• Investors stay at sidelines ahead of NFP data

• MYR to fluctuate in the range of 4.1653 and 4. 1829 against US dollar

Global Highlights

The dollar index edged lower by 0.05% to close at 94.217 despite positive labour market data as investors took to the sidelines ahead of non-farm payrolls data that is scheduled to be released today. A positive number will reinforce the expectation that the Fed will taper soon. Among local data, new unemployment benefit claims declined to a three-month low of 326K for the week ended 2 Oct, compared to the market forecast of 348K.

Equities extended their gains when the Dow Jones rose 0.98% to 34,755 and S&P 500 by 0.83% to 4,400. The risk-on sentiment was supported by the development in US debt ceiling issues. The UST 10-year benchmark climbed to its highest since June at 5.23bps to 1.573%. Gold fell 0.39% to close at US$1,756/oz.

The euro continued its bearish move as it shed 0.03% to 1.155, influenced by the ECB's dovish tone.

The British pound, on the other hand, gained 0.27% to 1.362 supported partially by the healthy increase of housing prices. The Halifax House Price Index was up at 1.7% m/m in September, from 0.8% in August.

The Japanese yen weakened by 0.20% to 111.63 following the BoJ’s quarterly local economic report. The regional economies were particularly disrupted by the ongoing supply chain disruption, clouding the outlook for the export-reliant country.

In the meantime, the Chinese yuan remained flat at 6.445. The Chinese market will open today after five days of holiday and focus will be on the development of the debt-laden Evergrande.

Crude oil rebounded following US Energy Department statement that it has no plan to tap into the nation’s oil reserves at the moment to cater to the increasing demand. Brent added 1.07% to US$82.0 per barrel while WTI gained 1.12% to US78.3 per barrel.

Malaysia Highlights:

The ringgit slightly strengthened by 0.02% to settle at 4.183 and was traded at a high of 4.1842 and low of 4.179.

The local bourse's FBM KLCI closed in the green for the third consecutive days, edging up 0.12% to 1,561, driven by the net buying activities from foreign investors with RM129.03mil. Both local institutions and retailers were the net sellers amounting up to RM91.96mil and RM37.07mil, respectively.

We saw another day of selling pressure in the local bond market. The government securities yield curve shifted higher with the belly part moving the most. The 3-year was -2.0bps to 2.530%, 5-year +2.0bpst to 3.040%, 7-year +1.5bps to 3.475%, and 10- year +2.0bps to 3.605%.

The IRS curve shifted higher as well with the (3Y) +3.2bps to 2.545%, (5Y) +2.0bps to 2.880%, (7Y) +0.5bps to 3.060%, and (10Y) +7.0bps to 3.370%.

Against major currencies, the ringgit appreciated vs the JPY by 0.17% to 3.747, and the CNY by 0.04% to 1.541, but depreciated against the EUR by 0.14% to 4.836, the GBP by 0.23% to 5.685 and the AUD by 0.68% to 3.047. Against its Asean peers, the ringgit mostly weakened; vs. the SGD by 0.25% to 3.081, vs. the THB by 0.11% to 8.077, vs. the IDR by 0.23% to 3,399, vs. the PHP by 0.56% to 12.091 but was up marginally against the VND by 0.01% to 5,442.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1600 and 4.1653 while our resistance is pinned at 4.1829 and 4.1920.

Source: AmInvest Research - 8 Oct 2021