- USDTHB: moving in the range 36.205-36.26 this morning supportive level at 36.15 resistance level at 36.45
· SET Index: 1,371.2 (-2.20%), 26 Oct 2023
· S&P 500 Index: 4,137.2 (-2.63%), 26 Oct 2023
· Thai 10-year government bond yield (interpolated): 3.35 (+2.30 bps), 26 Oct 2023
· US 10-year treasury yield: 4.86 (-9.00 bps), 26 Oct 2023
- U.S. economic growth exceeds expectations despite potential threats
- Mortgage rates in the U.S. hit seven-week surge
- Core inflation in Japan's capital unexpectedly accelerates, BOJ in spotlight
- Asia FX weakens, yen on intervention watch after breaching 150
U.S. economic growth exceeds expectations despite potential threats The U.S. economy experienced a robust 4.9% inflation-adjusted annual growth rate in Q3, exceeding economists' predictions of 4.7% and doubling the 2.1% growth seen in Q2. This notable performance is potentially at risk due to rising long-term interest rates, geopolitical conflicts in Ukraine and the Middle East, and the possibility of a U.S. government shutdown. Although this GDP growth was lower than the Atlanta FED GDPNOW's forecast of 5.3%, it is not expected to significantly impact the Federal Reserve's upcoming decisions. The Fed has maintained interest rates at a 22-year peak, providing policymakers an opportunity to evaluate the effects of their past rate hikes and recent events such as the sharp bond market sell-off.
Mortgage rates in the U.S. hit seven-week surge In a seven-week consecutive surge, U.S. mortgage rates have reached an average of 7.79% for a 30-year fixed loan, according to Freddie Mac. The increase coincides with a rise in 10-year Treasury yields, which have surpassed 5%, marking a 16-year high. The surge has resulted in discouraging potential homebuyers, leading to a shortage of resale listings and driving purchase loan applications to their lowest point since 1995. Despite this downturn, the National Association of Realtors reported an unexpected increase in contracts for previously owned homes in September. Builders have responded to these market conditions by offering discounted mortgage rates, propelling new home purchases to their fastest pace since early 2022.
Core inflation in Japan's capital unexpectedly accelerates, BOJ in spotlight Core consumer inflation in Japan's capital Tokyo, considered a leading indicator of nationwide trends, unexpectedly accelerated in October, a sign of broadening price pressures that may keep alive expectations of near-term end to ultra-low interest rates. The data reinforces expectations the Bank of Japan (BOJ) will revise up its inflation forecasts when it produces fresh quarterly projections at next week's policy meeting. The Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, rose 2.7% in October from a year earlier, exceeding market forecasts for a 2.5% gain. The increase, which was faster than a 2.5% gain in September, casts doubt on the central bank's view that inflation will slow in coming months as cost-push pressure dissipate. The so-called "core core" index that strips away both fresh food and fuel prices - closely watched by the BOJ as a gauge of broader price trends - rose 3.8% in October from a year earlier after a 3.9% increase in September, the data showed.
Asia FX weakens, yen on intervention watch after breaching 150 The 10-year government bond yield (interpolated) on the previous trading day was 3.35, +2.30 bps. The benchmark government bond yield (LB31DA) was 3.31,+0.00 bps. Meantime, the latest closed US 10-year bond yields was 4.86, -9.00 bps. USDTHB on the previous trading day closed around 36.34. Moving in a range of 36.205-36.26 this morning. USDTHB could be closed between 35.15-36.45 today. The dollar index and dollar index futures both rose 0.2% in Asian trade, hitting a near two-week high as markets hunkered down before a Federal Reserve meeting next week. While the central bank is widely expected to keep rates on hold, Fed officials have still left the door open for at least one more hike this year. Recent signs of resilience in the U.S. economy also give the Fed more headroom to keep rates higher for longer. The prospect of higher for longer U.S. rates weighed on most Asian currencies, given that it diminishes the appeal of risk-driven assets. Regional units were nursing steep losses for the year, following a sharp rise in U.S. rates. The yen broke past the key 150 level for the second time this month, ramping up bets that the Japanese government will intervene in currency markets to stem further weakness.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
