KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
The US dollar and Treasuries weakened in Asian trading on Tuesday after President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, escalating concerns about central bank independence and rattling confidence in US assets.
Trump’s Intervention Shakes Market Confidence
Trump posted on his Truth Social platform that he had removed Cook on allegations of making false statements on mortgage applications. Her term, originally due to end in 2038, has now been cut short, potentially accelerating the president’s ability to reshape the Fed’s policy stance.
The move underscores Trump’s increasingly combative relationship with the Fed. He has repeatedly threatened to fire Fed Chair Jerome Powell — though lacking the legal authority except “for cause.” Powell’s current term as chair expires in May 2026.
“There’s no credibility. That’s the basis of the US being the safest investment in the world. If you’re a responsible investor, it gives you pause,” said Bart Wakabayashi, Tokyo branch manager at State Street.
Market Reaction: Dollar Weakens, Yields Edge Higher
FX markets:
Dollar fell 0.4% to ¥147.24.
Euro rose 0.3% to US$1.165.
Treasuries:
10-year yield climbed to 4.289%, up from 4.275% on Monday.
Equities:
MSCI Asia ex-Japan dipped 0.2%.
Nikkei fell 1.3%.
US stock futures were weaker, with S&P 500 e-minis down 0.17% at 6,444.5.
The reaction highlights investor unease that political interference could erode the Fed’s credibility, undermining the appeal of US assets as a global safe haven.
Policy Outlook: September Cut Still in Play
Despite the political turbulence, markets continue to price in monetary easing. Fed funds futures reflect 84% odds of a 25bps cut in September, according to CME FedWatch. Major banks including Barclays, BNP Paribas, and Deutsche Bank also expect a cut.
Key data this week could sway expectations, notably US personal consumption expenditures (PCE) inflation on Friday — the Fed’s preferred inflation gauge. A hotter-than-expected print could complicate Powell’s dovish pivot, especially after stronger producer price data last month.
Commodities & Safe Havens
Gold edged higher to US$3,378/oz, reflecting safe-haven flows.
Oil slipped 0.4% to US$64.56/bbl, with broader macro concerns overshadowing supply-side risks.
Investment Implications
Currency: The dollar’s vulnerability could extend if political risk premium deepens, supporting the yen, euro, and high-yielding Asian FX.
Rates: Short-term Treasuries may benefit from Fed easing expectations, but long-dated bonds face upward pressure if inflation proves sticky.
Equities: Rising political uncertainty adds another layer of volatility to US stocks already sensitive to Fed policy shifts and trade tariffs.
Bottom Line: Trump’s removal of Fed Governor Cook marks an escalation in political interference risks. While markets still price a September cut, credibility concerns around the Fed could limit the dollar’s safe-haven status and reshape investor allocation into Asia and Europe.
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