KUALA LUMPUR (Oct 4): Ringgit falls to a three-week low as a jump in Treasury yields and hawkish Federal Reserve rhetoric weigh on regional currencies.
* USD/MYR advances 0.2% to 4.1475; reached 4.1485, highest since Sept. 12
** Support 4.1059, 4.0900, 4.0413; resistance 4.1535, 4.1645, 4.2437
** NOTE: 10-year UST yield surged 12bps Wednesday after Chairman Jerome Powell said the Federal Reserve may go past a neutral level of rates while tightening. Strong U.S. economic data also drove the move
* MYR has historically reacted to U.S. yields, just like Indonesia where foreigners make up a large percentage of bondholders, says Maximillian Lin, an emerging-markets Asia strategist at NatWest Markets in Singapore
** Malaysian authorities appear to have been managing USD/MYR volatility around the 4.15 mark, and are likely to continue to do so
** If USD/MYR breaches 4.15, 4.20 would be the next level to watch
* 10-year govt bond yield steady at 4.08%
** READ: Investors Turn Glum on EM Asia Bonds as Dollar, Oil Bite Hard
* The Malaysian Islamic unit of HSBC Holdings Plc has sold RM500m of Shariah-compliant bonds that comply with the United Nations’s sustainable development goals
* Prosecutors lay 17 charges against Rosmah Mansor, wife of ex- PM Najib Razak, three weeks after he faced new allegations linked to troubled state fund 1MDB