• Oil jumps over 3% on riskier sentiment

• MYR to fluctuate in the range of 4.2157 and 4.2400 against US dollar

Global Highlights

The dollar index rose edged lower by 0.03% to 96.302, but still higher than its recent lows as the market’s risk mood improves further. On the data front, the US trade deficit fell to US$67.1bil in October from US$81.4bil in September (cons. US$66.8bil).

Equities extended its gains for the second consecutive session as the Dow Jones surged 1.40% to 35,719 and S&P 500 soared 2.07% to 4,687. The UST10-year benchmark yield climbed 3.9bps to 1.473%, signalling lower prices. Gold added 0.31% to US$1,784/oz.

The euro fell 0.16% to 1.127. The third GDP estimate showed that the Eurozone's growth rate remained positive as it was revised to 3.9% from 3.7% in the previous estimate. Also, the ZEW Indicator of Economic Sentiment for the Eurozone climbed to 26.8 in December, its highest since September 2021.

The British pound was also lower, down by 0.15% to 1.324. Data from mortgage lender Halifax showed British house prices growing at the fastest pace in 15 years on a rolling quarter basis, reflecting a lack of homes, a strong job market and low borrowing costs.

The Japanese yen weakened by 0.11% to 113.60, resuming the bearish trend prior to Omicron fears.

In the meantime, the Chinese yuan strengthened by 0.16% to 6.366, buoyed by the PBoC’s decision to inject liquidity and robust traded data. Exports from China expanded 22% y/y to a fresh record high of US$325.5bil in November, easing sharply from 27.1% in October (cons. 19%).

Crude oil continued to be bullish as the Brent added 3.23% to US$75 per barrel, while the WTI rose 3.68% to $72 per barrel. This is due to waning Omicron fears and also delayed return of Iranian crude.

Malaysia Highlights:

the ringgit little remained steady at 4.233, lacking catalysts in the market. It was traded at a high of 4.235 and low of 4.228.

On another note, the Keluarga Malaysia Maximum Price Control Scheme (SHMKM) will take effect from today until the end of Dec 2021. The scheme’s purpose is to stabilize the price of necessities and ensure adequate supply in the market.

The FBM KLCI consolidated previous session’s losses as it gained 0.98% to close at 1,498. Detailed transactions showed that foreign investors continued to be net sellers with RM33.6mil net position while local institutions and retailers were net buyers with RM3.8mil and RM30.8mil, respectively.

In the local bond market, bond prices traded sideways with the 3-year yield at -1.0bps to 2.660%, while 5-year, 7-year and 10- year remained unchanged at 3.110%, 3.405%, and 3.540% respectively.

The IRS yield curve steepened with the (3Y) at +2.0bps to 2.675%, (5Y) +3.0bps to 2.880%, (7Y) +4.5bps to 3.145%, and (10Y) unchanged at 3.310%.

Against major currencies, the ringgit was mixed, as it appreciated vs. EUR by 0.21% to 4.772, and vs. JPY by 0.04% to 3.727, but depreciated vs. GBP by 0.04% to 5.611, vs. AUD by 1.01% to 3.003, and vs. CNY by 0.16% to 1.504. Regionally, the ringgit was also mixed. It strengthened vs. VND by 0.54% to 5,456, but weakened vs. SGD by 0.19% to 3.096, vs. THB by 0.69% to 7.947, vs. IDR by 0.44% to 3,397, and vs. PHP by 0.06% to 11.908.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.2117 and 4.2157 while our resistance is pinned at 4.2400 and 4.2440.

Source: AmInvest Research - 8 Dec 2021