• All eyes on US inflation data

• MYR to fluctuate in the range of 4.1400 and 4.1532 against US dollar

Global Highlights

The dollar index edged lower by 0.10% to 93.955, extending losses for the fifth consecutive days. Seemingly, traders seemed to hold off any big moves ahead of CPI data due to be released tomorrow. Among local data, the producer prices index increased 0.6% m/m in October, in line with forecasts and following a 0.5% growth in September. On yearly basis, the same index rose by 8.6% y/y, same pace as previous months. This possibly indicates that high inflation could persist for a while amid tight supply chains related to the pandemic.

Equities took a breather from their rally as the Dow fell 0.31% to 36,320, while the S&P500 declined by 0.35% to 4,685. The UST 10-year yield benchmark dropped 5.4bps to 1.436%. Gold added 0.42% to US$1,832/oz.

The euro gained slightly by 0.05% to 1.159 following the ECB’s chief economist statement that the current high inflation environment does not mirror the same massive inflation problem the global market faced in the 1970s, bolstering the dovish stance of the ECB. On the data front, the ZEW Indicator of Economic Sentiment for the Euro Area rose by 4.9 points to 25.9 in November 2021 from a more than 1-1/2-year low reached in October.

The British pound slipped 0.04% to close at 1.159. The latest data from the BRC-KPMG retail sales monitor showed retail sales decreased by 0.2% y/y in October, albeit at better pace than 0.6% fall in the previous month. This was the second straight month of decline ahead of the holiday and festive seasons.

The Japanese yen strengthened again to its strongest since 11th October as it appreciated by 0.32% to 112.87. Japan's current account surplus decreased to JPY1.03tn in September compared with market expectations of a surplus of JPY1.06tn. In the meantime, the Chinese yuan remained stable at 6.393.

Crude oil rallied when the US opens it international borders to vaccinated travellers, suggesting higher demand in the future and positive sentiment in the market. Brent was sent higher by 1.62% to US$84.8 per barrel while the WTI soared 2.71% to US$84.2 per barrel.

Malaysia Highlights:

The ringgit appreciated by 0.09% to 4.151 and traded with a high of 4.1538 and low of 4.1485.

Local bourse’s FBM KLCI dipped 0.74% to close at 1,524, driven by profit-taking trade amid mixed sentiment in the regional markets. Detailed transactions showed that both the institutional and foreign investors were net sellers with RM32.7mil and RM47.6mil each while being offset by RM80.3mil net buying positions from retailers.

Local bond market traded sideways when the 7-years +1.0bps to 3.395% and 10-years -1.0bps to 3.515%. Both 3-years and 5- years remained unchanged at 2.630% and 3.110% each.

The IRS yield was mixed when the (3Y) +3.5bps to 2.700% and (10Y) +1.0bps to 3.325%, but the (7Y) -3.5bps to 3.145%. (5Y) remained stable at 2.905%.

Against major currencies, the ringgit mostly on the weak footing as it depreciated; vs. EUR by 0.17% to 4.811, vs. GBP by 0.49% to 5.633, vs. AUD by 0.21% to 3.082, and vs. JPY by 0.24% to 3.678 but appreciated vs. CNY by 0.09% to 1.540. Regionally, the ringgit was mixed against its Asean peers. It strengthened; vs. IDR by slightly 0.02% to 3,433, and vs. VND by 0.09% to 5,459, but weakened against SGD by, 0.19% to 3.085, against THB by 0.35% to 7.897, and against PHP by 0.03% to 12.068.

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 4.1532 and 4.1600.

Source: AmInvest Research - 10 Nov 2021