Muhyiddin Agrees To Reopen Parliament, Tensions With UMNO Simmer

Spot USD/MYR faltered at the re-open, catching up with the greenback's losses seen after hours on Friday. The rate last sits -65 pips at MYR4.1560, with bears looking for a slide through Jun 25 low of MYR4.1423, towards the 50-DMA at MYR4.1290. Bulls need a jump above Jul 2 high of MYR4.1663, which would expose Jun 24 cycle high of MYR4.1710.

• Five states are moving to the second phase of the Natinal Recovery Plan today. On Saturday, FinMin Zafrul & Defence Min Ismail Sabri confirmed that the criteria for moving to consecutive stages of the reopening plan will now be applied at state level. Health experts called for caution, as restrictions are eased in Kelantan, Terengganu, Pahang, Perak and Perlis.
• PM Muhyiddin has bowed to pressure from all quarters and will reopen parliament "as soon as possible before Aug 1," according to a statement by his Law Minister Takiyuddin. The statement came after Malaysia's monarch repeatedly called for the parliament to sit by the end of the month, while opposition leaders urged fellow MPs to reassemble on Jul 19 regardless of Muhyiddin's decision. Takiyuddin noted that the cabinet will finalise the details of reopening plan this coming Wednesday.
• Meanwhile, Muhyiddin will remain in hospital for a few more days after being admitted on Jun 30. His office said that examinations showed no signs of a recurrence of cancer. Muhyiddin was declared free from a pancreatic cancer in June last year.
• Health issues may limit the PM's ability to manage simmering political tensions with coalition partners. The Straits Times suggested that "Malaysian politics is in for a bumpy week," as sources noted that UMNO Pres Zahid's faction wants the party to pull its support for Muhyiddin's gov't early this week.
• The latest monetary policy decision from Bank Negara Malaysia takes focus this week. All but one analysts surveyed by BBG expect BNM to leave interest rates on hold Thursday, with the lone dissenter calling for a 25bp cut.