports

Author: AmInvest   |   Latest post: Wed, 20 Nov 2019, 12:15 PM


Economic - FX Highlights

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Global: The dollar rose 0.2% to 97.526 as investors digested weaker-thanexpected corporate results and a new bill to make it easier for social media users to migrate from industry heavyweights Facebook, Snap and Twitter to rival platforms. Besides, the focus was on fresh Brexit developments after the UK parliament voted to consider Prime Minister Boris Johnson’s plan for leaving the EU, but rejected his rapid timetable for the proposed split. On the data front, Richmond Fed’s October manufacturing index was higher at 8.0 from -9.0 in September (cons: - 14.0). But September home sales fell more than expected by 2.2% m/m from a gain of 1.5% m/m in August (cons: -0.7%). Thus, both the Dow and S&P500 dropped 0.15% to 26,788 and 0.36% at 2,996 respectively. The UST10-year slid 3.86bps at 1.761% while gold prices rose 0.21% at US$1,487.68/oz.

In line with the latest development in the UK Parliament having rejected the PM’s plan to fast-track his Brexit accord, the pound fell by 0.68% to 1.287 Meanwhile, the EC president has recommended to allow for an extension and suggested that the next deadline could potentially be in 31 Jan 2020. The euro weakened by 0.22% to 1.113 due to Brexit uncertainties. The yen rose 0.12% to 108.5 as demand for the safe-haven currency picked up while the yuan fell slightly by 0.06% to 7.077 against the stronger dollar.

In the commodities market, both Brent and WTI surged 1.26% to US$59.70/bbl and 1.59% to US$54.16/bbl respectively following a report that Opec and its allies are considering to deepen the supply cuts during their December meeting. Market players perceived the cuts will be made in response to the outlook for weaker demand growth.

Malaysia: The MYR slipped 0.17% to 4.188. Meanwhile the KLCI gained 0.20% to 1,574.1. The local bond market was subdued, resulting in the MGS 3-, 5-, 7- and 10-year yields remaining unchanged at 3.135%, 3.255%, 3.370% and 3.415%, respectively. The 3-month KLIBOR stood firm at 3.38%.

Against the major currencies, the MYR closed in the green by; 0.07% to 4.665 vs. the EUR and 0.14% to 5.419 vs. the GBP while it fell, 0.28% at 3.860 vs. the JPY and 0.11% to 1.690 vs. the CNY. The MYR continued to weaken against most of its regional peers; (SGD) -0.07% at 3.074, (THB) - 0.07% at 7.235, (IDR) -0.45% at 3,352.6 and (VND) -0.17% at 5,540.2. However, the ringgit appreciated 0.08% to 12.23 vs. the PHP.

MYR Outlook: We foresee the ringgit fluctuating within our support levels of 4.1640 and 4.1726 with resistance pegged at 4.1937 and 4.2008. Also, look out for Malaysia’s September inflation rate (Aug: 1.5%, cons: 1.4%).

Source: AmInvest Research - 23 Oct 2019

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