- USDTHB: moving in the range 34.72-34.77 this morning supportive level at 34.55 resistance level at 34.85
- SET Index: 1,368.0 (+0.37%), 10 Jan 2025
- S&P 500 Index: 5,827.0 (-1.55%), 10 Jan 2025
- Thai 10-year government bond yield (interpolated): 2.354 (+1.02 bps), 10 Jan 2025
- US 10-year treasury yield: 4.77 (+9.0 bps), 10 Jan 2025
- Strong US jobs report backs case for pause in Fed rate cuts
- Michigan consumer sentiment index drops below expectations
- BOJ may raise inflation forecast due to rice prices and weak yen
- US intensifies pressure on Russia with new energy sanctions
- US dollar rises as strong jobs data backs Fed’s rate cut pause
Strong US jobs report backs case for pause in Fed rate cuts
The latest US labor market data confirms that interest rate cuts are on hold for now. Nonfarm payrolls rose by 256,000 in December, the highest since March, while the unemployment rate unexpectedly dropped to 4.1%, and hourly earnings increased by 0.3%. Despite high borrowing costs and inflation, the labor market had a strong year, adding 2.2 million jobs in 2024, slightly fewer than in 2023 but more than in 2019. December's gains were led by healthcare, retail, and leisure, while manufacturing saw job losses for the fourth time in five months.
Michigan consumer sentiment index drops below expectations
The preliminary January UoM sentiment dropped to 73.2 from 74.0, slightly below the expected 73.8. Current conditions rose to 77.9 from 75.1, while future expectations declined to 70.2 from 73.3. Inflation expectations for both the 1-year and 5–10-year outlooks increased to 3.3% from 2.8% and 3.0%, respectively, with the 5–10-year forecast reaching its highest level since 2008. The report noted that inflation expectations rose across demographic groups, particularly among lower-income consumers and Independents, driven by concerns over potential tariffs under the incoming Trump administration.
BOJ may raise inflation forecast due to rice prices and weak yen
Bank of Japan officials are likely to discuss raising their inflation outlook at a policy meeting later this month, though no rate decision has been made yet. They may upgrade projections for inflation excluding food and energy, driven by rising rice costs and a weakening yen. The BOJ currently forecasts 2% inflation this fiscal year, 1.9% next year, and 2.1% in the following year. Any upgrades would bring forecasts to or above 2%, potentially supporting a rate hike.
US intensifies pressure on Russia with new energy sanctions
The US imposed its toughest sanctions yet on Russia’s oil industry, targeting firms handling a quarter of its seaborne oil exports, key insurers, and traders. The measures, aimed at boosting Ukraine’s leverage ahead of potential peace talks after Trump’s return to office, also expanded restrictions on disruptive tankers. These actions go beyond previous sanctions aimed at weakening Russia’s war efforts. While Trump could lift them, it may be politically difficult due to bipartisan support for Ukraine.
US dollar rises as strong jobs data backs Fed’s rate cut pause
The 10-year government bond yield (interpolated) on the previous trading day was 2.354, +1.02 bps. The benchmark government bond yield (LB346A) was 2.34, +1.0 bps. Meantime, the latest closed US 10-year bond yields was 4.77, +9.0 bps. USDTHB on the previous trading day closed around 34.60, moving in a range of 34.72 – 34.77 this morning. USDTHB could be closed between 34.55 – 34.85 today. The dollar strengthened notably to end the week, reaching a high of 109.97 compared to 109.12 before the US jobs report. The data prompted a broad hawkish reaction, leading to declines in treasuries, US equity futures, and a significant shift in Fed money market expectations. G10 currencies generally weakened due to dollar strength and a risk-off sentiment following the jobs report. The Japanese yen outperformed in risk-averse trading, with USD/JPY dropping to 157.23 from an earlier peak of 158.87. Before the US data, the yen gained strength in the European morning, amid reports that the BoJ is considering adjusting its rate decision and inflation forecasts for FY24 and FY25.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
