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BNM: USD/MYR Firmer, As US Inflation Boosts Short End US Yields

BNM
GlobalEM BulletBulletAPACRegionEmerging Market News
  • USD/MYR is up at 4.3393 in Kuala Lumpur morning; versus Wednesday's close of 4.3298.
  • Bloomberg Asia dollar spot index is flat at the open and the Bloomberg Dollar spot index is 0.10% higher.
  • The US core CPI beat is aiding broader USD sentiment, with front end yields higher over the past 24 hours.
  • USD/MYR one-month implied volatility is down this morning to 6.08%, versus 6.0025% close on Tuesday.
  • Malaysia's 10-year bond yield is 1bp lower in yield at 3.74%
  • Malaysia 5 yr USD CDS at 38bps (yesterday close 38bp, 5-year low 32 in 2020).

Headlines

  • Core US Inflation unexpectedly picked up in August reducing the chances of a large Federal Reserve interest-rate cut next week and providing downward pressure on the USD (source:  Bloomberg).
  • Brown Brothers Harriman noted that the market’s reaction after the debate — a softer dollar, falling Treasury yields and a drop in US stock futures — could indicate an unwinding of “Trump trades”.  This all poses upside options for Asian currencies. 

Data Releases

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  • USD/MYR is up at 4.3393 in Kuala Lumpur morning; versus Wednesday's close of 4.3298.
  • Bloomberg Asia dollar spot index is flat at the open and the Bloomberg Dollar spot index is 0.10% higher.
  • The US core CPI beat is aiding broader USD sentiment, with front end yields higher over the past 24 hours.
  • USD/MYR one-month implied volatility is down this morning to 6.08%, versus 6.0025% close on Tuesday.
  • Malaysia's 10-year bond yield is 1bp lower in yield at 3.74%
  • Malaysia 5 yr USD CDS at 38bps (yesterday close 38bp, 5-year low 32 in 2020).

Headlines

  • Core US Inflation unexpectedly picked up in August reducing the chances of a large Federal Reserve interest-rate cut next week and providing downward pressure on the USD (source:  Bloomberg).
  • Brown Brothers Harriman noted that the market’s reaction after the debate — a softer dollar, falling Treasury yields and a drop in US stock futures — could indicate an unwinding of “Trump trades”.  This all poses upside options for Asian currencies. 

Data Releases

Keep reading...Show less