MYR volatility climbs as factory data in focus: Inside Malaysia

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KUALA LUMPUR (Dec 11): A gauge of expected swings in the ringgit rises for the first time in four days, as investors await factory output data and the outcome of the Federal Reserve’s meeting this week.

* 1-month implied volatility for USD/MYR jumps 24bps to 5.86%

* USD/MYR falls 0.1% to 4.0817

** Support 4.0360, 4.0000, 3.9300; resistance 4.1990, 4.2440, 4.2535

* Ringgit is likely to continue trading within a range of 4.05-4.10/USD this week, with the FOMC decision expected to provide clues on the outlook for Fed policy, says Khoon Goh, head of Asia research at ANZ

** Markets will also be closely watching factory output data due Tuesday for signs of whether the strong domestic growth momentum is being sustained into 4Q

* NOTE: October industrial production likely +3.9% y/y vs +4.7% in September: Bloomberg survey

* DBS expects Malaysia to report a 3.4% rise in output Tuesday, due to high base effect and a moderation in industrial activity, economist Radhika Rao writes in note

** Recent global semiconductor billings and shipments growth have eased off, suggesting a cooling-off in global electronics demand

* MYR’s strength is likely to extend into 2018 as growth stays elevated at 5% and rising crude prices provide support, United Overseas Bank analysts led by Suan Teck Kin write in report

* PM Najib said Saturday he has a time limit to call the general election and that he’s expected to do so before June* 

Foreign ownership of Malaysian sovereign and corporate debt increased 3.4% to a 9-month high of 204b ringgit in November: central bank data

* Foreign investors bought net 337.7m ringgit of Malaysian stocks last week, a third week of inflows: MIDF Amanah Investment