Global: The dollar fell slightly by 0.04% to 97.491 following a shift in focus towards global trade developments. Just like the investors, we are also waiting for a greater level of clarity on the US-China trade war apart from the Brexit issue. Corporate earnings were also fairly disappointing. Both the Dow and S&P500 rose 0.17% to 26,834 and 0.28% to 3,005, respectively. The UST10-year added a marginal 0.35bps to 1.764% while gold price rose 0.30% to US$1,492.12/oz.

Meanwhile, the pound rose 0.31% to 1.291 while the euro strengthened marginally by 0.04% to 1.113 ahead of the ECB monetary policy meeting, scheduled later today at local time 7.45pm, followed by a press conference. It will the last meeting chaired by Mario Draghi. To recap, the ECB has decided to introduce a full stimulus package comprising a rate cut, restarting QE, a strengthened forward guidance, a move to a two-tiered rate system, and easing terms of the TLTROs. Nonetheless, there has been a divide among the ECB members with some against the resuming of QE. But with the incoming data pointing towards a softer growth, the ECB is likely to stay dovish while guiding for another round of stimulus package in December. On the data front, EU October’s flash consumer confidence fell further to -7.6 from -6.5 in September (cons: -6.7). The Japanese yen dropped by 0.18% to 108.7 while the Chinese yuan rose 0.16% to 7.065 against the dollar.

In the commodities market, Brent price rose by 2.46% to US$61.17/bbl while WTI surged 3.34% to US$55.97/bbl on the back of an unexpected decline in crude inventories as much as 1.7mil barrels for week ending 18 Oct as reported by the EIA (cons: +2.2mil).

Malaysia: The MYR rose marginally 0.03% to 4.187. The KLCI lost 0.34% to 1,568.8. As for the local bond market, the MGS 7- and 10-year yields added 1.5bps to 3.385% and 0.5bps to 3.420%. Meanwhile, the 3- and 5-year stayed muted at 3.135% and 3.255%, respectively. The 3-, 5-, and 10-year IRS remained unchanged at 3.265%, 3.315%, 3.420% while the 1- and 7-year IRS eased 1.5bps each to 3.260% and 3.350% respectively. Elsewhere, the 3-month KLIBOR stood firm at 3.38%. Against the major currencies, the MYR rose 0.19% to 4.657 vs. the EUR, 0.67% at 5.383 vs. the GBP and 0.22% to 3.852 vs. the JPY while it fell 0.14% at 1.688 vs. the CNY. Among its Asean peers, the MYR appreciated; (SGD) 0.06% AT 3.072, (THB) 0.06% at 7.239 and (VND) 0.03% to 5,541.7. However, the ringgit weakened; (IDR) 0.03% at 3,351.4 and (PHP) 0.36% to 12.19.

MYR Outlook: We foresee the MYR trading within our support levels of 4.1733 and 4.1779 while our resistance is pegged at 4.1888 and 4.1940.

Source: AmInvest Research - 24 Oct 2019