• Rising Covid-19 cases in Europe weigh on its currency

• MYR to fluctuate in the range of 4.1631 and 4.1727 against US dollar

Global Highlights

The dollar index rose 0.53% to 95.915 after data showed the US retail sales data surged more than market forecast despite the high inflation condition. On monthly changes, the US retail sales US retail sales swelled 1.7% in October compared to 1.4% forecast and 0.8% growth in September. Other than that, industrial production rose 1.6% m/m in October, bouncing back from 1.3% decline in September.

On the political front, both the US President and China’s Premier turned down their confrontation tone and avoiding conflict during a video call meeting while sticking to their initial standpoint. Although the meeting yielded no immediate outcome, it calmed down the geo-political risk sentiment at some level for the time being.

Equities were back on the green when the Dow Jones rose 0.15% to 36,142 while the S&P500 climbed 0.39% to 4,701. The UST 10-year benchmark yield added 1.9bps to end the day at 1.634%. Gold trimmed last week’s losses as it dropped 0.66% to US$1,851/oz.

The Euro retained its losing position as it fell 0.42% to 1.132. The second estimate showed that the Eurozone economy expanded 3.7% y/y in 3Q21, following a record 14.2% growth in the previous quarter and in line with the initial estimates. Concerns renewed when there is a surging number of new Covid-19 cases in the European area, which could cause another round of lockdown.

Conversely, the British pound gained 0.10% to 1.343 following strong development in the labour market. Report showed that the unemployment rate dropped to 4.3% in September after the furlough scheme ended. The figure is lower than forecast of 4.4% and August’s 4.5%. Also, the number of people claiming unemployment benefits in the UK declined by 14.9K in October, which marked the 8th consecutive decline.

The Japanese yen weakened significantly by 0.61% to 114.82, hitting lowest level in four years amidst broad strengthening of the dollar. On the pandemic front, Japan has fully vaccinated 75.5% of its total population of 126mil people as of 14th

November, Which Is Among the Highest in G7 Countries.

In the meantime, the Chinese yuan depreciated by 0.15% to close at 6.393.

Crude oil was mixed on concerns over rising Covid-19 cases in Europe. Brent added 0.46% to US$82.4 per barrel while WTI lost 0.15% to US$80.8 per barrel.

Malaysia Highlights:

The ringgit weakened 0.12% to close the day at 4.166 and traded with high of 4.1675 and low of 4.159. On the pandemic front, Malaysia will roll-out the walk-ins booster shots for those eligible starting from 22nd November 2021.

The FBM KLCI ended the day marginally higher on bargain hunting by 0.04% to 1,523, the smallest gains amidst mixed sentiment in the regional share market.

Detailed transactions showed that the local institutions were the net sellers with RM74.2mil position while being offset by the net buying position of RM56.8mil and RM17.4mil by local retailers and foreign investors, respectively.

The IRS yield curve shifted higher when (3Y) +2.5bps to 2.770%, (5Y) +4.5bps to 3.000%, (7Y) +3.8bps to 3.225%, and (10Y) +3.0bps to 3.400%. Elsewhere, the KLIBOR remained at 1.950% after it jumped from 1.940% during last Friday.

Against major currencies, the ringgit was mixed. It appreciated; vs. EUR by 0.63% to 4.734, vs. AUD by 0.18% to 3.058, vs. JPY by 0.36% to 3.635, and vs. CNY by 0.04% to 1.535, but depreciated vs. GBP by 0.48% to 5.611. Regionally, the ringgit was mixed as well as it strengthened; vs. SGD by 0.08% to 3.078, vs. IDR by 0.02% to 3,413, and vs. PHP by 0.23% to 12.082, but weakened vs. THB by 0.03% to 7.864, and vs. VND by 0.13% to 5,435.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1576 and 4.1631 while our resistance is pinned at 4.1727 and 4.1777.  

Source: AmInvest Research - 17 Nov 2021