- USDTHB : moving in the range 33.07 – 33.22 this morning, USDTHB at current level might be possible long entry. Hawkish Fed may likely continue to drive USDTHB in medium term, supporting level of USDTHB is around 33.00, 32.85
- SET Index: 1,643.4 (+0.27%), 26 Jan 2022
- S&P 500 Index: 4,349.9 (-0.15%), 26 Jan 2022
- Thai 10-year government bond yield (interpolated) : 2.14% +0.00 bps, 26 Jan 2022
- US 10-year treasury yield: 1.85 (+7.00bps), 26 Jan 2022
- Rate traders see risk of more than four U.S. Fed hikes this year after hawkish Powell
- Fed says bond maturity runoff will be main tool for shrinking balance sheet
- China's Dec industrial profits grow at slowest pace since April 2020
- Dollar climbs as Fed flags hikes
Rate traders see risk of more than four U.S. Fed hikes this year after hawkish Powell
Hawkish comments from Federal Reserve Chair Jerome Powell on Wednesday have led short-term interest rate traders to begin pricing for the possibility that the U.S. central bank could raise rates more than four times this year. The Fed signaled it is likely to raise U.S. interest rates in March and reaffirmed plans to end its bond purchases that month as well. Powell also repeatedly emphasized the economy's underlying strength and inflation's persistence, and refused to rule out more aggressive tightening as needed. Fed funds futures traders are now pricing for 4.4 hikes by December, after previously fully pricing for 4 increases. Powell’s hawkish bent also sent yields on short-and intermediate-dated Treasuries to two-year highs. Two-year yields rose to 1.16% while five-year yields increased to 1.70%.
Fed says bond maturity runoff will be main tool for shrinking balance sheet
The Federal Reserve said on Wednesday it will rely primarily on letting bond holdings run off the balance sheet as they mature as it grapples with persistent inflation, rather than selling bonds outright, which analysts say reduces the chances of near-term asset sales. Fed officials also said they expect they will begin reducing the central bank's balance sheet after they start raising interest rates. The comments may reduce some market concerns that asset sales by the U.S. central bank could saturate the market and send bond yields sharply higher, at least in the short term. The Fed also said it intends to hold mainly Treasury securities in the longer run, that could mean that the Fed lets its holdings of MBS run off at a faster pace than Treasuries.
China's Dec industrial profits grow at slowest pace since April 2020
Profits at China's industrial firms grew at a slower pace in December, as factory-gate inflation continued to ease, pointing to cooling demand amid mounting economic challenges. Profits rose 4.2% year-on-year, the slowest rate since April 2020, compared with a 9% gain in November. For 2021, industrial firms' profits rose by a whopping 34.3% year-on-year to 8.7 trillion yuan, the National Bureau of Statistics said. "In 2021, the profits of industrial enterprises achieved relatively fast growth, with corporate efficiency steadily improving," Zhu Hong, a senior NBS statistician said. "However, we must acknowledge that growth rates dropped significantly in November and December and that downstream firms, especially small firms,” Zhu said.
Dollar climbs as Fed flags hikes
The 10-year government bond yield (interpolated) on the previous trading day was 2.14, +0.00 bps. The benchmark government bond yield (LB31DA) was 2.12, -1.00 bps. LB31DA could be between 2.10-2.16. Meantime, the latest closed US 10-year bond yields was 1.85%, +7.00bps. USDTHB on the previous trading day closed around 32.95 Moving in a range from 33.07-33.22 this morning. USDTHB could be closed between 33.12-33.22 today. Meantime, The dollar hit multi-week highs against other major currencies on Thursday, bolstered after Federal Reserve chair Jerome Powell primed investors for U.S. rate hikes beginning in March.
Sources : ttb analytics , Bloomberg, CNBC, Investing, CEIC
