• 10-year Treasury rises to 3-month high

• MYR to fluctuate in the range of 4.1790 and 4.1967 against US dollar

Global Highlights

The dollar index extended its bullish move as it gained 0.06% to 93.383 amidst recovering risk sentiment and positive economic data as it moved away from last week’s losses. The number of new orders for US durable goods soared 1.8% m/m in August, above the market forecast of 0.7% growth and July’s print 0.5% increase.

Equities were mixed when the Dow Jones rose 0.21% to 34,869 while the S&P 500 fell 0.28% to 4,443. The UST 10-year yield continued to rally as it added 3.62bps to 1.487%. Gold fell slightly by 0.01% to US$1,750.2/oz.

Tracking the bullish dollar, the euro lost 0.21% to settle at 1.170 following the win of Germany's centre-left Social Democrats (SPD) in the federal election. This brings an end to 16 years of conservative-led rule under Angela Merkel.

The British pound, on the other hand, outperformed against the dollar. It closed higher by 0.14% to 1.370.

The Japanese yen weakened by 0.24% to 111.0. Among local data, the Coincident Index for Japan’s economy fell slightly to 94.4 for July while the Leading Indicator Index also fell slightly to 104.1 for the same month.

In the meantime, the Chinese yuan strengthened by 0.14% to 6.457 over the prospect of receding Evergrande’s credit crisis and despite the ongoing power supply problem in China.

Crude oil closed in the green again for the fifth consecutive day on the prospect of rising demand and tighter supplies in parts of the world. Brent surged 1.84% to US$79.5 per barrel and WTI rose 1.99% to US$75.5 per barrel.

Malaysia Highlights:

The ringgit closed flat at 4.181 due to late session dollar strengthening momentum amid the government’s tabling of the 12th Malaysia Plan. Intraday, the ringgit traded a high and low of 4.191 and 4.182, respectively.

The FBM KLCI rose slightly by 0.06% to 1,533. Meanwhile, Bursa Malaysia’s transactions showed foreign and local retail investors bought a net position of RM7.0mil and RM67.2mil respectively. Local institutional were net sellers at RM74.2mil.

The local bond market was under heavy selling pressure, influenced by concerns over the upcoming supply while tracking higher global bond yields. The 3-, 5-, 7-, and 10-year MGS rose 2.0bps to 2.525%, 2.5bps to 2.935%, 3.0bps to 3.275%, and 2.0bps to 3.445%, respectively.

The IRS yields closed higher; (3Y) unchanged at 2.470%, (5Y) +1.8bps to 2.800%, (7Y) +0.2bps to 2.962%, and (10Y) +0.5bps to 3.180%. Elsewhere, KLIBOR remained unchanged at 1.940%.

The ringgit mostly appreciated against its major currencies peers, up 0.32% to 4.898 vs. the EUR, 0.12% to 5.738 vs. the GBP, 0.25% to 3.772 vs. the JPY, and 0.07% to 3.040 vs. the AUD. However, the ringgit depreciated by 0.13% to 1.542 vs. the CNY. The ringgit’s performance was mixed against its Asean peers, strengthening against the likes of the SGD by 0.21% to 3.093, the THB by 0.53% to 8.020, and the PHP by 0.70% to 12.18. The ringgit weakened against the VND by 0.01% to 5,435 and the IDR by 0.03% to 3,404.

MYR Outlook For The Day

We expect the MYR to trade between our support of 4.1706 and 4.1790 while resistance is pinned at 4.1967 and 4.2076.

Source: AmInvest Research - 28 Sept 2021