• Focus shifts to US inflation data as Omicron fears wane

• MYR to fluctuate in the range of 4.2120 and 4.2255 against US dollar

Global Highlights

The dollar index fell further by 0.49% to 95.894, retreating from its recent highs due to encouraging Omicron development. One of WHO top officials said that Omicron does not appear to cause more a severe disease than previous Covid variants, and is "highly unlikely" to fully dodge vaccine protections. With Omicron fears subsiding, investors and traders will now look at upcoming inflation data for rate hike expectations. Among local data, job openings in the US increased to 11.03mil in October, easily beating market expectations of 10.37mil.

Equities continued its rise, with the Dow Jones inching higher 0.10% to 35,755 while the S&P 500 added 0.31% to 4,701. The UST 10-year yield benchmark climbed 4.7bps to 1.521%. Gold was little changed at US$1,783/oz.

The euro jumped 0.67%% to its highest level since mid-November at 1.134.

The British pound fell 0.30% to 1.320, the weakest level since November 2020 on the back of a worsening local pandemic outbreak. The UK prime minister imposed tighter restrictions in England which include working from home, wearing masks in public places, and the usage of vaccine pass in large social occasions.

The Japanese yen strengthened slightly by 0.06% to 113.67 following the release of final GDP figures. The local economy shrank by 0.9% q/q in 3Q21, more than initial estimate of 0.8%. In 2Q21, it grew by a marginal 0.5%. The decline in growth can be attributed to the resurgence of Covid cases and supply chain disruptions.

In the meantime, the Chinese yuan was up by 0.35% to 6.344, the strongest in more than three years.

Crude oil was firmer when the Brent rose 0.50% to US$76 per barrel while the WTI climbed 0.43% to US$72 per barrel. US crude oil stocks edged lower by 0.24mil barrels in the latest week, the second consecutive decline, but well below market forecasts of a 1.70mil drop.

Malaysia Highlights:

The ringgit appreciated by 0.18% to 4.225, after reaching the 4.23 level for four consecutive sessions. It was traded with a high of 4.2323 and low of 4.2162.

The FBM KLCI shed 0.26% to 1,494, driven by the selling of property, healthcare, and consumer product sectors. Detailed transactions revealed that foreign investors were once again the sole net sellers with RM70.4mil, being offset by local institutions and retailers.

Local ringgit bond remained lukewarm, trading sideways. The 3-year, 7-year and 10-year yield remained unchanged at 2.660%, 3.405%, and 3.540%, but the 5-year was +0.5bps to 3.115%.

The IRS yield curve shifted higher, especially in the belly part. The (5Y) +2.5bps to 2.905%, and (7Y) +0.3bps to 3.148%, but the (3Y) and (10Y) stabled. Elsewhere, the KLIBOR remained at 2.00% after it rose 1.0bps from 1.990% on Wednesday.

Against major currencies, the ringgit appreciated vs. EUR by 0.07% to 4.769, vs. GBP by 0.20% to 5.600, vs. JPY by 0.23% to 3.718, but depreciated vs. AUD by 0.35% to 3.014, and vs. CNY by 0.19% to 1.502. Regionally, the ringgit weakened vs, SGD by 0.05% to 3.097, vs. THB by 0.27% to 7.926 and vs. VND by 0.26% to 5,442, but strengthened vs. IDR by 0.03% to 3,398. PHP remained unchanged at 11.908.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.2080 and 4.2120 while our resistance is pinned at 4.2255 and 4.2315.

Source: AmInvest Research - 9 Dec 2021