Macro: US core retail sales remained healthy. Global trade negotiations come to a stall. Malaysia yet to decide on RON95 subsidy rationalisation start.
Forex: DXY up 0.8% as geopolitical tensions flared up, ahead of Fed and BOE meeting. BNM sees higher ringgit volatility in the longer term.
Fixed Income: UST posted gains, with long-end outperforming on a dovish next Fed Chair bets. MGS saw more limited losses, though sentiment remained cautious.
FX Daily Rates Vs. USD Last Close Per cent DXY 98.82 0.8 EUR/USD 1.148 (0.7) AUD/USD 0.648 (0.8) GBP/USD 1.343 (1.1) USD/JPY 145.29 0.4 USD/MYR 4.244 0.0 USD/IDR 16,280 0.1 USD/THB 32.57 0.3 USD/SGD 1.286 0.5 USD/CNY 7.187 0.1
Ringgit Outlook for The Week 1 2 Resistance 4.300 4.310 Support 4.200 4.180
Major Sovereign Yields (%) Sov. Yield Last Close bps UST 2Y 3.95 (1) UST 10Y 4.39 (6) Germany 10Y 2.54 1 UK 10Y 4.55 2 Japan 10Y 1.47 3 Australia 10Y 4.26 2 China 10Y 1.69 (1)
MGS Bond Yields (%) MGS Last bps 3-Year 3.21 0 5-Year 3.27 0 7-Year 3.50 0 10-Year 3.59 2 15-Year 3.73 0 20-Year 3.80 0 30-Year 4.01 0
MYR Swap Rates (%) Swap / Rates Last Close bps IRS 1-Year 3.28 (2) IRS 3-Year 3.20 (1) IRS 5-Year 3.28 (1) IRS 7-Year 3.38 (1) IRS 10-Year 3.52 0 3M KLIBOR 3.50 0
Key Commodities Commodities Last Close Per cent Brent (USD/bl) 76.45 4.4 WTI (USD/bl) 74.84 4.3 Gold (USD/oz) 3,388 0.1 CPO (RM/tonne) 4,049 0.0
Policy Rates Central Banks Current Next US Fed Funds 4.50 18-Jun ECB Deposit Rate 2.00 24-Jul BOE Base Rate 4.25 19-Jun RBA Cash Rate 3.85 28-Jul BOJ Cash Rate 0.50 31-Jul PBOC 1Y LPR 3.00 n.a. BOK Base Rate 3.00 -
BNM OPR 3.00 09-Jul Sources: Bloomberg, Trading Economics, AmBank Economics Note: Changes are based on day-on-day percentage, except for MGS Yield, Sovereign Yields, and IRS, where changes are in bps.
Macro Global: US retail sales fell 0.9% m/m in May, driven by a pullback in motor purchases after earlier frontloading. Core retail sales rebounded to a 0.4% m/m growth (consensus: +0.3%; Apr: -0.1%), suggesting consumer spending remain healthy. Global trade negotiations appear to have stalled, with the EU reportedly refusing to hold a meeting with China due to a lack of progress on trade disputes, even as Trump denounced the EU as 'not offering a fair trade deal' while Japan is being 'tough' in trade talks. Meanwhile, Fed's FOMC meeting today (consensus: no change to the FFR) will take place amid heightened geopolitical risks, even as the US Supreme Court is asked to weigh voiding several of Trump's global tariff measures by as soon as end-2025.
Malaysia: FM2 Amir Hamzah said the government has yet to decide when to commence RON95 subsidy rationalisation, adding that they will have discussions when they can do it. PM Anwar Ibrahim said Shell will raise its investments in Malaysia by more than RM9bn within 2-3 years.
Forex Global: DXY rose 0.8%, once again finding significant support as global geopolitical conditions worsen, given gains in UST as the highest yielding safe-haven bond. Beyond the USD, the usual safe-haven CHF and JPY outperformed G10 peers, while the EUR and AUD fell a steeper 0.7-0.8%. GBP however underperformed (-1.1%) as markets digest the impact of higher energy prices and the US trade deal, ahead of the BOE's MPC meeting tomorrow.
MYR: Ringgit held steady on Tuesday, though opened weaker this morning (18 June) following overnight developments. BNM also flagged that the ringgit may see higher volatility in the longer-term, while reiterating that it will ensure the exchange rate 'does not run too far'.
Fixed Income Global Bonds: Equities fell while UST posted gains overnight, as safe-haven demand from the Middle East conflict outweighed the better-than-expected US retail sales data. The curve steepened as duration bonds outperformed, as markets raised bets that the next FOMC Chairman (after May 2026) will take a more dovish stance than Powell, suggesting today's medium-term dot plot projections may be looked past. JGB yields rose as markets took profit, after the BOJ confirmed earlier news that it will taper the reduction of JGB purchases to JPY200bn/quarter (current: JPY400bn/quarter) starting April 2026. The BOJ Governor also reaffirmed it will continue to cut back its bond purchases, though it said it may be cautious if the pace of cutting back is too rapid that it will affect market conditions.
MYR Bonds: MGS saw more limited losses of 0-2bps though remain pressured by cautious global sentiment, with trading activity also down. In the PDS space, gainers outnumbered losers despite some profit taking pressure. Flows were led by papers such as AAA rated PASB 2031s where PASB 06/31 was priced 20 bps lower to 3.61% on MYR35 million volume.
Other Markets Oil: Crude prices strengthened 4% amid escalating tensions in the Middle East, as Trump demanded Iran's 'unconditional surrender' while directly threatening Iran's Supreme Leader.
Source: AmInvest Research - 18 Jun 2025
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