Snapshot Summary

Global FX: The dollar fell to close at 106.28 amidst a lack of data day

Global Rates: Expectations of Trump policy's boost to the US economy prompted UST yields to decline slightly

MYR Bonds: Positive tone for local govvies as the 10Y UST yield retraced down from a four-month high

USD/MYR: The ringgit started the week on a weaker footing

Macro News

Thailand: Thailand's GDP grew by 3.0% y/y in 3Q2024, up from a revised 2.2% in Q2 and exceeding market expectations of 2.6%. This marks the highest annual growth since 3Q2022, primarily driven by increased government spending (6.3% y/y compared to 0.3% in Q2) and a recovery in fixed investment (5.2% y/y versus -6.1%), aided by the release of the annual budget.

The US: NAHB/Wells Fargo Housing Market Index in the US increased to 46 in November, the highest level in seven months, up from 43 in October and surpassing forecasts of 44. Builders are optimistic about market conditions improving following the Republicans' trifecta victory.

Fixed Income

Global Bonds: US Treasuries yields fell just slightly as the markets continued to be affected by expectations of a Trump policy boost to the US economy. US stock markets continue to be supported, ensuring a lack of support for US government bonds.

MYR Government Bonds: The Malaysian government bond market received support from a firm auction for the 5Y GIl 07/29 yesterday with a final BTC of 2.00x. Meanwhile, the positive tone in the local bond space also came on the back of the 10Y UST yield, retracing down from its four-month high of 4.50%.

MYR Corporate Bonds: Corporate bond trading was mixed as yields moved sideways. Various AAA and AA names were traded while we noted yield realignment on select infrastructure and utilities-related issuers. Of these, we noted AAA TNB Power Gen 06/37 up 2 bps to close at 4.11% and its 03/38 tranche holding steady at 4.13% on a relatively heavy MYR60 million volume.

Forex

The US: The dollar started the week off on a weaker note, falling further to close at 106.28 amidst a lack of data day. This week's US Flash PMI data would be the data investors will look at to gauge the economic standing and the Fed's easing cycle path.

Europe: Both the EUR and GBP went up against the weaker dollar. On another note, top ECB policymakers (Governing Council Luis de Guindos and Bundesbank Joachim Nagel) expressed greater concern over the potential impact of upcoming US trade tariffs on eurozone growth than inflation, highlighting the risks of protectionist policies.

Asia Pacific: The Japanese yen slipped on Monday as Bank of Japan Governor Kazuo Ueda signalled potential monetary tightening but remained vague on the timing, citing uncertainties despite progress toward sustained wage-driven inflation. China's yuan remained steady on Monday, supported by the PBoC's stronger-than-expected midpoint guidance and signs of an economic uptick. Still, the prevailing sentiment remains focused on continued weakness amid concerns over potential U.S. tariffs and fragile economic recovery.

Malaysia: The Malaysian ringgit erased Friday's gains, as it started on weaker footing this week, failing to take advantage of a lower dollar. The focus today will be on exporting data later today in the afternoon.

Other Markets

Gold: Gold prices rebounded on Monday, rising 1.9% to USD2,612/oz, as lower treasury yields and a softer dollar provided support following a six-session losing streak.

Oil: Brent crude and WTI jumped 3.2%, driven by a production halt at Western Europe's largest Norway's Johan Sverdrup oilfield and heightened supply concerns amid escalating Russia-Ukraine tensions.

Source: AmInvest Research - 19 Nov 2024