• Unremarkable payroll data sends dollar lower

• MYR to fluctuate in the range of 4.1900 and 4.2110 against US dollar

Global Highlights

The dollar index ended the week a sharp 0.62% lower to 95.719 following the lukewarm non-farm payroll data. On the last month of 2021, the US economy added a mere 199K jobs (cons. 400k) down from 249K in November. Meanwhile, the unemployment rate declined further to 3.9%, the lowest since February 2020 (cons. 4.1%).

Equities closed lower when the Dow Jones slid 0.01% to 36,232 while the S&P 500 slipped 0.41% to 4,677. The UST 10-year benchmark yield added 4.1bps to 1.762%. Gold advanced 0.30% to US$1,797/oz.

The euro rebounded significantly by 0.56 % to 1.136. December’s preliminary inflation in the Eurozone figure showed a record high of a 5% y/y change, up from 4.9% in the previous month (cons. 4.7%). Also, retail sales in the bloc soared 7.8% y/y from 1.7% y/y (cons. 5.6%).

The British pound extended its upward trend as it rose 0.41% to 1.359. On the data front, the House Price Index in the UK rose 9.8% y/y, the fastest increase since 2007.

The Japanese yen strengthened 0.23% to 115.56 as the finance minister warned for the need of currency stability following the recent yen’s weakness against the dollar. The Japan’s market is closed on Monday (10 Jan 2022) due to the Coming-of-Age holiday.

In the meantime, the Chinese yuan firmed by 0.08% to 6.378 following the China Securities Regulatory Commission chairman's vow to avoid volatility and prevent big fluctuations after the stock market started the year on a weak footing.

Crude oil pulled back as the Brent lost 0.29% to US$82 per barrel while WTI fell 0.70% to US$79 per barrel due to production outages in Libya and supply concerns from the unrest in Kazakhstan.

Malaysia Highlights:

The ringgit snapped its multiple sessions of losses as it strengthened 0.15% to 4.208, and traded within the range of 4.2175 and 4.2025.

The local bourse’s FBM KLCI rose 0.64% to 1,543 on bargain hunting. Detailed transactions revealed that local institutions were net buyers with RM44.3mil inflow, being offset by the net selling from local retailers and foreign investors with RM24.0mil and RM20.3mil, respectively.

In the local bond market, the benchmark yields closed mixed. The 3-year +3.0bps to 2.850%, but the 5-year -2.0bps to 3.250%, 7-year -1.0bps to 3.470%, and 10-year -0.5bps to 3.680%.

The IRS yields were mixed as well when the (3Y) -1.0bps to 2.810%, and (7Y) +1.0bps to 3.265%, but the (5Y) and (10Y) remained flat at 3.070%, and 3.480%, respectively. KLIBOR -1.0bps to 2.010%.

Against major currencies, the ringgit was traded mixed. It appreciated vs. the EUR by 0.03% to 4.762, AUD by 0.17% to 3.011, and CNY by 0.07% to 1.516, but depreciated vs. the GBP by 0.23% to 5.702, and JPY by 0.20% to 3.642. Regionally, the ringgit was also mixed against its peers. It strengthened vs. the THB by 0.39% to 7.998, PHP by 0.46% to 12.202, but weakened vs. the SGD by 0.04% to 3.097, IDR by 0.13% to 3,411, and VND by 0.01% to 5,398.

MYR Outlook For The Day

We expect the MYR to trade between our support level of 4.1870 and 4.1900 while our resistance is pinned at 4.2110 and 4.2140

Source: AmInvest Research - 10 Jan 2022