• US bans Russian oil imports

• MYR to fluctuate in the range of 4.1730 and 4.1950 against the USD

Global Highlights

Dollar index – The greenback took a breather from its recent rally as it fell 0.21% to 99.088, but remained above the 99 level, amidst no signs of easing geopolitical tension. Also, President Joe Biden last night said that the US planned to ban Russian oil imports as a response to Russia’s aggression.

US equities – Wall Street extended its losses as the Dow Jones fell 0.56% to 32,633, the S&P 500 lost 0.72% to 4,171, and the Nasdaq declined 0.28% to 12,796. The benchmark UST 10-year yield climbed 7.2bps to 1.846%, prompted by inflation woes.

Euro – The euro rose 0.41% to 1.090 after five sessions of declines, partly boosted by expectations that the European Union will jointly issue bonds at a massive scale to strengthen its energy and defence spending. According to the 3rd estimates report, GDP in the Euro Area expanded 4.6% y/y in the fourth quarter of 2021, in line with previous estimates, and higher than 4% in the previous period.

British pound – The pound edged lower by 0.02% to 1.310. As part of its punishment on Russia, Britain will phase out imports of Russian oil and oil products by the end of 2022 and consider banning its natural gas.

Japanese yen – The yen weakened again by 0.30% to 115.67. On the data front, average cash earnings in Japan rose 0.9% y/y in January 2022, rebounding from 0.4% in the previous month, due to the change in the way inflation was calculated in the survey.

Chinese yuan – The yuan firmed slightly by 0.03% to 6.319 as it remained stable amidst geopolitical tension.

Korean won – The won depreciated 0.88% to 1,237.8, its lowest level since May 2020.

Australian dollar – The Aussie dollar shed 0.66% to 0.727, pausing from its recent climb. The NAB Business Confidence Index in Australia jumped to 13 in February 2022 from 4 in the previous month. This was the highest reading in four months amid a decline in Omicron cases.

Commodities Highlights

Crude oil – Oil was traded higher following the US announcement to ban Russian oil imports, while the UK will phase them out by the end of the year, which is expected to disrupt the global energy market further. Brent surged 4.92% to US$129 per barrel while WTI climbed 3.60% to US$123 per barrel.

Gold – Safe-haven demand spurred gold’s rally as it soared 2.63% to US$2,051/oz.

Malaysia Highlights

Malaysian ringgit – The local ringgit extended its weak position as it weakened 0.08% to 4.182, and traded within the range of 4.1838 and 4.1775.

KLSE – The FBM KLCI closed in the red again, slipping 1.63% to 1,547, as local retailers and foreign investors remained net buyers with RM121.7mil and RM76.4mil, respectively, while being offset by local institutions’ net selling of RM198.1mil.

Fixed Income – The local bond market saw weak movements as most benchmark yields were sent upwards; the 5-year +1.0bps to 3.300%, 7-year +0.5bps to 3.545%, and 10-year +2.0bps to 3.675%, but the 3-year was - 4.0bps to 2.690%.

Rates – The IRS yield curve shifted higher with the (3Y) at +1.5bps to 2.850%, (5Y) +1.5bps to 3.100%, (7Y) +2.5bps to 3.325%, and (10Y) +2.5bps to 3.535%. KLIBOR was unchanged at 1.970%.

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

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 - 9 Mar 2022