Interest Rate / Monetary news in Malaysia
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MGS yields climb to 3.915% as fund managers weigh redeploying cash
Yields on Malaysian Government Securities have risen over the past year, with the benchmark 10-year MGS at 3.915% on Sept 3 against about 3.421% a year earlier. Fund managers say the higher yields may open opportunities for fixed-income investors but are staying cautious, holding cash in case the bond market corrects further. Bank Negara Malaysia kept the OPR at 2.75% last Thursday.
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Goldman, JP Morgan expect Fed to raise rates 25 basis points in September
Goldman Sachs and JP Morgan now expect the US Federal Reserve to raise interest rates at its Sept 15-16 meeting, after August inflation readings came in above expectations and oil climbed past US$100 a barrel. Markets price an 87% chance of a quarter-point hike, up from about 70% before the data.
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OCBC keeps medium-term bullish view on gold ahead of Fed decision
OCBC maintained a constructive medium-term outlook on gold even as prices are expected to stay range-bound while investors await the US Federal Reserve policy decision. The bank said elevated real yields remain the main near-term obstacle, but investment demand, central bank purchases and fiscal credibility concerns provide support. Gold was last trading around US$4,350 an ounce.
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Bank Negara to absorb excess liquidity, short-term interbank rates seen stable
Bank Negara Malaysia will conduct reverse repo tenders totalling RM6 billion and RM600 million, plus RM200 million Islamic reverse repos, to absorb excess liquidity. Banking system liquidity stands at RM32.78 billion in the conventional market and RM23.05 billion in the Islamic money market. Short-term interbank rates are expected to remain stable.
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Fed expected to hike rates this week in first test for Warsh
The US Federal Reserve is expected to raise interest rates at its two-day meeting ending Wednesday, after August inflation held at 3.4 per cent. Chair Kevin Warsh faces pressure to either hike to fight inflation or hold steady as the White House prefers. The decision will affect global markets, including the ringgit and Malaysian borrowing costs.
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Standard Chartered: Fed likely to hike 25bps next week on strong US jobs, inflation data
Standard Chartered expects the US Federal Reserve to raise interest rates by 25 basis points next week after August employment and producer inflation data came in stronger than expected. The bank's economist Rajat Bhattacharya calls it a possible credibility hike, though he does not see it as the start of a fresh tightening cycle. The 10-year Treasury yield has climbed to 4.97%, its highest in three years, and Standard Chartered sees limited room for further sustained increases.
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Kenanga: MGS yields to stay elevated into September FOMC, 10-year forecast raised to 3.88%
Malaysian government bond yields are expected to keep an upward bias in the near term, with Kenanga Research citing higher global rates, oil-price pressure and rising term premiums ahead of Budget 2027. The 10-year MGS yield rose 21.5 basis points to 4.134% last week, and Kenanga raised its end-2026 forecast to 3.88% from 3.63%. Yields could retrace if the US Federal Reserve holds rates steady at its September meeting.
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US stocks gain 1% as CPI stays above Fed target
US stocks rose about 1% on Friday after Consumer Price Index data showed inflation still above the Federal Reserve's 2% goal. Prices rose 0.4% month-on-month and 3.4% year-on-year, in line with forecasts, and traders now price an 86% chance of a 25 basis point rate hike at next week's FOMC meeting.
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Oil retreats from four-month high as global bond selloff pauses
Global bond and equity markets steadied on Friday as Brent crude pulled back from a four-month high of US$109.97 a barrel, though it was still up about 10% for the week. The oil surge, driven by fighting around the Strait of Hormuz and Yemen's Mocha port, has fuelled inflation fears and bets that the US Federal Reserve will raise rates this month, with markets pricing a 67% chance.
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ECB rate hike seen continuing as oil surge lifts inflation risk
Goldman Sachs, Citigroup and Barclays expect the European Central Bank to raise interest rates again after Thursday's 25 basis point increase, with Citi forecasting a further hike in March 2027. The banks point to renewed energy price pressure, including crude above US$100 a barrel, as inflation is projected to stay above the ECB's 2% target until late 2027. Traders price a 93.9% chance of another quarter-point move in December.
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US 10-year Treasury yield nears 5% as oil surge lifts rate-hike bets
US Treasury yields climbed to their highest since 2023, with the 10-year note at 4.97 per cent, as Brent crude jumped about 13 per cent on the week to US$108.68 a barrel. Traders now price a 72 per cent chance of a Federal Reserve rate hike next week, up from 49 per cent, ahead of the US consumer price index report.
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US inflation data due Friday may push Fed to first rate hike since 2023
A US consumer inflation report due Friday could lead the Federal Reserve to raise interest rates for the first time in over three years, as the war with Iran drives energy costs higher. Economists expect August CPI at 3.4% year-on-year, still above the Fed's 2% target, and traders see a 71.4% chance of a quarter-point hike next week. The report is filed from Washington.
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US producer prices rise 5.4% in August, lifting odds of September Fed hike
US producer price inflation accelerated to 5.4% year-on-year in August, driven by a 24.1% monthly jump in diesel fuel, while core PPI rose 4.6%. Jobless claims stayed low at 206,000, and markets now price a 71.8% chance of a 25 basis point Fed rate hike at the September FOMC meeting. Malaysian bank MBSB said the data strengthens the case for further tightening.
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Oil spike lifts bond yields, sinks Asian stocks as inflation fears grow
Global bond yields hit multi-year highs and Asian share markets fell on Friday after Brent crude jumped 6 per cent to a four-month high of $109.97 a barrel. The oil surge, driven by US-Iran attacks and Houthi gains in Yemen, has raised inflation risks and bets that the US Federal Reserve will raise rates this month.
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ECB raises key rate to 2.5% as Middle East conflict lifts energy prices
The European Central Bank raised its benchmark interest rate by a quarter point to 2.5% in Berlin, its second hike this year, as renewed Middle East fighting drives energy prices higher. Brent crude climbed back above $100 a barrel and European natural gas hit a three-year high, with the ECB warning inflation will stay above its 2% target for an extended period.
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ECB raises deposit rate to 2.5% as oil-driven inflation persists
The European Central Bank raised its deposit rate by a quarter point to 2.5%, its second increase since the Iran war began, as oil prices climbed to $105 a barrel. President Christine Lagarde called the move a "no brainer" and markets now price three more hikes by October 2027. Euro zone inflation is forecast at 3% this year, with growth upgraded to 0.9%.
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ECB rate decision and US inflation data awaited as oil tops US$100
Global markets are holding steady before the European Central Bank's expected second rate hike of the year and key US inflation figures. Brent crude has pushed past US$100 a barrel for the first time since July after renewed Middle East attacks, driving bond yields in Germany, France, the UK and the US to multi-year highs. Traders are watching ECB president Christine Lagarde's language for signals on further increases.
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ECB set to raise rates again as Iran war pushes oil past US$100
The European Central Bank is expected to raise its policy rate to 2.50% on Thursday, its second increase this year, after attacks involving Iran and the United States pushed oil above US$100 a barrel. Euro zone inflation is above 3%, and economists expect the ECB to keep the door open to further tightening even as growth holds up.
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Weak bond auctions in Southeast Asia seen as buying chance for funds
Fund managers including Western Asset Management and Aberdeen Investments say weak demand at recent Southeast Asian government bond auctions is creating entry points, citing resilient domestic demand and strong fundamentals. Malaysia's 2046 note sale at end-August drew its second-lowest bid-to-cover this year, while Thai, Philippine and Indonesian auctions also saw weak demand. Yields have climbed across the region on global rates, oil above $100 a barrel and expectations of a Bank Negara Malaysia rate hike.