Parliament Reopens, Lawmakers Grill Ministers

Spot USD/MYR last changes hands at MYR4.2280, 30 pips lower on the day, still within the confines of yesterday's range. Bears look for a dip through Jul 22 low of MYR4.2215, which would turn focus to MYR4.1955, which limited losses on Jul 15. The main bullish target is located at MYR4.2440, the high print of Jul 21 & recent cycle peak. A breach of that level would open up Jul 24, 2020 high of MYR4.2665.

• Malaysian parliament reopened for the first time since the announcement of a state of emergency at the beginning of this year, but lawmakers were left disappointed as PM Muhyiddin left after delivering his address to the house and FinMin Zafrul filled in to deliver the wind-up speech. In addition, some opposition lawmakers voiced their frustration as the house was not allowed to vote on the emergency declaration (due to expire on Aug 1) or the six ordinances issued during the state of emergency (revoked by the gov't on Jul 21).
• Worth noting that FinMin Zafrul told lawmakers that imposing a windfall tax would weigh on investor confidence and warned that a sudden introduction of the levy could deprive Malaysia of some attractive investment opportunities.
• Meanwhile, PM Muhyiddin has seemingly brought the political turmoil within his political camp under control for now, while the opposition Pakatan Harapan alliance said hey would not table a motion of no confidence against the PM. In a gesture of goodwill, Muhyiddin offered three opposition politicians seats on a committee which would oversee the implementation of the National Recovery Plan.
• Malaysia reported the largest daily death toll from Covid-19 since the beginning of the pandemic on Monday, taking the total number of fatalities to 8,201.
• Malaysian Department of Statistics will release the monthly trade report tomorrow. Trade surplus is expected to have widened to MYR17.90bn in June from MYR13.74bn prior, according to Bloomberg consensus forecast. In the meantime, focus will fall on the resumed sitting of Malaysian parliament.