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Market Highlights
Economic Update
Thu, 11 Dec 2025 07:59 am
US FOMC Meeting - Fed cuts 25 bps, signalling a pause

• The Fed cut the policy rate by 25 bps to 3.50–3.75%, with one dissenter favouring a larger 50-bp cut and two dissenters voting for no change.
• Powell highlighted that policy is now within the range of neutral estimates, signalling a likely pause. The dot plot shows only one 25-bp cut in both 2026 and 2027.
• The Fed will initiate USD40bn in monthly Treasury purchases beginning 12 December as part of its reserves management operations.
• While a potential Hassett chairmanship may set a more dovish tone, the broader committee composition is unlikely to shift materially.
• We maintain our baseline projection for two 25-bp cuts in April and June 2026.
• A more dovish Fed or a stronger-than-expected trade environment could provide upside to our 2026 USDMYR projection of 4.15, with the pair potentially reaching 4.05–4.10.

Economic Update
Thu, 11 Dec 2025 07:29 am
Malaysia Labour Market - External tailwinds provide near-term support to hiring

• The labour market remained stable in October, with the unemployment rate holding at 3.0% for the seventh straight month.
• Supported by a firm labour market, benign inflation, income-related measures and sustained investment flows, we maintain a resilient domestic demand growth projection of +6.3% YoY for 2025 (YTD: +6.3%; 2024: +6.5%).
• External resilience should also provide near-term support, with November’s manufacturing PMI signalling a pick-up in hiring, consistent with rising wages in the sector. 
• We maintain our unemployment forecasts at 3.0% for 2025 (10M25: 3.0%; 2024: 3.2%) and 3.1% for 2026. A steady labour market and resilient external sector point to potential upside to our current 2025 GDP forecast of +4.5% YoY (2024: +5.1%).

Economic Update
Mon, 24 Nov 2025 07:07 am
Malaysia Inflation Rate - Benign inflation supports a stable OPR outlook

Headline inflation eased to +1.3% YoY in October (Sep: +1.5%), slightly below consensus, led by lower food, electricity and petrol prices.

Core inflation edged up to +2.2% YoY (Sep: +2.1%), reinforcing our view that domestic demand remains the key growth anchor.

Muted SST passthrough, a lower RON95 price for eligible Malaysians and a firmer ringgit point to slight downside risks to our 2026 inflation forecast of +2.0% YoY.

Given the steady growth and inflation outlook, we expect BNM to keep the OPR at 2.75% through 2026.

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