• Dollar Touches 2-year High of 102
• MYR to fluctuate between 4.2851 and 4.400 against USD

Global Highlights

Dollar Index – The greenback climbed 0.54% to 102.30, a level not seen since March 2020, boosted by safe-haven appeal stimulated by fears of slowing global growth and a tighter Fed’s policy path. New orders for US manufactured durable goods increased 0.8% m/m in March 2022, below the market expectation of 1.0% growth. Also, orders for non-defence capital goods excluding aircraft, a closely watched proxy for business spending plans, increased by 1.0%. Meanwhile, the new home sales reading contracted 8.6% m/m, recording the third straight month of decline.

US equities – US major indices resumed their decline as the Dow Jones fell 2.38% to 33,240, S&P 500 dropped 2.81% to 4,175 while the tech heavyweight Nasdaq tumbled 3.95% to 12,491. The UST 10-year benchmark dipped 3.9bps to 2.721% while the UST 2-year was down 4.1 to 2.63%, narrowing the yield spread between 10/2 yields to 9.48bps

Euro – The euro shed 0.70% to a fresh two-year low of 1.064 despite the positive sentiment sparked by French President Emmanuel Macron’s confirmation of his second term during the recent national election.

British pound – The pound tumbled 1.31% to 1.257, marking the fourth straight session of free-falling amidst a hawkish Fed, in contrast with the less hawkish BoE.

Japanese yen – The yen strengthened 0.71% to 127.23. Japan’s unemployment rate dropped to a 1-year low of 2.6% in March 2022, lower than the 2.7% in February (cons.: 2.7%).

Chinese yuan – The yuan rose slightly by 0.04% to 6.557 as the local economy prospect deteriorated due to the looming lockdown, induced by the expansion of mass testing in Beijing. An imminent slowing growth may prompt further policy easing, which is conflicting with the Fed’s hawkish stand.

Korean won – The won depreciated 0.04% to 1,250.58. According to a report, South Korea’s gross domestic product (GDP) expanded 3.10% y/y in the first quarter of 2022, slower than the previous quarter of 4.2%, but higher than the market expectation of 2.8%. Growth was dampened by the decline in private consumption and investment.

Australian dollar – The Aussie dollar was on the downside as well as it fell again by 0.77% to 0.712, erasing gains made since 24 February.

Commodities Highlights

Crude oil – The global oil market settled higher as Russia threatened to cut oil supplies to Poland in a retaliation against Europe amidst the Ukraine-Russia war. The move came as Europe declined to fulfil Russia President Vladimir Putin’s demand to pay for oil using the ruble. Brent jumped 2.61% to US$105 per barrel and WTI surged 3.21% to US$101 per barrel.

Gold – Gold also was on the upside as it added 0.40% to US$1,905.51/oz.

Malaysia Highlights

Malaysia ringgit – The ringgit strengthened slightly by 0.03% to 4.356 and traded within the range of 4.3562 and 4.3455. On the pandemic development, Covid-19 new daily cases have been trending down as it reached the lowest level at 2,478 cases in three months.

KLSE – The local bourse gained 0.42% to 1,597 amidst mixed regional and global stock markets’ performance. Detailed transactions showed that both local retailers and foreign investors were net buyers with RM7.3mil and RM71.6mil, respectively, but offset by local institutions’ net selling flow of RM78.9mil.

Fixed income – The local bond market continued to see sharp selling as benchmark yields shot up. The 3-year added 4.5bps to 3.620%, 5-year +6.0bps to 3.945%, 7-year +11.5bps to 4.410%, and 10-year +1.0bps to 4.340%.

Rates – The IRS yield curve steepened when the (3Y) fell 1.0bps to 3.425%, (5Y) -4.0bps to 3.855%, but the (7Y) added 0.9bps to 4.064%, while the (10Y) remained at 4.270%. KLIBOR was at 1.980%.

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

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.2698 and 4.2851 while our resistance is pinned at 4.4000 and 4.4200

Source: AmInvest Research - 27 Apr 2022