Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Data released last week showed that Malaysia's consumer price inflation came to 2.6% y/y in March, significantly slower than market estimates of 3.4% and the slowest print in four months. This also marked the first time in three months where inflation has fallen within BNM's comfort range of 2-3%. The March CPI print brings inflation to an average of 3.4% y/y for the year-to-date, above BNM's comfort range and core inflation meanwhile has averaged 4.2%.
The unexpectedly low CPI print raised the question if Malaysia's central bank is now more pre-disposed towards cutting its Overnight Policy Rate (OPR) in the coming months to boost slowing growth.
Last year the ringgit was the weakest-performing currency in Asia but has impressively managed to recoup some of its losses this year, its 9.8% gain making it the region's best performing in the year-to-date. Malaysian economy is not doing that badly and the current monetary policy committee (MPC) continues to view the level of the OPR at 3.25% as "accommodative and supportive of economic activity."
"The current MPC should not be too surprised by the deceleration in inflation, and since it also remains confident that growth will not deteriorate below 4% and remains wary of the risk of capital outflows, it should not view the slowdown in inflation as a 'fresh' opportunity to undertake OPR cuts." said HSBC Global in a report.
