PUBLIC BANK MONEY MARKET REVIEW FOR THE WEEK ENDING SEPT 21 2018

>MGS yields closed mostly lower >Reopening of 10-year MGS issued at 4.097% >Forthcoming Tender: new issue of 3.5-year GII Yields of Malaysian Government Securities (MGS) closed mostly lower as trade war concerns receded, prompting a resurgence in global risk appetite for emerging market assets. Meanwhile, the reopening of MGS maturing June 15, 2028 was successfully auctioned off at 4.097% with bids exceeding the auction size of RM3bil by 2.67 times. Bank Negara will be announcing the new issue of the 3.5-year GII maturing March 2022 with an expected auction size of RM4bil.

MONEY MARKET

>Klibor: Rates remained unchanged >Bank Negara remained steadfast in borrowing short-term money Bank Negara mopped up more liquidity from the market through its money tenders last week. The central bank borrowed RM14.6bil against its term maturities of RM10.8bil and conducted repo and reverse repo tender amounting to RM200mil and RM310mil respectively with financial institutions. Kuala Lumpur Interbank Offered Rate (Klibor) remained unchanged across all tenors. In the deposit market, overnight money traded between 3.20% and 3.25%. The, 1-week to 1-month money last traded between 3.32% and 3.43%. Meanwhile, 2 and 3-months Negotiable Instruments of Deposits last transacted between 3.65% and 3.70% while 1-month Bankers Acceptances was last traded at 3.61% in the interbank market. >US Housing Starts Up in August as Multi-Family Segment Surges >Canada’s Manufacturing Shipments Advanced More Than Estimated In July >BoJ Keeps Its Benchmark Interest Rates Steady In September US housing starts rose 9.2% to 1.28 million in August from a downwardly revised reading (1.17 million) in July. The gain was led by multi-family construction, which surged 29.3% to 406k units. Single-family starts edged up 1.9% to 876k units. Building permits, on the other hand, pulled back in August to 1.23 million (from 1.30 million in July). Both single and multi-family permits fell in the month. Canada’s manufacturing shipments rose 0.9% on a monthly basis in July, higher than market expectations for an advance of 0.6%. In the previous month, manufacturing shipments had recorded a revised gain of 1.3%. Elsewhere, the Bank of Japan (BoJ), in its September monetary policy meeting, opted to leave the key interest rate steady at -0.10%, as widely expected. Further, the central bank reiterated its pledge to keep rates very low for an extended period and maintained its view that the economy will continue to expand modestly. Malaysia’s August consumer prices rose 0.2% Y-o-Y, the lowest inflation recorded since February 2015. This was against expectations of a 0.4% Y-o-Y increase and after rising 0.9% Y-o-Y in the preceding month. Foreign reserves were also reported to have fallen slightly from US$104.4bil to US$103.9bil as of Sep 14.