Bond Market Updates

Early signs of interest rate outlook divergence – April 2024 – Summary

Summary Malaysia’s economy picked up by 3.9% in 1Q2024 (4Q2023: 3.0%) based on the advanced estimate, close to the official 2024 full-year gross domestic product (GDP) forecast of 4%-5%. The manufacturing sector registered a 1.9% rebound after two quarters of contraction, while growth in the construction sector accelerated to 9.8% (4Q2023: 3.5%). The Malaysian Government …

Early signs of interest rate outlook divergence – April 2024 – Summary Read More »

Market adjusts to delay in rate cuts – March 2024 – Summary

Summary Bank Negara Malaysia (BNM) projects the domestic economy to grow between 4% and 5% in 2024, aligning with the government’s estimate while highlighting a potential rebound in the manufacturing sector and a newly forecast contraction in the agricultural sector. Year-to-date exports grew by 3.9% in February, with an 11.0% increase in exports to the …

Market adjusts to delay in rate cuts – March 2024 – Summary Read More »

Bond sell-off on resilient US economy – February 2024 – Summary

Summary Malaysia registered a weaker-than-expected gross domestic product (GDP) growth of 3.0% in 4Q2023 (advanced estimate: 3.4%; 3Q2023: 3.3%) as growth in the services sector moderated while that in the manufacturing sector remained tepid, bringing the full-year GDP growth to 3.7%. We forecast a firmer growth of 4.2% in 2024 on an anticipated recovery in …

Bond sell-off on resilient US economy – February 2024 – Summary Read More »

Rate cut pushback leading to bond sell-off – January 2024 – Summary

Summary Malaysia posted a weaker-than-expected advanced gross domestic product (GDP) estimate of 3.4% as at 4Q2023 (Consensus: 4.1%; 3Q2023: 3.3%) as the services sector moderated and the manufacturing sector remained flat, which will bring the advanced estimate full year GDP growth to 3.8%, based on the advanced estimate. A stronger rebound in tourism and recovery …

Rate cut pushback leading to bond sell-off – January 2024 – Summary Read More »

Ongoing disinflation sustains market rally – December 2023 – Summary

Summary The latest economic data for Malaysia was rather mixed but largely within expectations. Domestic activities remained stable, as seen in the resilient wholesale & retail trade and stronger domestic-oriented production for October. While exports data remained subdued, petroleum and rubber products rebounded after consecutive months of double-digit decline. The Brent oil price experienced volatility …

Ongoing disinflation sustains market rally – December 2023 – Summary Read More »

Risk-on market against cautious central banks – November 2023 – Summary

Summary Malaysia posted a firmer gross domestic product (GDP) print of 3.3% in 3Q2023 (2Q2023: 2.9%) in line with the advanced estimate, bolstered by private consumption which grew at a faster pace. The latest October trade data showed some nascent signs of recovery in the external sector, supported by an anticipated recovery in the Chinese …

Risk-on market against cautious central banks – November 2023 – Summary Read More »

Escalating geopolitical risks fuel market volatility – October 2023 – Summary

Summary Domestic consumption remained resilient, while the softer decline in exports together with better-than-expected economic performance and stable industrial production growth in China may indicate a potential rebound in Malaysia’s manufacturing sector. Despite a temporary pause in the dollar index’s rally against major currencies, the Ringgit ringgit continued its weakening trend in October. The local …

Escalating geopolitical risks fuel market volatility – October 2023 – Summary Read More »

Global Risk-Off Sentiment Drives Local Yield Upsurge – September 2023 – Summary

Summary The latest economic data for Malaysia were mixed. Wholesale trade and domestic-oriented manufacturing production for July were rather resilient, whereas trade data showed continued weakness. The removal of the phrase “slightly accommodative” from the monetary policy statement may imply that the current interest rate level is appropriate. Bank Negara Malaysia (BNM) is expected to …

Global Risk-Off Sentiment Drives Local Yield Upsurge – September 2023 – Summary Read More »

Improvement in Foreign Inflows Into Malaysia’s Markets – August 2023 – Summary

Summary Malaysia’s economy registered decelerating growth of 2.9% in 2Q2023 (1Q2023: 5.6%), presaged by weaker external sector data. Nonetheless, the growth trajectory remains consistent with the official target of 4%-5%. The return of equity flows in July amid persistent inflows to the bond market led to a temporary appreciation of the Malaysian ringgit (MYR); the …

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Monetary Policies in Transition Could Lead to Bond Market Volatilities – July 2023 – Summary

Summary Malaysia’s external sector ended 2Q2023 on a weaker note, reinforcing our views of slower gross domestic product (GDP) growth data for the quarter. On the bond market, the yield spread between MGS and UST narrowed significantly and subsequently turned negative in July amid aggressive US rate tightening. While positive foreign flows into the bond …

Monetary Policies in Transition Could Lead to Bond Market Volatilities – July 2023 – Summary Read More »