• Brent Hits 14-year High
• MYR to fluctuate in the range of 4.1730 and 4.1950 against the USD

Global Highlights

Dollar index – The greenback surged 0.65% to 99.293, boosted by safehaven flows induced by crude oil’s supply woes after the commodity hit 14- year high as Western allies considered banning Russian crude oil.

US equities – Wall Street turned red as the Dow Jones tumbled 2.37% to 32,817, the S&P 500 dropped 2.95% to 4,201, while the tech heavyweight Nasdaq fell 3.62% to 12,831. The benchmark UST 10-year yield lost 4.3bps to close at 1.773%.

Euro – The euro shed 0.68% to 1.085, its lowest since May 2020 as the Russia-Ukraine war intensified. This week, market players will focus on the European Central Bank’s projections during its upcoming meeting on Thursday without any change of its key interest rate.

British pound – The pound dropped 0.95% to 1.310, a level we haven’t seen since December 2020. The Halifax House Price Index jumped 10.8% y/y in February 2022, faster than the 9.7% increase in the previous month, and the fastest pace since June 2007.

Japanese yen – The yen weakened 0.44% to 115.32, amidst a whipsaw trend for these past few weeks due to the stronger dollar.

Chinese yuan – The yuan weakened slightly by 0.02% to 6.321 but remained near its four-year high. Against the currency basket of major trading partners, the yuan surged to an all-time high. According to data, China’s trade surplus widened to US$115.9bil in January and February 2022 combined, far above the market’s forecast of US$99.5bil, driven by a 16.3% y/y increase in exports and 15.5% y/y growth in imports.

Korean won – The won eased 1.05% to 1,226.9, the weakest level since May last year.

Australian dollar – The Aussie dollar pared some gains from previous session as it slid 0.72% to trade around 0.732 amidst rising commodities prices. The Australian Industry Group Australian Performance of Services Index jumped to 60 in February of 2022 from 56.2 in the prior month. It was the highest reading since May of 2021 and the third consecutive month of growth.

Commodities Highlights

Crude oil – Brent shot up 4.32% to US$123 per barrel, the highest level since 2008, while WTI climbed 3.22% to US$119. This is after US Secretary of State Antony Blinken said the US and its allies are considering an embargo of Russian oil in response to the Ukraine invasion. Also, the prospect of the return of Iranian crude was stymied following Russia and China’s demand of uninterrupted trade with Iran over the sanctions Russia is facing.

Gold – Fears of stagflation were rekindled due to the surging crude oil, prompting flows into gold. It climbed 1.39% to US$1,998/oz.

Malaysia Highlights

Malaysian ringgit – The local ringgit was weaker marginally against the strong dollar. It eased 0.02% to 4.179 and traded within the range of 4.176 and 4.1825.

KLSE – The FBM KLCI nose-dived 1.96% to 1,573 amidst regional weak performances due to the Ukraine-Russia tension. Detailed transactions revealed that local institutions were net sellers at RM200.4mil , offset by local retailers and foreign investors’ net buying at RM57.8mil and RM142.6mil, respectively.

Fixed Income – The local bond market saw tepid trading activities as most benchmarks were unchanged; 3-year, 5-year and 10-year were flat at 2.730%, 3.290%, 3.655%, but the 7-year -1.0bps to 3.540%.

Rates – The IRS yield curve shifted lower with the (3Y) at -1.5bps to 2.835%, (5Y) -3.0bps to 3.085%, (7Y) -3.0bps to 3.300%, and (10Y) -4.0bp to 3.510%. KLIBOR was unchanged at 1.970%.

Against major currencies – The ringgit has the upper hand against the EUR, GBP, JPY, CNY, SGD, THB, IDR, PHP, and VND, but was weaker against the AUD.

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.1700 and 4.1730 while our resistance is pinned at 4.1950 and 4.1980.

Source: AmInvest Research - 8 Mar 2022