Ringgit Weakest Since July Following Federal Reserve.
- USD/MYR is up at 4.5063 in Kuala Lumpur this morning; versus yesterday's close of 4.4700.
- The move has seen the Ringgit break through the 200-day EMA of 4.4924, with the next technical level 4.60%
- Bloomberg Asia dollar spot index is down by -0.18% and the Bloomberg Dollar spot index is +0.04% higher.
- USD/MYR one-month implied volatility is down at 5.5375 from yesterdays close of 5.60%
- Malaysia's 10-year bond yield is at 3.815%
- Malaysia 5 yr USD CDS at 44bps (yesterday’s close 43bp, 5-year low 38bp in 2020).
Headlines
- Malaysia’s exports rose 4.1% from a year earlier in November, the Ministry of International Trade and Industry said in an emailed statement. (source: BBG).
- US-Malaysia economic ties to stay strong despite US manufacturing push, says Ambassador (source: The Star).
- Maybank Investment Bank Research expects the cargo volume growth for ports in Malaysia to sustain going into 2025, supported by strong foreign direct investment, domestic direct investment and rising intra-Asia trade. (source: The Star)
Data This Week 20 DEC
- CPI YoY (forecast +2.1% vs +1.9% prior)
- Foreign Reserves (US$118.3bn prior)
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EQUITIES: Investors Dump China Focused ETFs Following US election
ETFs focused on investing in Chinese stocks faced significant outflows last week, with the iShares China Large-Cap ETF (FXI) losing $984m and the KraneShares CSI China Internet ETF (KWEB) seeing $710m in withdrawals. Concerns over China's growth outlook, deflationary pressures, and potential US tariffs under a Trump administration weighed on sentiment, leading to a 16% drop in the MSCI China Index since October, as per BBG. There was a bounce in Chinese and Hong Kong markets rebounded Monday, supported by financial stocks and regulatory measures to boost corporate valuations.
- It should also be noted that flows in the first half of October were records highs, following stimulus announcements from the Chinese government.
Chart. China ETF Flows (Source BBG)
JGBS: Futures Uptick Overnight, Light Local Calendar
In post-Tokyo trade, JGB futures are stronger, +3 compared to settlement levels, after US tsys finished with modest gains, well off session cheaps.
- Muted reaction to data: NAHB housing market index surprised higher at 46 (cons 42) in November after 43, for its highest since April. The 3pt increase was driven by expectations for future sales (+7) which at 64 are now its highest since Apr 2022.
- Market focus remains on Trump's cabinet picks, with the Treasury Secretary position still up for grabs. Latest reports suggest that Trump's shortlist is growing, and he is to hold interviews this week with the leading candidates, including (but not limited to) Scott Bessent, Howard Lutnick, Kevin Warsh and Marc Rowan.
- The NASDAQ and S&P 500 rallied 0.6% and 0.4%, respectively, supported by a pop in Tesla amid talk the Trump administration is looking to ease regulations on autonomous vehicles.
- Gold rallied back above the $US2600 an ounce mark, oil retook $US73 a barrel, and iron ore is within sight of the $US100 a tonne level.
- Today, the local calendar is empty apart from 1-year supply.
JGB TECHS: (Z4) New Lows
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 146.53 - High Aug 6
- PRICE: 142.82 @ 16:36 GMT Nov 18
- SUP 1: 142.71 - Low Nov 15
- SUP 2: 142.23 - Low Jul 02
- SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing
Prices fell further again Friday, extending the recent pullback. Recent weakness has culminated in a break of 143.57, marking both the Jul 17 high on the continuation contract as well as the Oct 22 low. For now, the 50-dma tops out at 144.19, and marks first resistance. Any recovery would open 146.53, the Aug 6 high (cont) and a bull trigger.
