• The IMF downgraded US outlook

Global Highlights

Dollar Index – The dollar down 0.24% to 103.939. The International Monetary Fund (IMF) is expecting the US economy to slow to 2.9% in 2022 and 1.7% in 2023 and will narrowly avoid a recession.

US equities & sovereign bonds – Wall Street was red where Dow Jones fell 0.20% to 31,438, S&P 500 dropped 0.30% to 3,900 and Nasdaq down 0.72% to 11,525. The UST10Y benchmark yield was up 7.0bps to 3.200%, and the UST2Y was at 3.121%.

Euro – The euro gained 0.29% to 1.058. European natural gas prices increased due to Russia’s drastic supply cuts, slowing the pace of refilling storage sites. Full storage is required to avoid more price pressure on consumers especially winter season draws closer.

British pound – The pound weakened by 0.02 % to 1.227. Businesses are stockpiling raw materials and components six months ahead in an attempt to overcome supply shortages and shelter themselves against possible higher future prices.

Japanese yen – The yen lost by 0.17% to 135.460 with the BoJ standing its ground on their ultra-low interest rate policy in hopes of driving up demand through sustained wage rises.

Chinese yuan – The yuan declined 0.03% to 6.692. The People's Bank of China injected 100 bil yuan (US$14.95 bil) in seven-day reverse repos, the largest daily injection of the liquidity tool through open market operations into the banking system since 31 March to relieve pressure from rising cash demand toward the end of the first half of the year.

Korean won – The won up 0.93% to 1286.39. Indicators including sentiment and outlook, are looking increasingly gloomy in South Korea due to financial market volatility, high inflation, higher lending rates, and depreciating currency.

Australian dollar – The Australian dollar depreciated 0.27% to 0.693. The Australian government plans to target large manufacturers to keep emissions below an agreed limit as Australia reported carbon emissions rose nearly by 1% due to Covid-19 restriction lifts in 2021.

Commodities Highlights

Crude oil – Oil prices gained where Brent up 1.74% to US$115.09 per barrel and WTI gained 1.81% to US$109.57 per barrel.

Gold – The gold price declined 0.22% to US$1,823/oz.

Malaysia Highlights

Malaysian ringgit – The ringgit down 0.04% to 4.405. S&P Global Ratings revised upward its rating outlook Malaysia’s sovereign credit ratings from negative to stable due to growth momentum and strong external position for the next two years.

KLSE – The FBM KLCI gained by 0.10% to 1,438. Detailed transactions showed that local institutions and foreign investors were net sellers of RM12.0 mil and RM32.6 mil respectively. Local retailers were net buyer off RM44.6 mil.

Rates – The IRS yield for (3Y) was up 4.5bps to 3.660%, (5Y) up 6.0bps to 3.850%, (7Y) up 8.0bps to 3.970%, and (10Y) 5.0bps to at 4.010%

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

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.4000 and 4.4100 while our resistance is pinned at 4.4150 and 4.4200.

Source: AmInvest Research - 28 Jun 2022