• Tensions between Western bloc and Russia ease slightly after talks. Nonetheless, both parties continue to trade jabs over Ukraine.

Global Highlights

US dollar - The US Dollar Index slipped by 0.40% to 96.989 with market calmer as tensions over Ukraine slightly cooled down.

US equities – On the back of the relieving news, the equity market gained, where the Dow Jones Industrial Average went up by 1.22% to 34,989, the Nasdaq by 2.53% to 14,140 and the S&P 500 by 1.58% to 4,471. The UST-10y is now at 2.043, 5.59bps higher than the previous day.

Euro - The euro closed 0.46% stronger at 1.136 as the market welcomed the easing tensions over Ukraine. The Euro Area’s growth number in the fourth quarter was reported at 0.3% q/q, within consensus expectation. The slower growth reflected the sudden spike of Omicron-related cases, which hurt the manufacturing and the services sector due to illness or movement restrictions imposed by authorities.

British pound - The pound rose 0.07% to 1.354. The UK’s unemployment rate continued to remain at 4.1% in December 2021. On the other hand, wages grew by 4.3% y/y, adding more worries on inflation pressure.

Japanese yen - The yen increased by 0.06% to 115.61. On macro news, the fourth quarter growth numbers (preliminary) suggested that Japanese economy grew by 1.3% q/q, slightly lower than consensus expectation of 1.4% q/q. The main contributor were household consumption and business investment, since restrictions were less stringent in the last quarter.

Chinese yuan - The yuan was weaker by 0.28% to 6.339.

Korean won – The won firmed 0.35% to 1,199.79.

Australian dollar – The Aussie edged up 0.35% to 0.715. The latest minutes by the Reserve Bank of Australia (RBA) suggested that its board members will only adjust the interest rates if wages improve.

Commodities Highlights

Crude oil – The ongoing tensions between the Western bloc and Russian over Ukraine is cooling off, pushing down prices of major commodities. The WTI was lower at US$92.07 per barrel, and Brent was also lower at US$93.28 per barrel.

Gold - Gold declined by 0.94% to US$1,854/oz.

Malaysia Highlights

Malaysian Ringgit – The local currency slid by 0.10% to 4.186.

KLSE – The FBM KLCI increased by 1.00% to 1,600, as the economy remained in the recovery phase despite higher cases relating to Omicron.

Fixed Income – The MGS yields were lower in the shorter tenors, including the 3-year, down by 2.0bps to 2.828% while the 5-year was lower by 0.2bps to 3.311%. The 10-year added 0.3bps to 3.694.

Rates – The IRS yields for the 3Y remained at 935%, 5Y up by 2.5bps to 3.210%, 7Y up by 1.5bps to 3.375%, and 10Y increased by 1.5bps to 3.585%. KLIBOR remained at 1.970%.

Against major currencies – The ringgit was lower against most Asian currencies including the JPY, CNY, SGD, THB and IDR. The currency was higher against the EUR, GBP, AUD, PHP and VND.

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.1845 and 4.1875 while our resistance is pinned at 4.1930 and 4.1960.

Source: AmInvest Research - 16 Feb 2022