• Risk sentiment continues to improve ahead of Christmas

• MYR to fluctuate in the range of 4.2032 and 4.2180 against US dollar

Global Highlights

The dollar index fell 0.43% to 96.076 following the final revision of the US GDP data. The data showed the economy grew by 2.3% on an annualized rate (upwardly revision of 0.2%), or 4.7% y/y. On the pandemic development, one South African study suggested a lower risk of hospitalisation with Omicron.

Equities extended its gains for the second consecutive session as the Dow Jones rose 0.74% to 35,754 while the S&P 500 climbed 1.02% to 4,697. The UST 10-year benchmark yield eased slightly by 1.02bps to 1.452%. Gold surged 0.80% to US$1,804/oz, its highest in a month.

The euro gained 0.36% to 1.133. We are seeing more restrictions imposed by European states to curb the Omicron outbreak.

The British pound surged 0.68% to 1.335 following the UK government’s decisions to not impose tougher restrictions before the Christmas holiday amidst surging Covid cases in the country. The UK recorded over 100K cases for the first time on Wednesday. On the data front, the UK economy grew by 6.8% y/y, 0.2% higher than the previous estimate.

The Japanese yen remained flat at 114.10 following the release of minutes from the last BoJ’s meeting. The Chinese yuan, meanwhile, firmed 0.03% to 6.370.

Crude oil extended its gains due to the larger-than-expected drop in crude oil stock during the week ended 17 December 2021. The crude oil stock declined by 4.7mil barrels compared to the forecast of 2.7mil barrels. Brent surged 1.77% to US$75 per barrel while the WTI soared 2.31% to US$73 per barrel.

Malaysia Highlights:

The ringgit trimmed some gains as it weakened by 0.09% to 4.213 and traded with high of 4.215 and low of 4.205

The FBM KLCI jumped 0.52% to 1,500, in line with positive regional performance. The higher closing was driven by net foreign buying with a RM64.3mil position, offset by net selling coming from local institutions and retailers.

In the local bond market, the MGS benchmarks were mixed with the 3-year and 10-year both flat at 2.830% and 3.540%, while the 5-year +2.0bps to 3.170%, and 7-year -1.0bps to 3.405%.

The IRS yields were mixed as well with the (10Y) -4.0 bps to 3.330%, but the (3Y) +1.0bps to 2.715%, (5Y) +0.5bps to 2.910%, (7Y) +1.8bps to 3.163%. KLIBOR was unchanged at 2.040%.

Against major currencies, the ringgit remained flat vs. EUR at 4.754, but weakened vs. GBP by 0.39% to 5.592, vs. AUD by 0.47% to 3.014, vs. JPY by 0.02% to 3.687, and vs. CNY by 0.10% to 1.513. Against its Asean peers, the ringgit was mixed. It appreciated vs. PHP by 0.32% to 11.910, and vs. VND by 0.06% to 5,445, but depreciated vs. SGD by 0.04% to 3.085, and vs. IDR by 0.19% to 3,392. The ringgit was flat at 8.013 vs. THB.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1972 and 4.2032 while our resistance is pinned at 4.2180 and 4.2240.

Source: AmInvest Research - 23 Dec 2021