• Oil expected to be volatile following US calls for reserve release

• MYR to fluctuate in the range of 4.1738 and 4.1854 against US dollar

Global Highlights

The dollar index extended its pullback as it fell 0.30% to 95.544. Among local data, new claims of US unemployment benefits fell to 268K during week ended November 13, which marked another new pandemic low. But it was lower than market expectations of 260K as employers avoided layoffs and many workers quit. New claims are now approaching the ideal range for healthy labour market conditions. But still, they remained above their pre-pandemic weekly average of 218K.

Equities were mixed when the Dow Jones declined 0.17% to 35,871 while the S&P 500 rose 0.34% to 4,705. The UST 10-year yield edged lower by 0.3bps to 1.586%. Gold fell 0.46% to US$1,859/oz.

The euro climbed 0.46% to 1.137 reflecting weaker greenback. Passenger car registrations in the EU were down by 30.3% y/y to 665K units in October, the fourth consecutive month of decline.

The British pound added 0.05% to close at 1.349, which is its highest level this week.

The Japanese yen weakened marginally by 0.16% to close at 114.26 following a report that the new Japanese PM will unveil bigger-than-expected stimulus package as much as £78.9tril to counter the pandemic’s adverse effects and to push the inflation towards the 2% target.

The Chinese yuan slid by 0.13% to 6.386 amidst expectations that the PBoC is likely to tolerate an appreciation of the currency in the near term.

Crude oil was in the green when Brent climbed 1.20% to US$81 per barrel and WTI added 0.83% to US$79 per barrel. Following the US requests to major oil consuming countries to tap into oil reserve recently, Chinese authorities announced that crude oil release works were currently in progress although the amount released is yet to be confirmed.

Malaysia Highlights:

The ringgit extended its losing position marginally as it slipped 0.02% to close at 4.181, its weakest since early October. The local currency was traded between a high of 4.182 and low of 4.174.

The local bourse’s FBM KLCI dipped 0.09%, or 1.34 points, to end the day at 1,524, in tandem with overall poor performances of Asean stocks. Detailed transactions showed that local institutions remained the net sellers with a RM75.6mil position, while both retailers and foreign investors were net buyers with RM23.0mil and RM52.6mil, respectively.

The local bond market traded sideways with the 3-year yield +0.5bps to 2.695%, 5-year -2.0bps to 3.145%, 7-year -0.5bps to 3.445%, while the 10-year remained unchanged at 3.580%.

The IRS curve steepened and shifted lower overall. The (3Y) -3.5bps to 2.765%, (5Y) -2.0bps to 3.020%, (7Y) -2.0bps to 3.225%, and (10Y) -1.0bps to 3.420%. Elsewhere, the KLIBOR remained stable at 1.950%.

Against major currencies, the ringgit strengthened against the JPY by 0.10% to 3.659, and the CNY by 0.07% to 1.527, but weakened vs. the EUR by 0.19% to 4.739, vs. the GBP by 0.43% to 5.640, and vs. the AUD by 0.07% to 3.046. Against its Asean peers, the ringgit was mostly on the weak footing. It depreciated vs. the SGD by 0.03% to 3.078, vs. the THB by 0.21% to 7.799, vs. the IDR by 0.19% to 3,401, and vs. the PHP by 0.37% to 12.024. But it appreciated marginally vs. the VND by 0.01% to 5,419.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1698 and 4.1738 while our resistance is pinned at 4.1854 and 4.1894.

Source: AmInvest Research - 19 Nov 2021