SINGAPORE (Nov 19): USD/MYR attempts to consolidate below 4.20 level after rising for two consecutive weeks.

* USD/MYR -0.1% to 4.1870 with initial resistance at 4.1975, Nov. 15 high
 
* Overseas funds were net sellers of $7.2m in local equities on Nov. 15 taking total monthly net outflows to $109.1m 

* “Amid concerns on fiscal balance and C/A balance, portfolio flows have not been supportive for the MYR," says Divya Devesh, head of Asian and South-East Asia FX research at Standard Chartered Bank in Singapore
 
** While FX valuation remains attractive and foreign investors’ positioning is still light, the MYR is unlikely to rally in the absence of a catalyst

** Target USD/MYR at 4.20 by year-end 

* Malaysia 3Q GDP rose 4.4% y/y vs est. 4.6% while 3Q BoP current account balance shrank to $3.8b vs est. $9.3b, data on Friday showed 

* OCBC Banks forecasts the full year growth at 4.6% y/y, according to a note on Nov. 16 

** Main driver of the slowdown will be slowing private consumption growth while the tax holiday comes to an end 

** Two out of three months in 3Q was tax holiday as GST was abolished and SST was only introduced from 1st September 2018

** Consumers had front-loaded expenditure in the previous quarter 

** Exports will probably see some recovery although not significantly whilst investment growth should still continue to exhibit some strength 

* 10-year govt bond yield fell 1bp to 4.15% Friday