• Dollar gained. China signals it could relax some of its Covid restrictions.

Global Highlights

Dollar Index – The dollar continued to gain by 0.13% to 106.822. House prices in the US showed a moderate growth in September, increasing by 10.4% y/y in Sep’22 (Aug’22: 13.1% y/y).

US equities & sovereign bonds – Wall Street was mixed as the Dow Jones up 0.01% to 33,852, S&P500 down 0.16% to 3,958 and the Nasdaq down 0.59% to 10,984.  

The benchmark UST10Y yield up 6.290bps to 3.744% and the UST2Y up 3.510bps to 4.473%, narrowing the inverted differential between the two to - 72.91bps.

Euro – The euro dropped by 0.10% to 1.033 due to the stronger dollar. On a macro front, Euro Area economic sentiment improved from 92.7 in Oct’22 to 93.7 in Nov’22 supported by service providers and consumers. Still, sentiment is at the lowest level in two years.

British pound – The pound dropped by 0.06% to 1.195 due to the stronger dollar. BOE policymaker Mann earlier said that it is important to keep inflation expectation in the UK under control before making any changes on monetary policy. She also said that the BOE could be a little more aggressive in the near term, so inflation expectation is anchored at the desired level.

Japanese yen – The yen gained by 0.23% to 138.630. Japan’s retail sales increased by 4.3% y/y in Oct’22 due to the reopening of the international border that support domestic spending. Despite the gain, retail sales grew slower against Sep’22 by 4.8% y/y, as high inflation in Japan is already affecting household spending.

Chinese yuan – The yuan gained by 0.66% to 7.159, as policy makers in China is signalling for a less stringent zero-Covid policy. China also announced that it would increase vaccination rates among its senior citizens, which is crucial for the economy reopening. Estimates showed that only half of those aged 80 years old and above were fully vaccinated.

Korean won – The won rose by 1.02% to 1,327.06. The government has taken the unprecedented step of enforcing strict strike-busting laws to end the six day truck drivers' that is harming the economy. The order was approved by the Cabinet, targeting around 2,500 cement truck drivers that took part in the protest.

Australian dollar – The Aussie dollar gained by 0.57% to 0.669.

Commodities Highlights

Crude oil – Oil prices were mixed. The WTI rebounded 1.24% to US$78.20 as market weighed in that China would relax some of its Covid-19 restrictions. Brent however was down by 0.19% to US$83.02 per barrel.

Gold – Gold gained by 0.49% to US$1,750/oz.

Malaysia Highlights

Malaysian ringgit – The ringgit was trading between 4.4797 and 4.5113 and lost by 0.66% to 4.510 by end of the day.  

Today’s focus will be on the PPI number for October, where we expect the producer inflation to slowdown from 4.9% y/y in Sep’22 to around 4.0% y/y in Nov’22, continuing its downward trend after peaking at 11.6% y/y in Mar’22.  

We expect the MYR to trade between our support level of 4.440 and 4.450 while our resistance is pinned at 4.520 and 4.530.

KLSE – The KLCI closed lower by 0.64% to 1,477. Detailed transaction showed that local institution and foreign investors were net seller of RM10.7mn and RM10.7mn. Local retailers were net buyer of RM21.4mn.

Rates – The IRS yield for the 3-year remained at 3.875%, 5-year up 1.00bps to 3.965%, 7-year down -0.50bps to 4.065%, and 10-year remained at 4.170%.

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

Ringgit Outlook for the Day

We expect the MYR to trade between our support level of 4.440 and 4.450 while our resistance is pinned at 4.520 and 4.530.

Source: AmInvest Research - 30 Nov 2022