Malaysian Politics Draw Attention Again

Spot USD/MYR trades -10 pips at MYR4.1845, with local headline flow centred around political matters. Bears look to a swing past the 200-DMA/Jan 13 low at MYR4.1723/20, which would clear the way to Dec 31 low of MYR4.1642. Conversely, a rebound above Jan 19 high of MYR4.1960 would open up Jan 7 high of MYR4.2175.

• The Menteri Besar of Johor pulled the trigger on the dissolution of state assembly, paving the way to a snap election (see our earlier bullet for more colour on implications for federal politics). The Chief Minister, who doubles as chairman of the local UMNO chapter, suggested that Barisan Nasional should contest the election alone and could win as many as two-thirds of contested seats, although the final decision rests with Barisan Nasional Supreme Council.
• Participants await the release of Malaysia's December trade data, due this coming Friday.