• Crude Oil Pauses Bull Run
• MYR to fluctuate in the range of 4.1730 and 4.1950 against the USD

Global Highlights

Dollar index – The greenback dropped 1.10% to 97.968, retreating from its recent high as traders shifted their focus to the euro and the return of risk appetite into the market. The number of job openings in the US was 11.26mil in January 2022, down slightly from the record 11.4mil in the previous month (cons. 10.9mil). This signalled further tightness in the labour market when combined with the lower number of quits with the headline figure down to 4.3mil from 4.4mil. The next focus will be the US inflation report due to be released tonight.

US equities – Wall Street closed in the green across the board as the Dow Jones rose 2.00% to 33,286, S&P 500 climbed 2.57% to 4,278, and the tech heavyweight Nasdaq soared 3.59% to 13,256.

Euro – The euro extended its rebound, jumping 1.62% to 1.108 as investors flocked to the currency on the prospect of the European Union issuing a bond jointly to finance energy and defence spending amidst Eastern Europe tensions. All eyes will be on the ECB’s meeting which will take place later today with the market expecting no change in its key interest rate.

British pound – The pound climbed 0.60% to 1.318 after touching its lowest point since November 2020. The UK announced new sanctions against Russia, namely a ban on all Russian aircraft from flying over the country and seizing any planes in the UK, after committing to phase out oil purchases from Russia by 2022.

Japanese yen – The yen depreciated 0.14% to 115.83 after Bank of Japan governor Haruhiko Kuroda ruled out the chance of tightening its monetary policy to deal with any commodity-driven rise in inflation, stressing the need to wait for wage growth to pick up.

Chinese yuan – The yuan remained stable as it appreciated slightly by 0.02% to 6.318. China's annual inflation rate remained unchanged at 0.9% in February 2022, and in line with market forecasts, but the reading was still the lowest since September 2021. For this year, China has set a target of CPI at around 3%, which is the same as in 2021.

Korean won – The won strengthened 0.28% to 1,234, paring some losses made from the previous session. On the political front, a conservative former top prosecutor Yoon Suk Yeol has been elected South Korea’s new president in one of the most closely fought presidential elections in the country’s history.

Australian dollar – The Aussie dollar rose 0.73% to 0.732. On the data front, the Consumer Sentiment Index fell 4.2% m/m to 96.6 points in March 2022, the lowest since September 2020. It was weighed down by rising inflation, impact of floods and the occurring conflict in Ukraine.

Commodities Highlights

Crude oil – Brent dropped sharply by 13.16% to US$111 per barrel while WTI tumbled 12.13% to US$108 per barrel. Both marked the largest drop in nearly two years. This is after the UAE said it supported producing more oil in the market amidst geopolitical tensions.

Gold – The safe-haven metal declined 2.87% to US$1,991/oz.

Malaysia Highlights

Malaysian ringgit – The local currency further weakened as it eased 0.10% to 4.186 and traded with high of 4.1905 and low of 4.1815.

KLSE – The FBM KLCI snapped three straight days of losses as it rose 1.00% to 1,562. Detailed transactions showed that both local retailers and foreign investors were net buyers with RM83.1mil and RM140.6mil positions, while being offset by net selling from local institutions at RM223.7mil.

Fixed income – The local bond market saw lacklustre trading activities with unchanged benchmark yield level; the 3-year at 2.690%, 5-year at 3.300%, 7-year at 3.545% and 10-year at 3.675%.

Rates – The IRS yield curve shifted higher, especially at the neck. The (3Y) +0.5bps to 2.855%, (5Y) +1.5bps to 3.115%, and (10Y) +0.5bps to 3.540%, but the (7Y) was flat at 3.325%. KLIBOR was also flat at 1.970%.

Against major currencies – The ringgit strengthened vs. the JPY but weakened vs. the EUR, GBP, AUD, CNY, THB, IDR, PHP, VND and SGD

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 - 10 Mar 2022