AmBank Economics 1

AmBank Group

Macro: The Fed kept policy rates unchanged amid growing divergence in views. 13MP will be tabled on 28 July. Petronas sees ideal Brent breakeven price of USD50/bbl.

Forex: DXY up on hawkish-leaning Fed messaging. MYR pared intraday decline amid local news developments. PBOC pledged to expand the use of the digital yuan.

Fixed Income: UST held steady, while Bunds and Gilts saw better strength. MGS saw better gains on decent volume traded, while corporate bonds fared mixed.

FX Daily Rates Vs. USD Last Close Per cent DXY 98.91 0.1 EUR/USD 1.148 0.0 AUD/USD 0.651 0.5 GBP/USD 1.342 (0.1) USD/JPY 145.13 (0.1) USD/MYR 4.252 0.2 USD/IDR 16,300 0.1 USD/THB 32.61 0.1 USD/SGD 1.285 (0.1) USD/CNY 7.190 0.0

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 3.94 (1) UST 10Y 4.39 0 Germany 10Y 2.50 (4) UK 10Y 4.50 (5) Japan 10Y 1.46 (1) Australia 10Y 4.25 (1) China 10Y 1.64 (5)

MGS Bond Yields (%) MGS Last bps 3-Year 3.21 (0) 5-Year 3.27 (1) 7-Year 3.49 (1) 10-Year 3.59 (0) 15-Year 3.73 0 20-Year 3.81 1 30-Year 4.01 0

MYR Swap Rates (%) Swap / Rates Last Close bps IRS 1-Year 3.27 (1) IRS 3-Year 3.19 (2) IRS 5-Year 3.27 (1) IRS 7-Year 3.37 (1) IRS 10-Year 3.50 (2) 3M KLIBOR 3.50 0

Key Commodities Commodities Last Close Per cent Brent (USD/bl) 76.70 0.3 WTI (USD/bl) 75.14 0.4 Gold (USD/oz) 3,369 (0.6) CPO (RM/tonne) 4,063 0.0

Policy Rates Central Banks Current Next US Fed Funds 4.50 30-Jul 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: The Fed kept the Fed Funds Rate (FFR) unchanged at 4.25-4.50% for the fourth consecutive meeting as expected, as policymakers continued advocating for a cautious stance as it assessed economic and inflation impact from recent policies. Median dot plot projections continue to see two rate cuts this year, though FOMC members' opinion divide grew, with 7 out of 19 members now seeing no rate cuts this year (March estimate: 4 out of 19), with a hawkish bias also seen for the revised 2026 and 2027 projections. This comes as the Fed also revised its inflation forecasts for 2025-2026 while revising its growth estimates. Meanwhile, the CBO estimates that the House-passed version of the Republicans' fiscal bill will add USD2.8 trillion to the US deficit over the next decade (prior estimate: USD2.4 trillion).

Malaysia: Communications Minister Fahmi Fadzil announced that the 13th Malaysia Plan (13MP) will be tabled in Parliament on 28 July. Fahmi also said that FM2 Amir Hamzah will provide further clarification on the SST revision, even as Secretary General of Treasury Johan Mahmood said it expects an additional revenue of RM5 billion from the expanded measure in 2H25 - a number similar to projections announced in October 2024 during Budget 2025. Meanwhile, Petronas CEO Muhammad Taufik sees a Brent price of USD50/bbl as an ideal break-even to sustain energy investments while maintaining the firm's financial resilience, compared to the USD60-70/bbl breakeven price in the past five years.

Forex Global: DXY closed 0.1% higher following the Fed's hawkish-leaning messaging, supported by the SEK's sharp 1.0% decline. The Riksbank leaned dovish in its messaging after a 25bps rate cut, citing recent data of weaker growth and persistently high unemployment. AUD (+0.5%) and JPY (+0.1%) rebounded from recent heavier losses, while the EUR closed unchanged.

MYR: MYR closed just 0.2% weaker, after paring intraday weaknesses in the opening session. PBOC Governor Pan Gongsheng said he envisions a new world currency order after decades of dollar dominance, while pledging to expand the international use of the digital yuan - comments similar to ECB Lagarde's earlier comments of a 'global euro' moment. China's regulators also said they will hike a quota for investors to buy overseas assets, suggesting that Beijing is willing to open access to its financial market while reducing bullish directionality on the yuan.

Fixed Income Global Bonds: UST yields closed steady despite the hawkish-leaning Fed FOMC projections. Bonds remained aided by conflict in the Middle East, and initial jobless claims remained high at 245k. Gilts and bonds saw better gains, coming as UK and Eurozone inflation data were largely in line with expectations.

MYR Bonds: The Malaysian government bond market saw modest gains on decent volume yesterday, ahead of the FOMC meeting. The 10Y MGS closed unchanged on near MYR600 million in volume. In the corporate bond market, yields moved mixed amid relatively heavy volume traded. Notable trades include a shift downward on AA1 PKNS papers. PKNS 07/31 fell 4 bps to 3.86%, and PKNS 02/35 fell 1 bps to 3.97%.