• US inflation hits 30-year high

• MYR to fluctuate in the range of 4.2000 and 4.2220 against US dollar

Global Highlights

The dollar index shed 0.18% to 96.097 following the release of US CPI data. The US annual inflation rate accelerated to 6.8% in November, above October's 6.2% and the highest since June of 1982. It marked the 9th consecutive month that inflation stayed above the Fed's 2% target, thus putting pressure on the Fed’s rate hike bet. Other than that, the University of Michigan's consumer sentiment for the US increased to 70.4 in December from a 10-year low of 67.4 in November.

Equities resumed its bullish trend as the Dow Jones added 0.60% to 35,971 while the S&P 500 rose 0.95% to 4,712. The UST10- year benchmark yield edged lower by 1.5bps to 1.484%. Gold rose 0.42% to US$1,783/oz.

The euro inched higher by 0.18% to 1.131 as the dollar weakened and amid rising Covid cases in Europe countries.

The British pound climbed 0.39% to 1.327. The British economy expanded 0.1% month-on-month in October, the lowest performance in 3 months (cons. 0.4%). The UK GDP is now 0.5% below its pre-coronavirus pandemic level in February 2020.

The Japanese Yen Was Up Slightly by 0.04% to 113.44.

In the meantime, the Chinese yuan strengthened by 0.12% to 6.370 after Beijing reined in currency speculation.

Crude oil closed in the green as market players assessed Omicron’s effects on oil demand. Brent rose 0.98% to US$75 per barrel while WTI climbed 1.03% to US$71 per barrel.

Malaysia Highlights:

The ringgit appreciated by 0.09% to close the week at 4.213, having traded at a high of 4.2263 and low of 4.212.

The FBM KLCI fell 0.86% to 1,489 dragged by glove makers. Detailed transactions showed that foreign investors remained net sellers with RM73.1mil while being offset by local institutions and retailers with RM1.0mil and RM72.1mil.

In the local bond market, bonds were traded at lower prices when the 3-year yield was at +9.0bps to 2.750%, 5-year +1.5bps to 3.150%, 7-year +5.0bps to 3.460%, and 10-year +2.0bps to 3.580%.

The IRS yield curve shifted higher as well with the (3Y) +3.0bps to 2.755%, (5Y) +1.0bps to 2.950%, (7Y) +2.3bps to 3.187%, and (10Y) +1.2bps to 3.342%.

Against major currencies, the ringgit was mixed as it appreciated vs. EUR by 0.45% to 4.752, vs. GBP by 5.563, vs. AUD by 0.26% to 3.012, and vs. JPY by 0.01% to 3.713, but depreciated vs. CNY by 0.03% to 1.512. Regionally, the ringgit outperformed against its peers. It strengthened vs. SGD by 0.22% to 3.084, vs. THB by 0.29% to 7.993, vs. IDR by 0.12% to 3,411, vs. PHP by 0.20% to 11.951, and vs. VND by 0.33% to 5,461.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1940 and 4.2000 while our resistance is pinned at 4.2220 and 4.2300.

Source: AmInvest Research - 13 Dec 2021