• Easing Omicron fears boost market

• MYR to fluctuate in the range of 4.1972 and 4.2100 against US dollar

Global Highlights

The dollar index stabilized as it fell only slightly by 0.06% to 96.019, after logging in a 0.4% drop the previous session, driven by the easing of Omicron fears and a fresh new batch of US economic data.

Reports showed that personal income rose by 0.4% m/m in November, slightly lower than 0.5% m/m in October while personal spending climbed by 0.6% m/m compared to previous month’s 1.4% m/m. The Fed’s favoured indicator of inflation, the PCE Price Index, rose 5.7% y/y, the highest in 39 years, bolstering the case of a “non-transitory” inflation.

Equities continued to improve as the Dow Jones rose 0.55% to 35,951 while the S&P 500 added 0.62% to 4,726. The risk-on sentiment also sent the UST10-year benchmark yield higher by 4.1bps to 1.493%. Gold added 0.28%% to US$1,809/oz.

The euro was up slightly by 0.01% to 1.133. The British pound rose 0.42% to 1.341 as it took advantage of the risk-on sentiment and weaker dollar.

The Japanese yen slid by 0.25% to 114.39, the weakest level in a month. In the meantime, the Chinese yuan eased slightly by 0.01% to 6.370 as the central bank's guidance continued to be on the weaker side.

Crude oil continued its bullish trend on the back of the subsiding Omicron fears. Brent surged 2.07% to US$77 per barrel and WTI soared 1.42% to US$74 per barrel.

Malaysia Highlights:

The ringgit strengthened 0.30% to 4.200, the strongest point in more than a month. It was traded with high of 4.2133 and low of 4.1995.

The FBM KLCI extended its gains, jumping 1.07% to 1,516, in parallel with the global risk-on mode. Local institutions and retailers were net buyers in the market with RM37.7mil and RM32.7mil, respectively, offset by the selling position of foreign investors with RM70.4mil.

The local bond market saw lower trading activities during this holiday season. The benchmark 3-year was +1.0bps to 2.840%, and the 10-year +2.0bps to 3.560%, but the 5-year and 7-year remained unchanged at 3.170% and 3.405%.

The IRS yield curve shifted higher as the (3Y) +2.0bps to 2.735%, (5Y) +4.0bps to 2.950%, (7Y) +3.2bps to 3.195%, and (10Y) +4.5bps to 3.375%. KLIBOR rose 1.0bps to 2.050%.

Against major currencies, the ringgit was mixed as it weakened vs. EUR by 0.01% to 4.755, vs. GBP by 0.58% to 5.625, and vs. AUD by 0.93% to 3.042, but strengthened vs. JPY by 0.47% to 3.670, and vs. CNY by 0.27% to 1,517. Against its regional peers, the ringgit was mostly underperformed. It depreciated vs. SGD by 0.13% to 3.089, vs. THB by 0.46% to 7.976, vs. IDR by 0.10% to 3,389, vs. PHP by 0.03% to 11.907, but appreciated vs. VND by 0.37% to 5,465.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1922 and 4.1972 while our resistance is pinned at 4.2100 and 4.2150.

Source: AmInvest Research - 24 Dec 2021