Ringgit view

 KUALA LUMPUR (Nov 1): Ringgit trades near a one-week high after energy prices climbed to the strongest in over two years, burnishing sentiment towards Malaysian assets.

* USD/MYR little changed at 4.2335; touched 4.2280 Tuesday, lowest since Oct 23

** Support 4.2095, 4.1825, 4.1733; resistance 4.2440, 4.2535, 4.2594

** Brent crude falls 0.4% after reaching US$61.41 Tuesday, highest since July 2015

* MYR is the number 2 trade in Asia after KRW amid expectations for more fund inflows into the region as developed central banks such Bank of Canada adopt a dovish stance, says Stephen Innes, a Head of Trading  at Asia

** “Malaysia’s budget, although a complete election-inspired one, remained fiscally prudent which looks good in foreign investors’ eyes and rising oil prices are great for the ringgit,” says Innes

* Pension fund EPF sees MYR’s weakness as a tactical opportunity and is of the view that the currency would strengthen on a long-term structural basis, according to CEO Shahril Ridza Ridzuan

* Weak ringgit is prompting Standard Life Aberdeen to look at interesting Malaysian stocks that have underperformed this year, says Hugh Young, head of Asia at the company

* 10-year bond yield climbs 3bps to 3.95% after sinking 12bps Tuesday

** Gains in the bond market were spurred by a rebound in US Treasuries, according to Maybank Investment Bank

* ANZ recommends investors in Malaysian bonds to stay overweight cash and turn neutral on duration from underweight following a recent correction in the market, according to note Tuesday

* Fitch sees downside risk to govt’s optimistic revenue projections as its 2018 GDP growth forecast of 5.0%-5.5% assumes strong recent momentum will be maintained

* Nikkei Malaysia October manufacturing PMI 48.6 vs 49.9 September

* Political hurdles are imminent in Malaysia with a general election due by August 2018, HSBC economists including Joseph Incalcaterra wrote in note Tuesday

** Opinion polls suggest that the ruling Barisan Nasional coalition may have lost some support over the years, but should nonetheless secure a majority of seats in the upcoming election

* Police probe on state investment company 1MDB is still lacking evidence, MalaysiaKini news website reports citing AG Apandi Ali

Edge Markets via Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes