KUALA LUMPUR (July 5): Ringgit is poised to halt two weeks of gains as volatile crude prices and renewed bids for the dollar damp demand for Malaysian assets.

* USD/MYR climbs 0.1% Friday and this week to 4.1353

** Support 4.1210, 4.1065, 4.0930; resistance 4.1545, 4.1840, 4.1935

** NOTE: Brent has fallen ~5% this week, after gaining 7% in the final two weeks of June

* Global backdrop of slower growth, subdued inflation and easier monetary policy are fostering a hunt for yield, and this will benefit regional FX such as INR and IDR, says Christopher Wong, senior FX strategist at Maybank in Singapore

** Given expectations for a dovish Fed, any upside surprise to U.S. jobs data on Friday and Chairman Jerome Powell’s testimony will keep USD supported vs EM Asia FX

* Malaysia’s 10-year govt bond yield is steady at 3.63%

* Govt sold 2034 bonds at avg 3.828% yield on Thursday with bid- to-cover of 3.44 times

** Auction attracted strong demand as the bond will be the new 15 year benchmark, according to note from Maybank Kim Eng Securities

** Sustained appetite for duration and ample liquidity also underpinned bids
* Exports +2.5% in May y/y vs est. +2.2%, according to official data Thursday

** Trade surplus at RM9.08b in May vs est. RM8.3b 

* Latest trade and manufacturing data suggest Malaysia’s 2Q GDP growth will surpass that of 1Q, according to note from ING

** BNM is likely to assess economic risks as fairly balanced between growth and inflation and keep interest rates on hold at July 9 review

* Foreign-exchange reserves for period ended June 28 due at 3pm local time; no forecast, holdings +0.3% to $102.6b in the first two weeks of June

* Riza Aziz, a producer of “The Wolf of Wall Street” movie and stepson of former PM Najib Razak, has pleaded not guilty to 5 counts of money-laundering linked to state fund 1MDB

* Govt is proposing a bill to lower minimum voting age to 18 from 21, Youth and Sports Minister Syed Saddiq Abdul Rahman said Thursday