- USDTHB: moving in the range 36.84-36.95 this morning supportive level at 36.70 resistance level at 37.00
· SET Index: 1,431.7 (-0.47%), 9 Oct 2023
· S&P 500 Index: 4,335.7 (+1.80%), 9 Oct 2023
· Thai 10-year government bond yield (interpolated): 3.38 (+1.67 bps), 9 Oct 2023
· US 10-year treasury yield: 4.78 (+6.00 bps), 6 Oct 2023
- Rising treasury futures amid inflation warnings and Middle East conflict
- Central banks anticipate rate cuts in 2024 amid controlled inflation
- German industrial output falls in August, spurring recession fears
- Dollar gains versus euro as Israel-Palestinian conflict spurs safety bid
Rising treasury futures amid inflation warnings and Middle East conflict Federal Reserve Vice Chair Philip Jefferson warned of persistent inflation upside risks and a potential sharper-than-expected economic deceleration. Despite these cautionary statements, Treasury futures and cross assets, including WTI crude prices (up 3.75 at 86.54) and SPX Eminis (up 18.0 at 4359.5), saw an upward trajectory. The rise in oil, gas, and defense stocks can be attributed to the surprise attack by Hamas on Israel. This unexpected geopolitical event has driven up oil prices, favoring companies like Marathon Oil and Halliburton as well as Brent crude and US oil, which rose to $86.38 per barrel. Barclays analyst Amarpreet Singh suggests that the conflict might slow down Iranian oil exports, further impacting global oil markets.
Central banks anticipate rate cuts in 2024 amid controlled inflation The Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BoE), Bank of Japan (BoJ), National Bank of Hungary (NBH), Czech National Bank (CNB), National Bank of Poland (NBP), and National Bank of Romania (NBR) are expected to halt further rate hikes and initiate rate cuts in 2024. This move is in response to controlled inflation, as indicated by the core personal consumer expenditure deflator, and stable labor markets that are awaiting Spring Wage settlement outcomes. The ECB's decisions could be swayed by a surge in oil prices and its credibility in fighting inflation. Concurrently, the BoE is considering the projected rise in the average rate on outstanding mortgage debt from 3% to over 4%. Meanwhile, the BoJ is contemplating adjustments to its Yield Curve Control (YCC) policy.
German industrial output falls in August, spurring recession fears German industrial output shrank in August for the fourth consecutive month, an indication that the sector remains under serious pressure, stoking recession fears. Industrial production fell slightly more than expected in August by 0.2% compared to the previous month. Analysts polled by Reuters had predicted a 0.1% decline. The further drop in German industrial production in August was better than it looked as it was driven by volatile components, said Franziska Palmas, senior Europe economist at Capital Economics. However, she continued to expect high interest rates and falling demand to lead to a further contraction in German industrial output in the coming months. The statistics office revised July production data to a 0.6% decline month-on-month, compared with a provisional figure of a 0.8% drop.
Dollar gains versus euro as Israel-Palestinian conflict spurs safety bid The 10-year government bond yield (interpolated) on the previous trading day was 3.38, +1.67 bps. The benchmark government bond yield (LB31DA) was 3.33, +4.00 bps. Meantime, the latest closed US 10-year bond yields was 4.78, +6.00 bps. USDTHB on the previous trading day closed around 37.09. Moving in a range of 36.84-36.95 this morning. USDTHB could be closed between 36.70-37.00 today. The safe-haven dollar rose against the euro as military clashes between Israel and the Palestinian Islamist group Hamas raised concerns that the conflict might widen beyond Gaza, but the dollar eased against other major currencies. Israel's response to the multi-pronged attack by Palestinian gunmen from the Gaza Strip will "change the Middle East," Prime Minister Benjamin Netanyahu said. Risk sentiment was fragile as Israel said it had called up 300,000 reservists and was imposing a total blockade of the Gaza Strip in a sign of a potential ground assault in response to the weekend attack by Hamas. The Israeli shekel weakened about 3.1% to 3.9550 per dollar after the Bank of Israel announced it would sell up to $30 billion of foreign currency in the open market to maintain stability. Earlier, the shekel tumbled to an almost eight-year low of 3.9880 per dollar.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
