Malaysia’s ringgit rallied the most in more than two months and bonds rose after China’s trade data brightened the outlook for the Southeast Asian nation’s exports.
Overseas shipments from China, Malaysia’s second-biggest market, climbed 7.2 per cent in August from a year earlier, beating the 5.5 per cent increase forecast by economists in a Bloomberg survey, a report showed yesterday. Ten-year US Treasury yields fell four basis points to 2.90 per cent today after reaching a two-year high of 3.01 per cent on September 6.
"Malaysia is more of a growth story, so if China’s exports do pick up because of the improving global growth Malaysia should benefit as well," said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. "There’s some sense that US bond yields may be stabilizing so that’s contributing to the relief."
The ringgit advanced 1.1 per cent, the most since June 25, to 3.2915 per dollar as of 5.15pm in Kuala Lumpur, according to data compiled by Bloomberg. The currency lost 1.3 per cent last week. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell seven basis points to 9.9 per cent.
Official data due September 11 may show Malaysia’s factory output climbed in July at the fastest pace since January. Industrial production increased 4.9 per cent from a year earlier, after expanding 3.3 per cent the previous month, according to the median estimate of economists in a Bloomberg survey.
The yield on the 3.26 per cent sovereign bonds due March 2018 fell two basis points, or 0.02 percentage point, to 3.6 per cent, according to data compiled by Bloomberg. The rate on the 3.48 per cent notes maturing March 2023 dropped three basis points to 3.92 per cent.
US payrolls in the world’s largest economy rose 169,000 last month, trailing the 180,000 gain forecast in a Bloomberg survey, a September 6 report showed. The employment figures are the last the Federal Reserve will see before its September 17-18 meeting to discuss the US$85 billion of monthly stimulus.
"The market is still looking for a September start to tapering but the odds in some people’s minds have been reduced by the weaker-than-expected number," said Khoon Goh, a strategist at Australia & New Zealand Banking Group Ltd in Singapore. "We’ll see further strength in Asian currencies to start off the week as the disappointing payrolls number continues to spread through."-- Bloomberg