Published on 19 Jul 2024.
Foreign holdings of Malaysian bonds fell by RM576.8 mil in June (May: net inflow of RM5.5 bil), led by the selloff of RM2.6 bil of MGS. The decline in MGS holdings was likely a result of a lack of rollover options, given a large negative net issuance amid lumpy maturities last month (matured: RM21.5 bil; net issuance: RM16.5 bil). Foreign buying of GII continued in June (RM1.4 bil), as did purchases of short-term MTB and MITB (RM1.2 bil).
The bond market could enjoy further attention in July as a softer than expected US inflation print and dovish remarks by the US Federal Reserve (Fed) Chair on 15 July convinced markets that the Fed would cut interest rates in September. The market-assigned probability of a rate cut in September surged to 97% on 18 July from circa 64% as at end-June, according to CME FedWatch Tool data.
Yields of 10-year UST securities and MGS dropped by a respective 15.0 bps and 3.2 bps m-o-m, reaching 4.36% and 3.88% by the end of June (end-May: 4.51% and 3.91%). As at 18 July, the ringgit appreciated to 4.67 against the US dollar (end-June: 4.72) while 10-year UST and MGS yields respectively eased further at 4.20% and 3.83%.
Analytical contact Woon Khai Jhek, CFA (603) 3385 2512 khaijhek@ram.com.my |
Media contact Sakinah Arifin (603) 3385 2500 sakinah@ram.com.my |
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Nur Rasyidah Abd Karim (603) 3385 2490 rasyidah@ram.com.my |
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Publication | Date Published | Category | |
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Bond Market Monthly - July 2024 | 19-Jul-2024 | Bond Market Monthly | View PDF |