Global: The dollar rose 0.17% to 99.133 supported by its safe-haven status following a series of headlines that raised doubts over the success of US-China trade talks which are set to begin Thursday. The trade talks’ focus outshined the US Fed chairman’s speech citing the central bank will begin expanding its balance sheet through purchases of short-term US government debt, which is not the same as QE. On the equities front, both the Dow and S&P500 fell 1.19% to 26,164 and 1.56% to 2,893, respectively. Meanwhile, the UST10-Year yield slipped 2.91bps to 1.529%, while gold prices edged higher by 0.80% to US$1,505.51/oz.

The euro fell 0.13% to 1.096 as a result of a stronger dollar, outweighing the better-than-expected August German’s industrial production which came in at 0.3% m/m after contracting by 0.4% m/m in July (cons: -0.1%). The pound fell 0.6% to 1.222 following reports that the German Chancellor Angela Merkel told the UK prime minister that a deal for Brexit is now "overwhelmingly unlikely" – dampening hopes for a Brexit deal by the end of the month.

The yen rose 0.16% to 107.1 due to increased demand for safe-haven assets. Japanese household spending rose 1.0% y/y in August from 0.8% y/y in July (cons: 1.2%) while wages fell by 0.2% y/y in August from -1.0% y/y in July (cons: -0.1%). The yuan slid 0.05% to 7.144 following faltering hopes that a trade deal will be reached plus asofter Caixin Services PMI expansion which came in at 51.3 in September from 52.1 in August (cons: 52.9).

Malaysia: The MYR rose slightly by 0.01% to 4.192. The KLCI fell marginally by 0.01% to 1,558.8. The MGS market saw the 3-year yield muted at 3.125% while the 5-year inched up by 0.5bp to 3.245%. The 7- and 10-year yields eased 5.5bps to 3.350% and 2bps to 3.405%, respectively. Oil prices saw Brent prices down by 0.19% to US$58.24 per barrel and WTI dropped by 0.23% to US$52.63. Against the major currencies, the MYR rose 0.30% to 5.144 vs. the GBP but fell 0.14% to 4.607 vs. the EUR, 0.14% at 3.915 vs. the JPY and 0.05% to 1.704 vs. the CNY. Regionally, the MYR weakened mostly; (SGD) 0.10% at 3.038, (THB) 0.26% at 7.252, (PHP) 0.27% at 12.35 and (VND) 0.15% at 5,534.9. The IDR was unchanged at 3,378.2.

MYR outlook: On that note, we expect MYR to trade between our support levels of 4.1681 and 4.1764 while our resistance is pinned at 4.2094 and 4.2172.

Source: AmInvest Research - 9 Oct 2019