KUALA LUMPUR (April 22): Malaysia’s ringgit falls and bonds extend losses as fears of a capital flight from the nation persist, with even the revival of a $34b property and transport hub failing to excite traders. * USD/MYR advances 0.1% to 4.1363 after rising 0.5% last week in its fourth straight weekly gain** Resistance 4.1500, 4.1785, 4.1925; support 4.0930, 4.0740, 4.0545* Scotiabank remains bearish on the ringgit amid concern Malaysian bonds may be dropped from the FTSE Russell bond index, says Qi Gao, FX strategist at Scotiabank in Singapore** In near term, MYR will derive support from higher oil prices arising from U.S. sanctions on Iran** If USD/MYR rallies through the 4.15 level, it will head for 4.20* 10-year govt bond yield climbs for a 7th day, rising 3bps to 3.95%, set for its highest close since mid-February* READ: Rate Cut May Not Save Ringgit Bond Rally as Index Outflow Looms* Sentiment toward Malaysian bonds has been damped by FTSE Russell’s move but the scenario for worst-case outflow isn’t likely to materialize, Nik Mukharriz, CIMB fixed-income strategist, writes in note Monday** Any selling will be cushioned by the depth of onshore bond market and ample domestic liquidity* Govt is reviving the Bandar Malaysia project that was started by troubled state fund 1MDB, PM Mahathir Mohamad said Friday* Foreign-exchange reserves data for mid-April are due 3pm local time; no forecast, holdings +0.4% to $103b in the final two weeks of March

Source: The Edge Markets April 22, 2019 04:30 UTC