• Ringgit Reaches 4.55 Level

Global Highlights

Dollar Index – The greenback fell slightly by 0.02% to 109.74. On the data front, report showed that the NAHB housing market index fell to 46 in September from 49 in August which is lower than market forecast of 47. It marks the ninth straight month of declining, and the lowest level so far since May 2020. Higher interest rates, prolonged supply chain disruptions and elevated home prices have caused new home purchase out of most households’ reach.

US equities & sovereign bonds – Wall Street recovered some losses as the Dow Jones rose 0.64% to 31,020, the S&P500 climbed 0.69% to 3,900 while the Nasdaq surged 0.76% to 11,535, supported by some dip buyers.

The UST10Y benchmark yield jumped 4.1bps to 3.491%, a level last seen in 2011, while the UST2Y added 6.9bps to 3.936%, widening the inverted differential between the two to 44.5bps.

Euro – The euro rose 0.08% to 1.002 but remained around the parity level. The ECB vice president Guindos stated that the magnitude of rate hike will depend on incoming data amidst unprecedented energy crisis, which further bolstered the notion of abandoning pre-set rate hike path by the central bank. We maintain our view where the key interest rates will be raised further by at least another 75bps for the remainder of the year 2022.

British pound – The pound rose 0.10% to 1.143 after hitting its lowest level since 1985 in the previous session. The market was closed on Monday as a sign of respect for the Queen’s funeral.

Japanese yen – The yen weakened 0.20% to 143.21 ahead of the BoJ meeting which will be held this Thursday. The market was closed celebrating and honouring the elderly citizens.

Chinese yuan – The yuan continued to be bearish as it weakened 0.26% to 7.005, taking cue from the diverging monetary policy stance between the PBoC and the Fed. In its latest move on Monday, the PBoC lowered the interest rate on 14-days reverse repos and ramping up cash injections to revive credit demands and bolster the shaky economy.

Korean won – The won depreciated 0.30% to 1,394 and remained near the 13- year low level and towards the 1,400 level. The BoK has requested foreign exchange traders to provide hourly reports on the demand for dollars as authorities intensified monitoring of the Korean won to prevent it from sliding further.

Australian dollar – The Australian dollar rose 0.16% to 0.673, around its twoyear low. One of the RBA’s officials Kearns said that the increasing interest rates in Australia will weigh on property prices and curtail borrowings which are estimated to cut maximum loan sizes by about 20%.

Commodities Highlights

Crude oil – Oil prices traded higher as Brent climbed 0.71% to US$92 per barrel while WTI gained 0.73% to US$85 per barrel. The worries of tight supplies overwhelmed demand fear due to more expensive US dollars and elevated global interest rates.

Gold – The precious metal inched slightly higher by 0.05% to US$1,675, outweighed by the prospect of rising borrowing costs.

Malaysia Highlights

Malaysian ringgit – The ringgit extended its weakening trend as it depreciated by 0.34% to 4.551 and traded within the range of 4.5507 and 4.5325.

KLSE – The FBM KLCI dropped 1.08% to 1,452 with negative sectors were led by healthcare, technology, and energy. Detailed transactions showed that the local retailers were the net buyers with RM69.5mil, offset by the local institutions and foreign investors with RM52.2mil and RM17.4mil flow, respectively.

Fixed income – The local bond market another weaker bids day as the 3-year was +3.0bps to 3.440%, 5-year +4.0bps to 3.900%, 7-year +3.5bps to 4.065% and 10-year +2.5bps to 4.176%.

Rates – The IRS yield for the (3Y) was +3.5bps to 3.755%, (5Y) +7.5bps to 3.910%, (7Y) +10.3bps to 4.023%, and (10Y) +3.5bps to 4.150%.

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

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.550 and 4.580 while our resistance is pinned at 4.600 and 4.650

Source: AmInvest Research - 20 Sept 2022