- USDTHB: moving in the range 36.42-36.54 this morning supportive level at 36.35 resistance level at 36.60
· SET Index: 1,434.5 (+0.19%), 10 Oct 2023
· S&P 500 Index: 4,358.2 (+1.15%), 10 Oct 2023
· Thai 10-year government bond yield (interpolated): 3.36 (-1.80 bps), 10 Oct 2023
· US 10-year treasury yield: 4.66 (-12.00 bps), 10 Oct 2023
- Asia stocks hit 2-week high as Fed talk turns dovish
- Rising Borrowing Costs Strain Households in the UK and US
- Drop in euro zone investor mood slows in October
- Dollar index weakens amid stock market rally and dovish Fed stance
Asia stocks hit 2-week high as Fed talk turns dovish Asia's stock markets rose, and the dollar beat a retreat as a dovish shift in tone from Federal Reserve officials had traders paring U.S. interest rate expectations, though with a wary eye on U.S. inflation data due on Thursday. The S&P 500 gained overnight and MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.3% to a two-week high in morning trade. Japan's Nikkei rose 0.5%. The remark follows several Fed officials noting that recent rises in longer-term yields may help do the work of tightening financial conditions and crimping inflation, leaving the central bank with less to do in terms of short-term rate levels. Wagers on whether the Fed might hike again this year have pulled back a bit this week and Treasury yields have come sharply down from 16-year highs, yanking the dollar with them.
Rising Borrowing Costs Strain Households in the UK and US Financial Policy Summary from the Bank of England has warned of impending financial hardships as households grapple with increased borrowing costs. The warning comes amidst 14 consecutive interest rate hikes that have pushed the current rate to 5.25%. Households are allocating more of their income towards clearing debts such as credit card bills, a trend that is expected to continue. Despite consumer debt still being below its 2007 peak, high-interest rates have led to a significant increase in long-term mortgages (30 years or more) from 4% to 12% within just two years. Consequently, there has been a modest rise in arrears, although still low historically. The report also reveals that the poorest individuals, predominantly renters who represent the majority of the UK population as per Sky News analysis, are increasingly depending on credit cards for daily expenses.
Drop in euro zone investor mood slows in October Investor morale in the euro zone fell less than expected at the start of October, with Germany's economic weakness continuing to drag on the region but expectations rising slightly. Sentix's index for the euro zone declined to -21.9 points in October from -21.5 in September, better than the -22.8 estimated in a Reuters poll of analysts. The subindex for future expectations in the euro zone rose to -16.8 points, from -21.0 in the previous month, recording its highest level since April. The current situation index declined to -27.0 points, its lowest level since November 2022, from -22.0.
Dollar index weakens amid stock market rally and dovish Fed stance The 10-year government bond yield (interpolated) on the previous trading day was 3.36, -1.80 bps. The benchmark government bond yield (LB31DA) was 3.37,-3.00 bps. Meantime, the latest closed US 10-year bond yields was 4.66, -12.00 bps. USDTHB on the previous trading day closed around 36.89. Moving in a range of 36.42-36.54 this morning. USDTHB could be closed between 36.35-36.60 today. The dollar index fell by 0.23%, influenced by a stock market rally and Atlanta Fed President Bostic's dovish stance on further interest rate hikes. This drop comes despite some safe-haven demand spurred by Middle East turmoil. Bostic expressed that the current policy rate is adequate to bring inflation down to 2%. In contrast, the EUR/USD rose by 0.24% on Tuesday. This increase was triggered by the dollar's weakness, hawkish signals from ECB's Holzmann about potential interest rate hikes following supply shocks, and an unexpected increase in Italy's industrial production. The USD/JPY also saw an increase of 0.13% on Tuesday as the yen weakened due to reduced safe-haven demand after a substantial rally in the Nikkei Stock Index, coupled with a decline in Japanese government bond yields. Meanwhile, gold and silver prices rose for the third consecutive day, driven by factors such as a weaker dollar, dovish comments from Bostic, and a decrease in the 10-year T-note yield.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
