• Ringgit strengthens for third consecutive session

• MYR to fluctuate in the range of 4.1587 and 4.1684 against US dollar

Global Highlights

The dollar index rallied by 0.21% to 94.516 and hitting a one-year high despite the slightly negative labour market development. The number of job openings fell to 10.4mil in August, missing the market forecast of 10.92mil.

On another note, the IMF has revised its global growth forecast downwards to 5.9% from 6.0% previously, attributing it to supply chain disruptions that are worsening the pandemic dynamics.

Equities lost their grounds as the Dow Jones slipped 0.34% to close at 34,378, while the S&P 500 fell 0.24% to 4,351. The UST 10-year benchmark yield tumbled 3.49bps to 1.577%. Gold added 0.34% to US$1,760/oz.

The euro shed 0.19% to 1.153 following the release of the ZEW Indicator of Economic Sentiment. The headline figure dropped for the fifth straight month to 21 in October from 31.1 in September, marking the lowest points since March 2021.

The British pound edged lower by 0.05% to 1.359 as the currency found little support from the labour market data. The unemployment rate in the UK for August down to 4.5% from 4.6% in July while the average earnings, including bonus in the same month, rose by 7.2%, Meanwhile, the number of people claiming for unemployment benefits declined by 51.1K in September.

The Japanese yen extended its losses, weakening by 0.26% to 113.63 as the surging US Treasury yields attract more investors.

In the meantime, the Chinese yuan strengthened despite an announcement made by the President Xi Jinping directing an investigation on state banks and other financial institutions.

Crude oil took a pause in its recent rally as the Brent fell 0.27% to US$83.4 per barrel, while the WTI rose 0.15% to US$80.6 per barrel amid concerns that higher energy costs could dampen the economic recovery.

Malaysia Highlights:

The ringgit strengthened by 0.14% to 4.165 and was traded at a high of 4.1778 and low of 4.163. Meanwhile, the FBM KLCI extended its gains for the fifth consecutive day as it rose 0.83% to 1,584. We also saw upbeat foreign inflows as the foreign investors and retailers both logged a net buying position of RM148.2mil and RM29.1mil, respectively. Local institutions were net sellers with RM177.3mil.

Over in the local bond market, we saw rising bonds prices while yields shifted lower. The 3-year was -3.0bps to 2.530%, 5-year -1.0bps to 3.160%, 7-year -4.5bps to 3.520% and 10-year -5.0bps to 3.630%.

The IRS yields were mixed as the 3Y was +0.2bps to 2.620% and 10Y +1.5bps to 3.490% while the 5Y was -2.0bps to 2.965% and 7Y -0.5bps to 3.490%.

Against major currencies, the ringgit was broadly stronger as it appreciated against the EUR by 0.11% to 4.813, the GBP by 0.36% to 5.668, the JPY by 0.40% to 3.666, and the CNY by 0.11% to 1.549, but weakened against the AUD by 0.27% to 3.068. Against its Asean peers, the ringgit also climbed; vs. the SGD by 0.25% to 3.073, the IDR by 0.21% to 3,414, the PHP by 0.16% to 12.201, and the VND by 0.09% to 5,462. But it depreciated against the THB by 0.71% to 8.002.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1413 and 4.1587 while our resistance is pinned at 4.1684 and 4.1826.

Source: AmInvest Research - 13 Oct 2021