While the market took a bet on a hawkish Fed, they fail to meet their expectations during the FOMC meeting rate decision late yesterday evening. The Fed maintained rates unchanged and indicated that balance sheet normalization could begin relatively soon; while being slightly dovish on inflation. This send UST down south, paring some of its losses the day before and USD index saw new 12 month

Today’s trade recap by our trading desk:-
·         While the market took a bet on a hawkish Fed, they fail to meet their expectations during the FOMC meeting rate decision late yesterday evening. The Fed maintained rates unchanged and indicated that balance sheet normalization could begin relatively soon; while being slightly dovish on inflation. This send UST down south, paring some of its losses the day before and USD index saw new 12 month lows. The local market resultantly was firmer slightly today with MYR leading the way, opening 100 pips stronger at 4.2750 levels. Bonds prices improve although secondary trades were rather thin. There was also a 10y MGS auction today which saw a weak BTC of 1.633x only, averaging 3.978. Post auction, the stock was traded around its average yield while the overall yield curve eased 0.5-1.5bps across at close.
Malaysia Government Bonds Benchmark Issues MGS Closing Level (%) Change (bp) Volume (RM m) 3-yr 3.345 -3.0 23 5-yr 3.690 -1.5 - 7-yr 3.915 -0.5 30 10-yr 3.990 -0.5 26 15-yr 4.435 - 12 20-yr 4.575 -1.5 - 30-yr 4.800 - - Source: BondStream, AmBank	Interest Rate Swap Closing Rates IRS Closing Yield (%) Change (bp) 1-yr 3.495 0.0 3-yr 3.640 0.0 5-yr 3.760 -0.5 7-yr 3.870 -0.5 10-yr 4.000 0.0 Source: Bloomberg, AmBank