Friday 29 Mar 2024
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SINGAPORE (March 21): Malaysian bonds will be one of the happiest fixed income sectors in Asia with the Fed providing cover for Asian central banks looking for a rate cutting window of their own.

Malaysia fits well into that category with soft inflation data that warrants a rate cut. And now with the FOMC helping to shift dollar expectations that will keep the ringgit strong and largely remove a key area of concern for Bank Negara.

The central bank said earlier this month it recognized there are downside risks in the economic and financial environment. Something which is reflected in the manufacturing PMI that has been in near free-fall since the 4Q of last year.

Ten-year MYR bonds have room to grind significantly lower before reaching an area which would suggest a rally is overextended. The 3.5% area for yields which was last seen in 2016 is a potential destination in the months ahead. 
 

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