• Yen continues to weaken

• MYR to fluctuate in the range of 4.1775 and 4.1936 against US dollar

Global Highlights

The dollar index fell 0.28% to 95.929, the lowest in three weeks. Preliminary estimates showed that the US goods trade deficit widened to an all-time high of US$97.78bil in November from US$83.2bil in the previous month. Meanwhile, new US Covid cases are at a record seven-day average of over 265,000 per day as of Tuesday, surpassing the previous high mark of about 252,000 average daily cases set on 11 Jan 2021. The new pandemic peak comes as the Delta and Omicron variants are circulating simultaneously across the country. However, the hospitalization rate remained lower than the peak of the Delta variant.

Equities closed on record as the Dow Jones rose 0.25% to 36,489 while the S&P 500 rebounded 0.14% to 4,793. The UST10- year benchmark yield climbed 6.8bps to 1.550%, the first time since 25 Nov 2021. Gold slipped 0.08% to US$1,805/oz.

The euro rose 0.34% to 1.135, the strongest for more than a month. Loans to households in the Euro Area rose 4.2% y/y in November, higher than 4.1% in the previous month and matching August's increase, which was the largest since November 2008.

The British pound was traded higher 0.42% at 1.349. The Covid-19 pandemic optimism came from British Health Minister Sajid Javid's remarks on Monday, saying that England will not get any new Covid-19 restrictions before the end of 2021 as the government awaits more evidence on whether the health service can cope with high infection rates.

The Japanese yen weakened 0.11% to trade at 114.95, approaching the 115 level as the safe-haven currency remained unfavourable amidst a risk-on mode.

In the meantime, the Chinese yuan strengthened by 0.01% to 6.368 amidst holiday-thin trading on Wednesday.

Crude oil continued to trade higher as crude inventories fell more than expected and Omicron fears remain subsided. The EIA report showed US crude oil inventories shrank by 3.576mil barrels last week, the 5th consecutive period of decline and compared with market forecasts of a 3.143mil decline. Brent rose 0.37% to US$79 per barrel while WTI added 0.76% to US$77 per barrel.

Malaysia Highlights:

The ringgit lost its rising momentum as it slightly firmed by 0.01% to 4.180, while traded in the range of 4.185 and 4.1803.

The FBM KLCI gained 0.33% to 1,545, recording its 6th consecutive session of higher closing. Detailed transactions showed that foreign investors and local retailers were net sellers with RM61.7mil and RM21.4mil each, while being offset by local institutions' net inflow.

The IRS yield curve were mixed as the (3Y) +1.0bps to 2.755%, (5Y) +0.7bps to 2.957%, and (10Y) +1.0bps to 3.390%, but the (7Y) remained at 3.195%. KLIBOR was flat again at 2.050%.

Against major currencies, the ringgit was mixed as it remained flat vs. JPY and vs. CNY at 3.641 and 1.523, respectively. But it depreciated vs. EUR by 0.13% to 4.737, vs. GBP by 0.30% to 5.621, and vs. AUD by 0.49% to 3.031. Against its regional peers, the ringgit was mixed as well as it weakened vs. SGD by 0.23% to 3.088, vs. IDR by 0.05% to 3,400, and vs. VND by 0.01% to 5,463, but strengthened vs. THB by 0.05% to 8.012, and vs. PHP by 0.40% to 12.060.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1725 and 4.1775 while our resistance is pinned at 4.1936 and 4.1986.

Source: AmInvest Research - 30 Dec 2021