Global Highlights

The dollar index continued to be bullish for the third consecutive session as it rallied by 0.61% to 94.338, the highest since September 2020, driven by the elevated energy prices and increasing expectations for a reduction in the Fed’s asset purchases by the end of the year. The dollar was partially supported by concerns over a tighter liquidity environment following US Treasury Secretary’s warning that the country risks running out of money as Senate fails to advance a bill to suspend debt limit. Nevertheless, economic data release was positive with the number of existing homes sales in the US jumping 8.1% m/m in August, up from 2% contraction in July and above market forecast of 1.4%.

Equities rebounded as they tried to recoup the previous session’s losses. The Dow Jones rose 0.26% to 34,391 and S&P 500 added 0.16% to 4,359. The US Treasury 10-year yield saw the first drop after a seven-day rally as it closed lower by 2.07bps to 1.517%. Gold extended its losses as it dropped 0.44% to US$1,726/oz, the weakest in six months.

Tracking the bullish greenback, the euro fell 0.73% to its weakest since July last year. Among local data, the final consumer confidence figure remains went up to -4 in September compared to -5.3 in August. Similarly, the economic sentiment print rose to 117.8, beating forecast of 116.9

The British pound also underperformed against USD. It closed lower by 0.81% to settle at 1.343, a level that has not been seen since December 2020. On the data front, consumer credit in the UK increased by £0.4bil in August following a contraction during the previous month.

The Japanese yen continued to weaken as it fell 0.41% to 111.96. The market seemed tepid following the announcement that newly elected Fumio Kishida will be the new ruling party's leader and prime minister. In the meantime, the Chinese yuan depreciated by 0.16% to 6.471 amidst a power crisis and Evergrande’s credit crunch woes in China.

Crude oil closed in the red for the second consecutive day as Brent eased 0.57% to US$78.6 per barrel while WTI dropped 0.61% to US$74.8 per barrel. Data showed an unexpected increase in US crude oil stock, up 4.57mil as of 24 September, compared to the forecast of a 1.6mil-barrel decline.

Malaysia Highlights:

The ringgit closed flat, appreciating marginally by 0.01% to 4.184 despite a stronger dollar. Intraday, the ringgit traded at a high and low of 4.192 and 4.182, respectively.

The FBM KLCI rose 0.05% to 1,548. Meanwhile, Bursa Malaysia’s transactions showed foreign and local retail investors buying a net position of RM19.2mil and RM26.4mil, respectively. Local institutional investors were net sellers at RM45.6mil.

On the local market, selling pressure subsided as bargain-hunting returned with the MGS curve easing 1–4bps. The 3-, 5-, 7-, and 10-year MGS fell 3.1bps to 2.496%, 1.4bps to 2.932%, 4.4bps to 3.321%, and 3.3bps to 3.418%, respectively.

The IRS curve flattened; (3Y) -2.2bps to 2.460%, (5Y) -3.6bps to 2.785%, (7Y) unchanged at 2.985%, and (10Y) unchanged at 3.225%. Elsewhere, KLIBOR remained unchanged at 1.940%.

The ringgit appreciated across its major peers, up 0.12% to 4.881 vs. the EUR, 1.29% to 5.650 vs. the GBP, 0.06% to 1.545 vs. the CNY, 0.41% to 3.737 vs. the JPY, and 0.15% to 3.031 vs. the AUD. The ringgit’s performance was mixed against its Asean peers, strengthening against the likes of the SGD by 0.16% to 3.082, the THB by 0.31% to 8.116, and the IDR by 0.15% to 3,416. The ringgit weakened against the VND by 0.06% to 5,438 and the PHP by 0.21% to 12.16.

MYR Outlook For The Day

We expect the MYR to trade between our support of 4.1694 and 4.1752 while resistance is pinned at 4.1914 and 4.1996.

Source: AmInvest Research - 30 Sept 2021