MONEY MASTER

  Key Takeaways US markets extended gains as tariff risks eased and economic data surprised positively BM KLCI rose 0.66% after Bank Negara Malaysia kept rates unchanged Ringgit strengthened for a fourth straight session Stocks to watch: NATGATE, LSH, CAPITALA, among others Wall Street Summary U.S. equities posted a second straight day of gains, buoyed by easing geopolitical tensions and encouraging economic data. The  Nasdaq Composite  climbed  0.91% , leading the advance, while the  Dow Jones Industrial Average  rose  0.63%  and the  S&P 500  added  0.55% . Markets reacted positively after U.S. President Donald Trump ruled out military action to seize Greenland, scrapped proposed tariffs, and outlined a framework to resolve the issue alongside European NATO allies. All “Magnificent Seven” stocks rebounded, led by  Meta Platforms , which surged  5.6% , followed by  Tesla  (+4.2%). Broader tech sentiment was ...

A closely watched US inflation report due Thursday is expected to  reinforce the Federal Reserve’s cautious stance , with price pressures easing only gradually and still running above the central bank’s comfort zone. What the Market Expects Economists forecast that the  personal consumption expenditures (PCE) price index , the Fed’s preferred inflation gauge, will show  little change in momentum . Core PCE (ex-food & energy): +0.2% MoM +2.8% YoY Headline PCE: +0.2% MoM +2.8% YoY If confirmed, inflation would be  moving sideways , not accelerating — but still  well above the Fed’s 2% target . Why This Matters for Policy Core PCE tends to adjust more slowly than CPI, and recent data suggest inflation cooled only modestly toward the end of 2025. While consumer inflation closed December at  2.7% , PCE readings point to  stickiness rather than renewed disinflation . Economists note that: Inflation ran  hot but stable  in late 2025 Seasonal adj...

Market Overview Malaysia is expected to  keep its benchmark interest rate unchanged  at its first policy meeting of the year, as  strong economic growth and subdued inflation  give policymakers room to remain patient amid rising global uncertainty. According to a Bloomberg survey, all economists expect  Bank Negara Malaysia  to hold the  overnight policy rate (OPR) at 2.75% , following a single 25-basis-point cut in July 2025. Why BNM Can Afford to Hold Malaysia’s economy ended 2025 on solid footing, outperforming earlier concerns around external shocks. Key supports include: Stronger-than-expected economic growth  in the second half of 2025 Record-high exports  last year, despite fears of US tariff-driven slowdowns Inflation at a five-year low of 1.4% , well below the central bank’s comfort range Together, these factors reduce the urgency for further policy easing. External Risks Are Rising Looking ahead, policymakers remain cautious. Malays...

India’s headline inflation eased to near  record lows in September  and could fall  below 1% in October , according to Citi analysts  Samiran Chakraborty  and  Baqar M Zaidi . Despite ample room for policy easing, the  Reserve Bank of India (RBI)  is expected to  stay on hold , with policymakers debating  whether there’s a need to cut rates, not just room to do so. Core CPI, however,  rose to a two-year high , suggesting sticky price pressures in some segments. Citi cut its  FY inflation forecast to 2.3% from 2.9% , noting the RBI will likely  monitor GDP and trade data ahead of its December meeting  before considering any policy shift.

  Policy Pause Amid Uncertain Outlook The Reserve Bank of Australia (RBA) on Tuesday kept its cash rate unchanged at  3.60% , aligning with market expectations. The central bank noted that recent data suggests  third-quarter inflation may run hotter than forecast , highlighting lingering uncertainty in the economic outlook. Governor  Michele Bullock  emphasized the RBA’s data-dependent approach, saying the board will reassess in November with a fuller picture of inflation, labour market trends, and updated forecasts. “That could mean a couple more reductions. It might not. I don’t know at this point and we will look at all this again in November,” she told reporters. Market Reaction and Rate Expectations The more cautious tone dampened hopes for near-term rate cuts. The  Australian dollar strengthened 0.4% to US$0.66 , while three-year bond futures slipped, reflecting diminished easing bets. Swaps now price in just a  36% probability of a November cut ...

China left its key lending rates unchanged in September, marking the fourth straight month without adjustments as the economy shows signs of cooling. Market Snapshot 1-year loan prime rate (LPR) : 3.0% (unchanged) 5-year LPR : 3.5% (unchanged) Last cut : May 2025, aimed at lowering financing costs and supporting demand. Economic backdrop : Credit demand remains weak, growth momentum soft in 3Q. Outlook : Economists see scope for further easing before year-end. Key Takeaway Beijing is holding rates steady for now, balancing weak credit demand with the need to maintain financial stability. With growth slowing, markets expect the  People’s Bank of China may cut rates again later this year .

 Key Takeaway The  European Central Bank (ECB)  is expected to keep interest rates unchanged this week, but markets are far more worried about  France’s deepening political turmoil , which could spill over into the eurozone’s economic outlook. France in Focus Political Uncertainty:  Prime Minister Francois Bayrou faces a confidence vote he looks set to lose. If his government falls, President Emmanuel Macron must step in, raising fresh doubts over France’s fiscal repair plans. Investor Concern:  France’s instability is drawing scrutiny from global markets. Fitch Ratings, which already has a negative outlook on France, will review its rating on Friday—another potential flashpoint. ECB’s Dilemma Policy Hold Expected:  ECB officials will almost certainly  leave rates unchanged  in Frankfurt this week. Muted Guidance:  Policymakers agreed in July to stay “deliberately uninformative” about the next move, reflecting uncertainty over inflation ...

Key Takeaway Bank Negara Malaysia (BNM) is expected to keep its  overnight policy rate (OPR) at 2.75%  today, pausing after July’s surprise cut as policymakers gauge the impact of easing amid tariff risks and subdued inflation. Policy Expectations Consensus : 22 of 24 economists expect  no change  at 2.75%. Minority View : 2 economists see another  25bps cut . Context : BNM delivered its first rate cut in five years in July and injected liquidity into banks to support lending. Growth Outlook Forecasts : GDP growth expected at  4%–4.8%  in 2025 (BNM). CIMB Analysts : Lower-than-feared U.S. export levy (19%) keeps expansion within forecast range. Risks : Slowing exports (BNM warning). Potential U.S. tariffs on semiconductors. HSBC View : Growth above 4% in current external environment would be “decent.” Base forecast:  4.2%  for 2025. Inflation Outlook BNM Forecast : Trimmed to  1.5%–2.3%  (from 2%–3.5%). Drivers to Watch : Higher...

South Korea’s central bank  left its benchmark interest rate unchanged at 2.50%  on Thursday, in line with market expectations, while  warning of “significant uncertainties”  stemming from rising trade tensions with the US and tepid domestic demand. Key Decision Highlights Interest Rate : Held at  2.50% , matching consensus from all 33 economists surveyed by Reuters. Monetary Stance : Maintains an  accommodative policy path  to support growth, despite elevated household debt. Key Concern : Rising trade threats from the  US  and  slow domestic recovery . “There are significant uncertainties concerning developments in trade negotiations with the US, and the pace of domestic demand recovery,” said the Bank of Korea (BOK). Trade Tensions in Focus US President  Donald Trump’s new tariff plan , effective August 1, has heightened anxiety across Asia. Export-heavy economies like  South Korea  could face serious headwinds as global...