KUALA LUMPUR (Nov 2): Ringgit gains for a second day after the dollar slumped on disappointing U.S. manufacturing data. The government will unveil the 2019 federal budget.

* USD/MYR declines 0.1% to 4.1720, taking its weekly drop to 0.1%

** Support 4.1426, 4.1227, 4.0900; resistance 4.1885, 4.1990, 4.2437

** NOTE: Bloomberg Dollar Spot Index climbs 0.1% after sliding 0.8% Thursday

* Dollar’s overnight drop will probably cap any rise in USD/MYR above 4.1850 for next 1-2 weeks, says Peter Chia, FX strategist at United Overseas Bank in Singapore

** Given that USD/MYR is one of the most stable Asian currency pairs, a pullback is probably limited to 4.1500 in the immediate term

* 10-year govt bond yield dropped 1bp to 4.10% Thursday

* Finance Minister Lim Guan Eng will deliver the budget speech in parliament at 4pm local time

* Govt will unveil a new tax in the budget but the levy won’t burden the lower-income group, according to a Bernama report Thursday citing Deputy Finance Minister Amiruddin Hamzah

* Despite the improved risk appetite, AmBank remains cautious on the ringgit with the focus on the upcoming Malaysian budget and U.S. jobs data, according to daily note

** Expects Malaysia to record fiscal deficit of 2.8%-3.3% of GDP this year and 3.7%-4.9% in 2019 although that’s likely to be one-off spike

* Daiwa upgrades its call on Malaysian stocks to neutral due the economy’s current-account surplus, improving fiscal position and undervalued MYR, according to note

* Former senior Goldman Sachs banker Tim Leissner pleaded guilty to U.S. bribery and money laundering charges in relation to a scandal involving Malaysian state fund 1MDB