KUALA LUMPUR (June 14): Ringgit edges lower for a second day, as geopolitical risks and simmering trade tensions erode demand for emerging-market assets. Investors are also on guard ahead of China data due Friday.

* USD/MYR advances 0.1% Friday and 0.2% this week to 4.1683

** Support 4.1500, 4.1413, 4.1252; resistance 4.2028, 4.2437, 4.2535

* FOMC review next week is a key risk for EM Asia FX, as the Fed may prove to be less dovish than markets expect, says Stephen Innes, managing partner at Vanguard Markets in Singapore

** Fed officials may want to avoid the appearance of being held hostage to market demands, and U.S. President Trump’s criticism of the central bank also complicates the situation

** High-yielders and high-beta FX will be hit if the Fed turns out to be less dovish than markets are pricing in

* Malaysia’s 10-year govt bond yield is steady at 3.74% and has climbed 2bps this week

* Auction of 5-year debt on Thursday drew strong demand, helped by a dovish rates outlook and an expected reduction in supply of short-tenor bonds this year, according to note from Maybank Kim Eng Securities

** Three-year bonds are offering better value than 5-year notes, with the 3/5-year spread of ~12bps not too far from the tightest end in the past two years

* BNM said Friday it’s seeking public feedback on exposure draft of framework for electronic trading platforms, especially for FX and money markets

* Malaysia’s 1Q FDI numbers point to “healthy” 2Q GDP growth, with the nation benefiting from a diversion of investment flows due to the U.S.-China trade war: Finance Minister Lim Guan Eng 

* Defense Ministry has submitted a report to anti-graft officials over RM300m purchase of 6 helicopters that it hasn’t received, according to a report from state news agency Bernama