Ringgit climbs on subdued dollar, equity gains

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KUALA LUMPUR (March 18): Ringgit strengthens for the first time in four days as the dollar falls and gains in Asian equities bolster sentiment. An OPEC meeting to discuss output curbs may provide further cues.

* USD/MYR declines 0.2% to 4.0822

** Support 4.0550, 4.0435, 4.0083; resistance 4.0965, 4.1045, 4.1362

** NOTE: OPEC and its allies continue their meeting in Azerbaijan, after Saudi Energy Minister Khalid Al-Falih said on Sunday that producers have much to do to balance global oil markets

* Malaysia’s 10-year govt bond yield steady at 3.86%

* Sentiment in Malaysian bonds remains driven by BNM’s recent policy statement, CIMB fixed-income strategist Nik Mukharriz wrote in note Monday

** Next target for 10-year yield may be 3.8% although this is dependent on the 5-year testing 3.5%

* CPI likely contracted 0.4% y-o-y in February, a second month of declines, according to a Bloomberg survey ahead of data due Friday

* Inflation will probably only pick up in 2H and even then, it’s likely to remain below 2%, says Trinh Nguyen, senior economist for emerging Asia at Natixis Asia Ltd in Hong Kong

** This will give BNM room to cut rates and probably in 2Q; even with the weaker MYR, central bank doesn’t need to worry about the pass-through effect of inflation due to the limited price pressures

* Securities Commission has asked Goldman Sachs to defend its role in transactions involving state fund 1MDB at the risk of administrative sanctions

** READ: Malaysia Court Sets June for Next Hearing in Goldman’s 1MDB Case