MALAYSIA: Q4 Growth Above Forecasts, Aiding Asset Outperformance, BNM Next Week
Malaysian Q4 GDP was stronger than forecast, per the advance estimate. We rose 5.7%y/y, against a 5.4% forecast and 5.2% outcome in Q3. Resilient growth momentum has been evident throughout 2025. In terms of the breakdown, construction remained the standout at +11.9%y/y, but services and manufacturing all saw firmer y/y paces relative to Q3 (only mining slowed). Via BBG: "For the full year, the economy expanded 4.9%, according to the estimates, above the government’s forecast of 4% to 4.8% growth. "
- The market consensus for 2026 growth is a slowdown to 4.4% for the year. This would still be a resilient outcome for the region and is likely supporting local asset sentiment to a degree. The local equity index is through 1700, fresh highs back to 2019, while MYR remains an outperformer within the EM Asia FX space. USD/MYR was last under 4.0600, close to recent lows. In the past 3 months, MYR is up over 4% versus the USD.
- Next week we have CPI data Tuesday, along with trade figures, then the BNM decision on Thursday. No change is expected form the consensus (current policy rate is 2.75%).
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FOREX: USD - BBDXY Pushes Higher In Asia
The BBDXY has had a range today of 1204.77 - 1206.60 in the Asia-Pac session; it is currently trading around {BBDXY Index}. The USD broke below 1204 in reaction to the US data overnight, but it could not follow through and has recouped all of yesterday's losses and more. On the day I am a little confused, perhaps some patience is needed for a look back towards the 1208-110 area and above here the more important 1213-1216 area where sellers should remerge initially. Can this 1204 area provide some support again if not a move below here would target 1198-1200.
- EUR/USD - Asian range 1.1737-1.1752, Asia is currently trading {EURUSD Curncy}. The pair did not like it back up towards 1.1800 and very quickly rejected the move higher. On the day, first support is toward 1.1680-1710 initially, looking for the pair to consolidate before finding a base to attempt another move higher again.
- GBP/USD - Asian range 1.3407-1.3427, Asia is currently dealing around {GBPUSD Curncy}. The pair stalled back toward the 1.3450 level overnight. On the day GBP has initial support around the 1.3340-1.3370 area, if this does not hold look for a pullback to the more important 1.3260/90 area. I continue to watch for signs of GBP potentially topping out, which for the moment looks a lost cause.
- Cross asset : SPX -0.05%, Gold $4325, US 10-Year 4.16%, BBDXY 1205, Crude Oil $55.97
- Data/Events : Germany IFO, Spain Total Mortgage Lending, EZ CPI/Labour Costs YoY
Fig 1: EUR/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
NZD: NZD/USD - Unchanged, Consolidating Above 0.5750
The NZD/USD had a range today of 0.5771-0.5789 in the Asia-Pac session, going into the London open trading around {NZD Curncy}. The NZD traded sideways in a quiet session, consolidating its gains above 0.5700-0.5750. On the day, I suspect this sort of price action could continue as the pair settles into a range, support is back toward 0.5740-0.5760 and resistance is around 0.5810-30.
- MNI AU - Q3 Current Account Deficit, As % Of GDP, Continues Improvement: The Q3 headline current account deficit widened to -NZD8.365bn, from, -NZD1.297bn in Q2, but this is part of the typical seasonal norms. In seasonally adjusted terms we were slightly wider in Q3 at -NZD3.8bn. As a percent of GDP, the deficit was -3.5% in YTD terms, slightly wider than the -3.4% forecast but still an improvement on the Q2 outcome of -3.7%. The deficit trend as a share of GDP continues to improve, we were at -9.0% of GDP at the end of 2022.
- MNI AU - Further Weakness In Whole Milk Prices, Back To Mid 2024 Levels: Overnight the GDT whole milk auction price fell sharply, down 5.7% on the prior outcome to $3161/mt. This is the lowest level since mid 2024 for the twice monthly auction outcome. The Q3 official terms of trade print for NZ showed a 2.1%q/q fall. We were still up 7.2% in y/y terms. Export prices are moving off earlier 2025 highs, consistent with lower whole milk auction price outcomes.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5780(NZD344m), 0.5800(NZD502m), 0.5850(NZD328m). Upcoming Close Strikes : 0.5630(NZD594m Dec 19), 0.5690(NZD531m Dec 18 ), 0.5860(NZD471m Dec 18 ) - BBG
- The NZD/USD Average True Range for the last 10 Trading days: 42 Points
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
GOLD: Gold Reaches Overbought on RSI
- As equities perform better today, gold now turns its attention to US inflation data out Thursday whilst monitoring events in Venezuela as the US President orders a blockade of their sanctioned oil tankers.
- With a raft of data to come including CPI for November, the future path for interest rates is most important to gold. Weaker than expected non farm payrolls surprisingly didn't give gold a boost overnight given its correlations to interest rate expectations. Some market observers suggesting that near term data may be disregarded given its delay in release during the government shutdown.
- Gold is up +0.50% today to US$4.323.68 and is now just under 1% below the October high of US$4,356.
- Moves higher today take gold into overbought territory where it spent much of September and October when trade war fears were at their peak. However if the idea that gold may be impacted less than normal by US data holds true, then growing geo-political risks and equity volatility could mean that the risk is that gold could remain overbought for some time.
