- USDTHB: moving in the range 36.095-36.185 this morning supportive level at 36.05 resistance level at 36.35
· SET Index: 1,387.3 (+0.08%), 19 Feb 2024
· S&P 500 Index: 5,005.6(-0.48%), 16 Feb 2024
· Thai 10-year government bond yield (interpolated): 2.57 (-0.69 bps), 19 Feb 2024
· US 10-year treasury yield: 4.30 (+6.00 bps), 16 Feb 2024
- Fed signals 'patience' on rate cuts as data disappoints
- China cuts mortgage reference rate more than expected to revive property market
- Thai economy shrinks, adds to rate cut case amid central bank and PM feud
- Dollar ticks up as investors gauge rates outlook
Fed signals 'patience' on rate cuts as data disappoints A week of disappointing US economic data, including stronger-than-expected inflation and weakening spending, has Federal Reserve policymakers doubling down on their wait-and-see approach to interest rate cuts this year, but not discouraged. The latest bit of bad news came early on Friday in the form of a 0.5% month-on-month surge in January's producer price index excluding food and energy, potentially undoing some of what policymakers have called "remarkable" progress on inflation. That followed on reports earlier this week showing that consumer prices rose more than expected last month, even as a big drop in retail sales and a slide in factory production amid severe cold in some parts of the country raised questions about economic momentum.
China cuts mortgage reference rate more than expected to revive property market China cut the benchmark reference rate for mortgages at a monthly fixing by more than expected, as authorities ramped up efforts to stimulate credit demand and revive the property market. Commercial banks' improving net interest margins following recent deposit rate cuts and the reduction to bank reserves earlier this month has paved the way for lenders to reduce borrowing costs to support the economy. The five-year loan prime rate (LPR) was lowered by 25 basis points to 3.90% from 4.20% previously, while the one-year LPR was left unchanged at 3.45%. In a Reuters poll of 27 market watchers conducted this week, 25 expected a reduction to the five-year LPR. They projected a cut of five to 15 basis points.
Thai economy shrinks, adds to rate cut case amid central bank and PM feud Thailand's economy unexpectedly contracted in the fourth quarter of 2023 and policymakers downgraded the outlook for this year, adding to pressure on the central bank to give in to the prime minister's demands for a rate cut. Prime Minister Srettha Thavisin, who is also the finance minister, has been at loggerheads with the Bank of Thailand (BOT) over the direction of monetary policy, repeatedly saying rate cuts will help the economy he describes as being in crisis as it confronts high household debt and China's slowdown. Gross domestic product fell a seasonally adjusted 0.6% in the fourth quarter, National Economic and Social Development Council data showed on Monday, down from a revised 0.6% rise in the third quarter. The first quarterly contraction in a year compares with a 0.1% rise forecast in a Reuters poll. From a year earlier, GDP grew 1.7%, faster than revised 1.4% growth in the third quarter but slower than a forecast 2.5% expansion.
Dollar ticks up as investors gauge rates outlook The 10-year government bond yield (interpolated) on the previous trading day was 2.57, -0.69 bps. The benchmark government bond yield (LB31DA) was 2.58, -1.00 bps. Meantime, the latest closed US 10-year bond yields was 4.30, +6.00 bps. USDTHB on the previous trading day closed around 35.94 Moving in a range of 36.095-36.185 this morning. USDTHB could be closed between 36.05-36.35 today. The dollar inched higher after rising for the fifth week straight on the back of strong inflation data, while the yen traded near the psychologically important 150 level. US markets are closed for the Presidents' Day holiday, with trading volumes likely to be low throughout the day. The dollar index, which tracks the currency against six peers, was last up 0.13% at 104.35, after rising 0.18% the previous week. It rose to its highest since mid-November last Tuesday to 104.97 after figures showed US inflation came in stronger than expected in January, causing investors to dial down the number of interest rate cuts they expect from the Federal Reserve this year. But it slipped on Thursday after data showed retail sales fell last month.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
