Ringgit weakens with Asia FX on trade caution

KUALA LUMPUR (Jan 15): Malaysia’s ringgit retreats along with most regional peers as renewed concerns about U.S.-China trade relations damp sentiment.

* USD/MYR rises 0.1% to 4.0780, paring its drop so far this year to 0.3%

** Resistance 4.1128, 4.1225, 4.1460; support 4.0545, 4.0435, 4.0083

* Malaysia’s 10-year yield down 1bp to 3.29%

* Govt sold RM2.5b of 2034 bonds at avg 3.507% yield on Tuesday; bid to cover was 3.4 times

* Demand at the auction was supported by local Islamic funds and constructive market sentiment, Winson Phoon, head of fixed-income research at Maybank Kim Eng Securities, writes in note

** A stronger ringgit, expectations for BNM to retain an easing bias and appetite for duration also fueled bids

* Western Asset Management is reducing its Indian bond holdings and diverting some of its funds into longer-dated Malaysian and Chinese debt

* Global funds were net sellers of $6.7m in Malaysian equities on Monday, according to exchange data

* Malaysia is considering the merits of having the state control its biggest companies, after moves to break up their dominance in some sectors led to declines in the stock market

* There’s a need to find a solution to the issue of India’s purchase of palm oil from Malaysia amid a spat between the two countries involving the commodity, Malaysia PM Mahathir Mohamad said Tuesday