FW: RHB FIC Rates & FX Market Update - 8/12/17

 

 

 

 

8 December 2017

 

 

Rates & FX Market Update

 

 

Stopgap Bill to Avert Government Shutdown This Week

 

Highlights

 

¨   Global Markets: The US Dollar rose has much as 0.21% on Thursday as (i) the risk sentiment strengthened with both House and Senate passing a two-week stopgap spending bill (until December 22^nd) a day before the official deadline to clear the immediate risk of a partial government shutdown and (ii) as White House officials reported that President Trump plans to release a long-promised infrastructure plan in January, which pushed the curve to steepen; the 2/10 spread widened above 50bps by 6bps. We remain neutral USD as near term uncertainties linger.

¨   AxJ Markets: Over in Malaysia, end-November foreign reserves climbed to USD101.9bn (previous: 101.5bn) as foreign inflows continued to return to the country amid improvements in sentiment alongside BNM's hawkish signals. Re-accumulation of foreign reserves will serve to bolster Malaysia's external defences in the event of elevated volatility, given various lingering risks in global financial markets; stay constructive on the MYR over the medium term.

¨   The GBPUSP pair retraced the previous drop as Ireland and Britain might be close to a deal on the Irish border renewing Brexit optimism. We remain cautious at this juncture given political dissensions with PM May's cabinet and as a previous deal blew out earlier this week; remain neutral GBP.

 

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