- USDTHB: moving in the range 34.24-34.34 this morning supportive level at 34.15 resistance level at 34.45
- SET Index: 1,365.1 (-0.91%), 20 Dec 2024
- S&P 500 Index: 5,930.9 (+1.08%), 20 Dec 2024
- Thai 10-year government bond yield (interpolated): 2.266 (-0.25 bps), 20 Dec 2024
- US 10-year treasury yield: 4.52 (-5.0 bps), 20 Dec 2024
- Fed’s favored inflation gauge cools to slowest pace since May
- Biden signs US spending deal that averts a government shutdown
- Michigan Consumer Sentiment matches expectations, improving from the previous reading
- Fed's Hammack says dissenting rate-cut vote was due to inflation concerns
- Dollar ends the week stronger following inflation data and the Fed’s rate cut
Fed’s favored inflation gauge cools to slowest pace since May
The Federal Reserve’s preferred inflation gauge showed signs of moderation in November, supporting hopes for rate cuts in 2025. The core PCE rose 0.1% from October, below the 0.2% forecast, with an annual change of 2.8%, matching the prior month and meeting Powell's projection. The headline PCE increased by 0.128%, below the expected 0.2%, with an annual change of 2.4%. The "super core" PCE, excluding food, energy, and housing, rose 0.1%. Prices showed broad-based deceleration, with core services rising 0.2%, the slowest since August. Core goods prices fell for the first time in three months. In addition, consumer spending, adjusted for inflation, rose 0.3%, indicating resilience during the holiday season.
Biden signs US spending deal that averts a government shutdown
President Biden signed a funding bill to keep the US government running until mid-March, avoiding a shutdown and delaying future spending decisions until Trump's presidency. The bill, approved by the Senate 85-11, includes over $100 billion for disaster relief and farmers. The last-minute move came after two previous plans by House Speaker Mike Johnson collapsed under pressure from Trump and Musk.
Michigan Consumer Sentiment matches expectations, improving from the previous reading
The final data for December from the University of Michigan showed the headline remained unchanged at 74.0, as anticipated. The conditions index was revised down to 75.1 from 77.7, while the expectations index was raised to 73.3 from 71.6. Inflation expectations decreased for both short-term and long-term periods—the 1-year expectation fell to 2.8% from 2.9%, and the 5-year expectation dropped to 3.0% from 3.1%. The report highlighted a significant 32% improvement in buying conditions, largely driven by an increase in consumers anticipating higher prices for major purchases.
Fed's Hammack says dissenting rate-cut vote was due to inflation concerns
Fed's Hammack, who opposed the December rate cut, argued that data supported maintaining current policy. She stressed more work is needed on inflation, with progress uneven, and highlighted the strong job market as allowing the Fed to focus on inflation risks, which lean toward being higher.
Dollar ends the week stronger following inflation data and the Fed’s rate cut
The 10-year government bond yield (interpolated) on the previous trading day was 2.266, -0.25 bps. The benchmark government bond yield (LB346A) was 2.23, +0.0 bps. Meantime, the latest closed US 10-year bond yields was 4.52, -5.00 bps. USDTHB on the previous trading day closed around 34.57, moving in a range of 34.24 – 34.34 this morning. USDTHB could be closed between 34.15 – 34.45 today. The Dollar was heavily sold but still closed the week with significant gains following the hawkish FOMC meeting on Wednesday. Friday's highlight was the Core PCE release, which showed dovish data. As the holiday season approaches and market participants begin to wind down, thinner volumes could lead to increased volatility. G10 currencies generally strengthened, supported by the weaker dollar rather than specific currency news. The Japanese yen was the top performer, with USD/JPY dropping to 155.96 from an earlier high of 157.92. The euro traded between 1.0344 and 1.0444, while the British pound showed little reaction to weaker-than-expected retail sales.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
