• Preliminary PMI data pointing towards strong growth still

• MYR to fluctuate in the range of 4.1929 and 4.2044 against US dollar

Global Highlights

The dollar index edged lower by 0.06% to 96.491 amidst heavy first PMI data released as an early indicator of the global economy. The dollar pulled back following the better-than-forecasted manufacturing PMI preliminary data. The IHS Markit US Manufacturing PMI rose to 59.1 in November from a 10-month low of 58.4 in October, beating market forecasts of 59. However, the services PMI fell to 57 from 59, but still marked a strong growth.

Equities closed in the green when the Dow Jones rose 0.55% to 35,814 and S&P 500 climbed 0.17% to 4,691. The UST 10-year yield benchmark jumped 4.1bps to 1.665%. Gold extended losses as it declined by 0.86% to US$1,789/oz, erasing gains made since early this month.

The euro inched higher by 0.10% to close at 1.125, near its 16-month low. Despite the pick-up in Covid cases, one of the ECB board members stated that the plan to end the PEPP in March is still “valid”. On the data front, a preliminary PMI report showed that it rose further to 58.6 in November from 58.3 in October and above market expectations of 57.3. The services PMI also beat the market forecast at 56.6 vs. 53.5, pointing towards stronger economic activities.

The British pound lost 0.14% to 1.338. The IHS Markit/CIPS UK Manufacturing PMI increased to 58.2 in November from 57.8 in October, marking the fastest growth in 3 months, and well above market forecasts of 57.3. On the other hand, the services PMI edged lower to 58.6 from 59.1 but still indicating a strong growth above the 50-mark.

The Japanese yen weakened 0.23% to 115.14, the weakest level since 2017, fuelled by the differences of stance between the Fed and BoJ.

In the Meantime, the Chinese Yuan Weakened 0.11% to 6.392.

Crude oil rebounded as Brent soared 3.27% to US$82 per barrel while the WTI jumped 2.28% to US$78 per barrel, despite the announcement by the US to release millions of barrels of oil strategic reserves in coordination with China, India, South Korea, Japan and Britain. The US said that it would release a smaller-than-expected 50mil barrels, and can be offset by lower production level decision from OPEC+.

Malaysia Highlights:

The ringgit weakened again for the sixth consecutive days and reaching the weakest level since August 2021. It fell 0.29% to 4.1985 and traded at a high of 4.1985 and low of 4.1855.

The FBM KLCI ended the day lower by 0.26% to 1,523 points. Detailed transactions showed that retailers were net buyers with RM14.4mil while being offset by net selling from local institutions at RM13.5mil and foreign investors at RM0.9mil.

The local bond market remained lukewarm with the 3-year yield at +5.0bps to 2.740%, and 5-year +2.0bps to 3.170%, but both the 7-year and 10-year remained stable at 3.415% and 3.570% respectively.

The IRS yield curve shifted higher when the (3Y) +2.760%, (5Y) +2.0bps to 3.000%, (7Y) +2.6bps to 3.230%, and (10Y) remained unchanged at 3.400%. Elsewhere, the KLIBOR was steady at 1.950%.

Against major currencies, the ringgit appreciated vs. the GBP by 0.07% to 5.612, and vs. the AUD by 0.13% to 3.033 but depreciated vs. the EUR by 0.15% to 4.727, vs. the JPY by 0.19% to 3.649, and vs. the CNY by 0.11% to 1.522. Regionally, the ringgit strengthened vs. the SGD marginally by 0.01% to 3.071, and vs. the THB by 0.12% to 7.891, but weakened vs. the IDR by 0.23% to 3,396, vs. the PHP by 0.33% to 12.064, and vs. the VND by 0.27% to 5,401.

MYR Outlook For The Day

We expect the MYR to trade between our support levels of 4.1879 and 4.1929 while our resistance is pinned at 4.2044 and 4.2074.

Source: AmInvest Research - 24 Nov 2021