• Major markets regain composure following Omicron scare

• MYR to fluctuate in the range of 4.2303 and 4.2633 against US dollar

Global Highlights

The dollar index stabilized as investors weighed concerns over Omicron variant and the interest rate hike expectations. It rose 0.26% to 96.341. According to the World Health Organization (WHO), the new variant poses high infection risk, while more countries impose border closures which can dampen the economic recovery. On the data front, the number of contracts to buy sub-sale properties in the US rose 7.5% m/m in October, up from 2.4% contraction from the previous month (cons. 0.9% m/m).

Equities recovered some losses with the Dow Jones rising 0.68% to 35,136 while the S&P 500 climbed 1.32% to 4,655. The UST 10-year yield soared 2.5bps to 1.499%%. Gold declined by 1.00% to US$1,785/oz.

The euro fell 0.23% to close at 1.129 amidst worries over new variant infections, added with the ongoing pandemic outbreak across the region. Among local data, the final consumer confidence report showed that the headline indicator fell to -6.8 in October, the lowest since May 2021.

The British pound slipped 0.16% to 1.332. On the data front, consumer credit in the UK rose by £0.7bil in October, while the net borrowing of mortgage debt by individuals amounted to £1.6bil, lower than the £9.3bil in September.

The Japanese yen depreciated 0.13% to 113.53 following its sharp gains on Friday. PM Fumio Kishida announced that Japan will bar entries to all foreign nationals starting today (30 November 2021) to curb the Omicron variant.

In the meantime, the Chinese yuan strengthened slightly by 0.08% to 6.388, holding its position amidst new variant concerns.

Crude oil closed in the green on Monday as the market players considered Friday’s crash as an overreaction. Brent gained 0.99% to US$73 per barrel while WTI soared 2.64% to US$70 per barrel.

Malaysia Highlights:

The ringgit strengthened marginally by 0.01% to close the day at 4.238, testing the 4.24 level, which is the weakest since August 2021. It was traded with high of 4.244 and low of 4.236.

The FBM KLCI fell 0.11% to 1,511 points, driven by the net buying position of RM46.5mil from local institutions and retailers while being offset by net selling from foreign investors.

Over to the local bond market, most yields remained unchanged. The 3-year was at 2.700%, 7-year at 3.415%, and 10-year at 3.530%. The 5-year was +2.0bps to 3.145%.

The IRS yield curve shifted lower with the (3Y) -2.0bps to 2.665%, (5Y) -0.5bps to 2.925%, (7Y) -1.0bps to 3.145%, but (10Y) unchanged at 3.320%. Elsewhere, KLIBOR stabled at 1.970%.

Against major currencies, the ringgit mostly on the losing side as it weakened vs. EUR by 0.19% to 4.784, vs. GBP by 0.21% to 5.665, vs. AUD by 0.30% to 3.030, and vs. CNY by 0.01% to 3.729, but strengthened vs. JPY by 0.38% to 3.729. Regionally, the ringgit also closed on the red. It depreciated vs. SGD by 0.18% to 3.097, vs. THB by 0.12% to 7.950, vs. IDR by 0.26% to 3,379, and vs. PHP by 0.04% to 11.884, but appreciated vs. VND by 0.05% to 5,352.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.2263 and 4.2303 while our resistance is pinned at 4.2633 and 4.2673.

Source: AmInvest Research - 30 Nov 2021