• Dollar shines amid tepid data

• MYR to fluctuate in the range of 4.1640 and 4. 1775 against US dollar

Global Highlights

The dollar index continued its rally as it rose 0.26% to 94.316 on expectations that the Fed will announce a trimming of its bond purchases next month despite the weak non-farm payroll (NFP) data released on Friday.

Equities closed in the red when the Dow Jones fell 0.72% to 34,496 and S&P 500 dropped 0.69% to 4,361. The US Treasury 10- year benchmark yield was stable at 1.612 as the fixed income market in the US was closed on Monday due to the Columbus Day holiday. Gold declined by 0.17% to US$1,754/oz.

Conversely, the euro extended its bearish trend as it shed 0.15% to 1.155.

The British pound similarly shed 0.15% to close at 1.360.

The Japanese yen was on the losing side again as it dipped 0.95% to settle at 113.31, the weakest level since December 2018. Also, a survey by the BoJ showed on Monday that inflation woes are saturating among the households as the ratio of households that expect prices to rise increased to 68.2% in September from 66.8% in June.

In the meantime, the Chinese yuan weakened by 0.11% to 6.451 amid increasing expectations of an alleviation in disputes between China and US over weekend talk.

Crude oil remained bullish amid rebounding global demand that has caused global energy shortages. Brent was sent higher by 1.53% to US$83.7 per barrel while the WTI soared 1.47% to US$80.5 per barrel.

Malaysia Highlights:

The ringgit strengthened by 0.17% to 4.170 and was traded at a high of 4.175 and low of 4.1652.

The local bourse's FBM KLCI gained 0.44% to 1,571. Transaction details showed that both local retailers and foreign investors were net buyers with RM23.3mil and RM131.4mil, respectively. Local institutions were the net sellers with RM154.7mil.

Yesterday, the Dewan Rakyat passed a bill to lift the federal government’s statutory debt limit to 65% of GDP from 60% . Also, the expenditure under Kumpulan Wang Covid-19 was raised by RM45bil to RM110bil.

In the local bond market, we saw another day of lower prices as yields closed higher across the board. The 3-year was +3.0bps to 2.560%, 5-year +6.0bps to 3.170%, 7-year +7.0bps to 3.565% and 10-year +5.5bps to 3.680%.

The IRS yields also closed higher, especially in the belly part; (3Y) +4.3bps to 2.618%, (5Y) +6.5bps to 2.985%, (7Y) +6.5bps to 3.190%, and (10Y) +2.5bps to 3.475%. Against major currencies, the ringgit was mixed as it appreciated vs. the EUR by 0.28% to 4.819, vs. the JPY by 1.12% to 3.681, and vs. the CNY by 0.28% to 1.547, but depreciated vs. the GBP by 0.04% to 5.689, and vs. the AUD by 0.32% to 3.050.

Against its Asean peers, the ringgit was mixed as well as it strengthened vs. the IDR by 0.07% to 3,407, vs. the PHP by 0.72% to 12.182, and vs. the VND by 0.15% to 5,457 but weakened against the SGD by 0.05% to 3.080 and against the THB by 0.65% to 8.059.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1560 and 4.1640 while our resistance is pinned at 4.1775 and 4.1850.

Source: AmInvest Research - 12 Oct 2021