PUBLIC BANK MONEY MARKET REVIEW FOR THE WEEK ENDING AUG 25, 2017

>MGS yields closed lower

>Forthcoming Tender: Reopening of 7-year MGII

Yields of Malaysian Government Securities (MGS) closed mostly lower in tandem with US treasuries amid tussle over raising US debt ceiling in the congress, coupled with on-going US political conflicts which overshadowed economic growth.

Bank Negara announced the reopening of 7-year MGII maturing August 2024 with an auction size of RM3.5bil.

MONEY MARKET

>Klibor: No change in rates

>Bank Negara remained steadfast in borrowing short-term money

Bank Negara mopped up more liquidity from the market through its conventional money tenders. The central bank conducted borrowings amounting to RM23.4bil against its term maturities of RM15bil with financial institutions.

Kuala Lumpur Interbank Offered Rate (Klibor) remained unchanged across all tenors.

In the deposits market, overnight money traded between 2.90% and 3%. The 1 week to 3 week money traded at rates between 3.05% and 3.12%. Meanwhile 2 and 4 months Negotiable Instruments of Deposits last transacted between 3.37% and 3.52% respectively while the 3 months Bankers Acceptances last traded at 3.44%.

>US Initial Jobless Claims Rose

>UK’s GDP Growth Rate Unchanged

>Malaysia’s Foreign Reserves Increase

US initial jobless claims rose marginally by 2,000 to 234,000 for the week ending August 19, 2017 as compared to a 232,000 reading the previous week.

Market expectations were for an increase to 238,000.

Continuing claims for the week ending August 12 increased by 1,000 to 1.954 million as compared to the previous week’s revised reading of 1.953 million.

Meanwhile, existing home sales fell by 1.4% in July to an annual figure of 5.44 million as compared to an expectation of 5.57 million and a downwardly revised 5.51 million in June.

The United Kingdom’s GDP growth rate remained unrevised at 0.3% Q-o-Q and 1.7% Y-o-Y whilst household spending rose by 0.1% Y-o-Y, the weakest rate posted since 2014, increasing perceptions that consumer spending and business investments did not contribute to the country’s economic expansion.

The ringgit rose to the strongest in three weeks as the dollar retreated before the 3-day meeting amongst key central bankers.

On the data front, Bank Negara’s foreign reserves rose to the highest level in 2 years at US$100.4bil as of August 15.