Thursday 28 Mar 2024
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KUALA LUMPUR (Sept 18): Ringgit drops for the first time in three days as an increase in global trade tensions weighs on Asian currencies. Malaysia will publish inflation data Wednesday that’s forecast to show price gains slowed last month.

* USD/MYR climbs 0.2% to 4.1455 as trading resumes after a holiday on Monday; support 4.0900, 4.0848, 4.0413; resistance 4.1535, 4.1645, 4.2437

* CPI probably rose 0.5% in August y/y, slowest since February 2015: survey; inflation has eased since govt scrapped a goods and services tax in June

* Ringgit is still undervalued and the currency is one of many that’s come under pressure due to the China-U.S. trade war, PM Mahathir Mohamad said last week

* MYR’s implied volatility is one of the lowest among Asian majors and further weakness will be limited, UOB wrote in its quarterly outlook

** USD/MYR expected to trade at 4.15 in 4Q

** Markets are awaiting details on Malaysia’s fiscal position and new policies in the mid-term review of the 11th Malaysia Plan and Budget 2019

* 10-year govt bond yield opens unchanged at 4.11%

* Maybank Kim Eng Securities is neutral on Malaysian govt bonds, says Winson Phoon, head of fixed-income research in Singapore 

** Curve is unlikely to shift much lower in the absence of large foreign inflows or any dovish signal from BNM

* Govt is ready to revise 5% oil royalties paid to states, according to a report in The Star on Monday, citing PM Mahathir

* Financier Jho Low, who’s accused of looting billions from state investment fund 1MDB, has proclaimed his innocence on his website

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