Global Highlights

Dollar Index – The Dollar Index was up 0.17% to 98.789. On the macro front, the goods trade deficit narrowed marginally from US$107.6 billion in January 2022 to US$106.6 billion in February 2022. On a similar note, wholesale inventories increased 2.1% m/m, higher relative to the preceding month’s 1.1% m/m. This could be due to businesses building up inventories on expectation of ongoing supply bottlenecks.

US equities – US stocks ended higher with the Dow Jones gaining 0.27% to 34,956, S&P 500 up 0.71% to 4,576, and the Nasdaq rising 1.31% to 14,355. On US Treasuries, the spread between the 10Y and 2Y was around 0.13%, continuing its narrowing trend.

Euro – The euro was up 0.02% to 1.099. The currency continued to be influenced by the situation in Ukraine. Russia currently is showing zero interest in halting its ceasefire in Ukraine, and the EU and G7 leaders rejected Russia’s request to pay its gas in Russian rubles.

British pound – The pound slid 0.71% to 1.309. In his latest speech, the Bank of England governor Andrew Bailey said that the shock on household income in the UK will be larger than what happened back in the 1970s. This was due to the situation in Ukraine, which pushed commodity prices higher, and affecting UK households through higher energy prices and electricity tariffs.

Japanese yen – The yen gained 0.25% to 122.050, but still relatively weaker compared to last week’s trend. While most central banks are tightening their monetary policy, the Bank of Japan (BoJ) had to intervene to keep its 10Y Japanese government bond (JGB) capped at 0.25%. On the fiscal front, Prime Minister Fumio Kishida said that the government will introduce an additional economic stimulus package by April to mitigate the impact of higher oil and food prices.

Chinese yuan – The yuan shed 0.03% to 6.366. The Chinese authorities maintained its stance on the zero-tolerance policy in keeping confirmed Covid cases low. Shanghai, one of China’s major commercial hubs, was put under a strict lockdown and this will affect domestic and external economies.

Korean won – The won lost 0.70% to 1227.440. On the macro front, the Composite Consumer Sentiment Index in South Korea rose by 0.1 to 103.2 in March 2022. The reading suggested that sentiment slightly improved, but the high inflation expectation is dampening the confidence in the country.

Australian dollar – The Aussie dollar weakened 0.35% to 0.749. The federal government is expected to release its budget plan soon, before the election which must be held before May 2022. The focus will be aiding households due to rising living costs due to the high global commodity prices.

Commodities Highlights

Crude oil – Brent was down 6.77% to US$112.48 per barrel and WTI also tumbled 6.97% to US$105.96 per barrel. The recent decline was highly influenced by the lockdown in China which dampened the demand for this commodity.

Gold – Gold was down 1.81% to US$1,922.80 per oz.

Malaysia Highlights

Malaysian ringgit – The ringgit weakened 0.17% to 4.217.

KLSE – The FBM KLCI closed 0.27% higher at 1,603. Detailed transactions showed that local retailers and foreign investors were net buyers with RM17.4mil and RM120.8mil respectively, while local institutions were net sellers with RM138.2mil.

Fixed Income – The yield for the 3-year was higher by 10.0bps to 2.860%, 5- year by 16.0bps to 3.595%, the 7-year by 17.0bps to 3.900%, and the 10- year by 11.5bps to 3.975%.

Rates – The IRS yields for the (3Y) was up by 12.0bps to 3.240%, (5Y) by 19.0bps to 3.605%, (7Y) by 6.0bps to 3.640%, and (10Y) up 4.0bps to 3.850%. KLIBOR remained at 1.970%.

Against major currencies – The ringgit weakened against the GBP, AUD, CNY, IDR, PHP and VND, while gaining against the EUR, JPY, SGD and THB.

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.2000 and 4.2030 while our resistance is pinned at 4.2500 and 4.2530

Source: AmInvest Research - 29 Mar 2022