• New restrictions in Europe dent hopeful recovery prospects

• MYR to fluctuate in the range of 4.2107 and 4.2306 against US dollar

Global Highlights

The dollar index edged lower by 0.01% to 96.551 following a statement by a key figure in the Biden administration's Build Back Better bill that he would not support the package, despite the vows of support from US Senate. On the pandemic development, health experts warned that the US is seeing increasing dual variant new daily cases ahead of Christmas holidays.

Equities were glaringly in the red due to the sell-off over Omicron fears. The Dow Jones tumbled 1.23% to 34,932 while the S&P 500 dropped 1.14% to close at 4,568. The UST10-year benchmark yield was sent higher by 2.04bps to 1.423%. Gold shed 0.40% to US$1,791/oz.

The euro rose 0.35% to 1.128 as more countries imposed more restrictions due to the surging cases across the continent.

The British pound fell 0.29% to 1.321 following British Health Minister Sajid Javid remarks where he declined to rule out further restrictive measures before Christmas while several countries announced restrictions for travellers arriving from the UK.

The Japanese yen firmed slightly by 0.02% to 113.61 due to its safe-haven status and a lingering hawkish BoJ. In the meantime, the Chinese yuan remained flat at 6.376 after the PBoC cut its lending benchmark loan prime rate. The PBoC slashed its oneyear loan prime rate by 5 bps to 3.80 percent, the first changes since April 2020, to support growth in the slowing economy amid property debt woes and persistent Covid-19 outbreaks, while keeping the 5-year prime rate unchanged at 4.65%.

Market players’ worries on global growth prospect guided the oil price to the lowest in two weeks. Brent plunged 2.72% to US$72 per barrel while WTI nose-dived 3.71% to US$68 per barrel.

Malaysia Highlights:

The ringgit was weakened by 0.14% to 4.226, after trading at an intraday high of 4.230 and low of 4.2192 amidst risk-off sentiment.

The local bourse’s FBM KLCI trimmed its previous gains as it fell 0.54% to 1,494, in tandem with the global sell-off. It was driven by the foreign investors’ net selling position of RM48.8mil, while being offset by the local institutions and retailers net buying activities.

The IRS yield curve steepened when the (3Y) -3.5bps to 2.670%, (5Y) -4.0bps to 2.880%, (7Y) -2.2bps to 3.130%, and (10Y) +1.0bps to 3.340%. KLIBOR remained untouched at 2.040%.

Against major currencies, the ringgit was mixed as it strengthened against EUR by 0.49% to 4.760, vs. GBP by 0.71% to 5.579, vs. AUD by 0.83% to 2.997, but weakened vs. JPY by 0.18% to 3.718, and vs. CNY by 0.24% to 1.509. Against its regional peers, the ringgit was also mixed as it appreciated vs. SGD by 0.04% to 3.090, vs. THB by 0.66% to 7.952, and vs. IDR by 0.18% to 3,408, but depreciated vs. PHP by 0.35% to 11.819, and vs. 0.18% to 5,425.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1967 and 4.2107 while our resistance is pinned at 4.2306 and 4.2346.

Source: AmInvest Research - 21 Dec 2021