Global Highlights

The dollar index lost its steam as it eased from its one-year high, down by 0.11% to 94.230 amidst weak employment data and a choppy trading day. The number of new unemployment benefit claims for the week ended 25 Sept increased for the third consecutive week to 362K, above the market forecast of 335K. Other than that, the final GDP growth figure for 2Q21 has been revised higher to 6.7% q/q compared to the early estimates of 6.6% q/q. For September, the dollar index ended up by 1.7%.

Equities were bearish as the Dow Jones tumbled 1.59% to 33,844, the lowest point since June 2021. The S&P 500 declined 1.19% to 4,308. On monthly basis, both closed lower by 4.3% and 4.8%, respectively. The UST 10-year benchmark fell from its 3-month high by 2.94bps to close at 1.487%. Gold rebounded 1.77% to US$1,757/oz.

Despite the weaker dollar, the euro shed 0.16% to 1.158. On the data front, the unemployment rate in the Eurozone edged lower to 7.5% in August from 7.6% in July. The euro lost 1.9% for the month of September.

On the other hand, the British pound shone as it added 0.35% to 1.347 against the dollar . Among local data, the annual house price grew 10% in September, slower than August’s 11% print (cons.: 10.7%). On a monthly basis, it grew 0.1% compared to the market forecast of 0.6% m/m. Separately, the GDP growth rate for 2Q21 has been revised to 5.5% q/q, well above the preliminary estimate of 4.8%. The pound weakened by 2.0% on monthly changes.

The Japanese yen strengthened 0.60% to 111.29 despite weak economic data. Reports showed that Japan's industrial production further contracted by 3.2% m/m in August compared to a 1.5% decline in July, marking the second straight month of falls in industrial output. Retail sales also took a beating when it fell 4.1% over the same period. The yen weakened on monthly basis against the dollar, down by 1.2%.

In the meantime, the Chinese yuan appreciated 0.40% to 6.445 against a weaker dollar. This is amid mixed economic data as the PMI Index by NBS Manufacturing edged lower to 49.6, the first contraction since February 2020, while the services sector recovered strongly, to 53.2 in September from 47.5 in August . In addition, the Caixin Manufacturing PMI rose to 50 from 49.2 over the same period. Chinese markets will be closed for the week-long National Day holiday starting Friday. The yuan rose by 0.2% MoM.

Crude oil was mixed when Brent fell 0.15% to US$78.5 per barrel and WTI rose 0.27% to US$75.0 per barrel. Reports stated that China was prepared to buy more oil to cater to increasing demand, offsetting the price downward pressure from an unexpected rise in US crude inventories.

Malaysia Highlights:

The ringgit depreciated marginally by 0.05% to 4.186, testing the resistance level of 4.197. It was traded with a high of 4.197 and low of 4.186.

Bursa Malaysia’s transactions showed foreign and local retailers' selling net positions of RM207.2mil and RM3.9mil, respectively. Local institutions were the net buyers of RM211.1mil.

Over to the local bond market, the yield curve shifted lower. 3-Year -5.0bps to 2.455%, 5-Year -2.0bps to 2.925%, 7-Year -3.0bps to 3.295% and 10-Year -6.0bps to 3.365%.

The IRS curve shifted lower as well as the (3Y) -1.0bps to 2.450%, (7Y) -1.0bps to 2.975% and (10Y) -0.8bps to 3.218%, while the (5Y) remained unchanged at 2.785%.

Against major currencies, the ringgit outperformed; vs. the EUR by 0.53% to 4.855, vs. the GBP by 0.41% to 5.626, vs. the AUD by 0.53% to 3.015, and vs. the CNY by 0.38% to 1.539. But the ringgit weakened against the JPY by 0.64% to 3.761. The ringgit’s performance was mixed against its Asean peers. It strengthened vs. the SGD by 0.18% to 3.077, the IDR by 0.09% to 3,419, and the PHP by 0.21% to 12.180 but weakened against the THB by 1.02% to 8.033 and marginally against the VND by 0.01% to 5,437.

MYR Outlook For The Day

We expect the MYR to trade between our support of 4.1333 and 4.1489 while resistance is pinned at 4.1704 and 4.1854.
 

Source: AmInvest Research - 1 Oct 2021