Ringgit slips as oil slump and trade tensions weigh

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KUALA LUMPUR (Jan 29): Ringgit edges lower as an overnight slump in crude prices and renewed U.S.-China tensions damp appetite for risk assets.

* USD/MYR climbed 0.1% to 4.1140

** Support 4.0935, 4.0900, 4.0766; resistance 4.1549, 4.2020, 4.2437

** NOTE: U.S. prosecutors filed criminal charges against China’s Huawei Technologies for allegedly stealing trade secrets, just as the two nations are preparing to resume trade talks

* Asian FX will continue to focus on U.S.-China trade talks this week, while the soft overnight performance of U.S. markets and weaker earnings set a negative tone, says Mitul Kotecha, a senior strategist at TD Securities in Singapore

** Still, firm CNY fixings are supporting Asia’s trade-orientated FX such as KRW, TWD and SGD, while high-yielders IDR and INR may underperform in the short term 

* In the absence of an intensification in the U.S.-China trade war, BNM will probably avoid easing policy and remain on hold this year, according to Bloomberg Intelligence Economic Research

** The central bank’s outlook for stable growth and contained underlying inflation favors a neutral stance 

* 10-year yield was steady at 4.08% Monday

* Govt to auction RM4b of 2023 Islamic bonds Wednesday

* Trade surplus probably narrowed to RM7.2b in December from RM7.55b in November: Bloomberg survey ahead of data due Wednesday

** Exports likely rose 1.3% in December vs +1.6% November: survey

* Malaysia plans to put $5.5b of real estate on sale, in an effort to close the gap between property oversupply and lack of affordable homes, Housing and Local Government Minister Zuraida Kamaruddin said Monday