• Crude oil trades higher ahead of OPEC+ meeting

• MYR to fluctuate in the range of 4.1727 and 4.1855 against US dollar

Global Highlights

The dollar index surged 0.57% to 96.213 during its first trading day of 2022. Among local data, the final IHS Markit US Manufacturing PMI was revised downward to 57.7 in December from a preliminary of 57.8, but still pointing to a strong expansion in factory activities.

Equities started 2022 on a stronger note as the Dow Jones rose 0.68% to 36,585 and the S&P 500 climbed 0.64% to 4,797, with both recording new record highs. The 10-year UST benchmark yield soared 11.8bps to 1.628% on the prospect of tighter monetary policy. Gold meanwhile, tumbled sharply by 1.52% to US$1,801/oz.

Due to the higher dollar, the euro fell 0.64% to 1.130. The final eurozone IHS Markit Manufacturing PMI stood at 58 in December, the lowest level since February 2021. The British pound was also on weaker footing as it fell 0.38% to 1.348.

The Japanese yen slid further by 0.21% to 115.32, almost touching the weakest level since 2017. The Chinese yuan was unchanged at 6.356.

Crude oil traded higher ahead of an OPEC+ meeting that is scheduled to take place today. OPEC+ is expected to stick to its plans to increase output in February, meeting 400K bpd as it has done each month since August 2021. Brent jumped 1.54% to US$79 per barrel, while WTI rose 1.16% to US$76 per barrel.

Malaysia Highlights:

The ringgit took a breather at the start of 2022, easing by 0.15% to 4.173. Throughout the day, it was traded in the range of 4.1742 and 4.1658.

The local bourse’s FBM KLCI trimmed some gains when it dropped 1.18% to 1,549, driven by net selling from local institutions and retailers with RM18.1mil and RM19.2mil respectively with foreign buying of RM37.3mil.

In the local bond market, benchmark prices were mostly unchanged. The 7-year yield was -1.0bps to 3.410%, but the 3-year, 5- year and 10-year yields were flat at 2.800%, 3.165%, and 3.585% respectively.

The IRS yields shifted higher when the (3Y) +4.0bps to 2.780%, (5Y) +5.0bps to 2.990%, (7Y) +1.5bps to 3.205%, and (10Y) +1.8bps to 3.398%. KLIBOR stood at 2.050%.

Against major currencies, the ringgit was mixed as it strengthened vs. the AUD by 0.01% to 3.618, JPY by 0.07% to 3.618, and CNY by 0.01% to 1.523, but eased vs. the EUR by 0.39% to 4.783, and GBP by 0.20% to 5.642. Regionally, the ringgit was also mixed as it fell vs. the SGD by 0.21% to 3.092, IDR by 0.13% to 3,419, PHP by 0.16% to 12.223, and VND by 0.12% to 5,465, but appreciated vs. the THB by 0.09% to 7.973.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1697 and 4.1727 while our resistance is pinned at 4.1855 and 4.1885.

Source: AmInvest Research - 4 Jan 2022