• Special travel arrangement spells good news for the ringgit

• MYR to fluctuate in the range of 4.1400 and 4.1559 against US dollar

Global Highlights

The dollar dipped from its 15-month highs on Friday as it fell 0.29% to 94.049 on the back of recovering risk-sentiment in the market. Investors are now looking forward for the US inflation data that is bound to be released on Wednesday itself to gauge further Fed’s upcoming action.

On another note, a report on financial stability by the Federal Reserve stated that market participants are putting higher inflation and tighter monetary policy as the top concerns aside from the Covid-19 pandemic. The focus this week will be on the US inflation rate data.

Equities were closed on the green again when the Dow Jones increased by 0.29% to 36,432 while the S&P500 edged higher by 0.09% to 4,702. UST 10-year yield climbed 3.8bps to 1.490%; most Treasuries yield rose after Congress passed a US$1tn infrastructure bill on Saturday. Gold added 0.32% to land at US$1,824/oz.

The Euro Gained 0.17% to 1.159, Recovering Last Week’s Losses.

The British pound was on the rebound as it trimmed last week’s five-week low with 0.48% gains and closed at 1.356.

The Japanese yen extended its gains as it strengthened by 0.16% to 113.23 amid subsiding bets that central banks will raise interest rate earlier than expected.

In the meantime, the Chinese yuan appreciated by 0.10% to 6.393 as China’s strong export data provided some support to the currency.

Crude oil was closed on green, erasing any losses from the recent sudden trough. Brent rose 0.83% to US$83 per barrel while WTI added 0.81% to around US$82 per barrel. This is after the US Energy Secretary said that Washington is weighing its options to address high gasoline prices.

Malaysia Highlights:

The ringgit rebounded as it gained 0.13% to close at 4.154 and was traded with high of 4.159 and low of 4.1535. On pandemic development, Malaysia and Singapore will reopen both mutual border with Vaccinated Travel Lane between KLIA and Changi Airport starting from Nov 29. This could provide support for both the ringgit and Singaporean dollar.

FBM KLCI climbed 0.24% to 1,535. Detailed transactions showed that local institutions were the net sellers with RM142.6mil position while both the local retailers and foreign investors were the net buyers with RM13.3mil and RM129.2mil, respectively.

Over to the local bond market, the 3-years -3.0bps to 2.630%, 5-years -3.0bps to 3.110%, 7-years -4.5bps to 3.385%, and 10- years -5.0bps to 3.525%.

The IRS yield curve shifted lower when the (3Y) -7.5bps to 2.665%, (5Y) -5.0bps to 2.905%, (7Y)-2.0bps to 3.180%, and (10Y) - 5.5bps to 3.315%.

Against major currencies, the ringgit weakened vs. EUR by 0.06% to 4.803, vs. GBP by 0.20% to 5.605, and vs. AUD by 0.30% to 3.076, but strengthened slightly vs. CNY by 0.03% to 1.539. The ringgit remained stable against JPY at 3.669. Regionally, the ringgit weakened across the board against its Asean peers; vs. SGD by 0.18% to 3.079, vs. THB by 0.56% to 7.926, vs. IDR by 0.37% to 3,433, vs. PHP by 0.28% to 12.072, and vs. VND by 0.05% to 5,454.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1346 and 4.1400 while our resistance is pinned at 4.1559 and 4.1640.

Source: AmInvest Research - 9 Nov 2021