How to create a sequence to append current date's year and month

Try this:

create sequence mysequence;

select  to_char(current_date,'YYYYMM') || nextval('mysequence');

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https://dbfiddle.uk/?rdbms=postgres_9.6&fiddle=1d1e95c2bfc87a2e794622598c66400f

If you want the sequence to have a fixed format padded with 0: LPAD:
https://www.postgresql.org/docs/9.1/functions-string.html

Thank you! This certainly helps.
  Also, is there a way to reset the 'mysequence' value every day?

As long as you can ensure it runs EXACTLY at midnight, down to the second, there is an alter sequence:
ALTER SEQUENCE serial RESTART WITH 105;

https://www.postgresql.org/docs/11/sql-altersequence.html


Question I have is what is the actual business need you are trying to solve by resetting the sequence?  I'm not really seeing a good reason to reset the sequence.

Actually, i wouldn't need to reset it.
The requirement was to create a primary key sequence, which shall have the format of YYYYMM, followed by a 5 digit random number.
So, this 5 digit number shouldn't repeat within that day, but can repeat the following day, as the YYYYMM number changes.

You have added great value! Thanks for answering my additional questions as well.
Have a great day!

Happy to help!