- SET Index: 1,514.9 (-0.54%), 17 Feb 2020
- S&P 500 Index: 3,931.3 (-0.03%), 17 Feb 2020
- Thai 10-year government bond yield: 1.40 (+4.00 bps), 17 Feb 2020
- US 10-year treasury yield: 1.29% (-1.00 bps), 17 Feb 2020
- Fed minutes show willingness to steer past coming jump in inflation
- UK inflation rises to a 3-month high of 0.7%
- MPC wary of tourist dearth
- Dollar Gains; Yields Rise on Inflation Concerns
Fed minutes show willingness to steer past coming jump in inflation
Facing a still-scarred economy that may need an extended time to recover fully, Federal Reserve officials last month debated how to lay the groundwork for the public to accept higher inflation, and also the need to "stay vigilant" for signs of stress in buoyant asset markets, according to minutes of the U.S. central bank's Jan. 26-27 policy meeting. With a jump in some prices expected this spring, "many participants stressed the importance of distinguishing between such one-time changes in relative prices and changes in the underlying trend for inflation," according to the minutes. Fed officials determined to restore the job market and push inflation to 2% on a persistent basis.
UK inflation rises to a 3-month high of 0.7%
British inflation rose a little more than expected in January as the country went back into a coronavirus lockdown, pushed up by higher food prices and less discounting of household goods such as sofas, official data showed on Wednesday. Consumer prices rose 0.7% in annual terms after a 0.6% increase in December, the Office for National Statistics said. Inflation has been stuck below the Bank of England’s 2% target since mid-2019 and the coronavirus lockdowns pushed it close to zero last year as the economy tanked. Earlier this month, the BoE said it expects inflation to pick up quite sharply towards its 2% target in the spring as last year’s emergency cut in value-added tax expires and global oil prices rise on expectations of recovery.
MPC wary of tourist dearth
The lack of foreign tourist arrivals presents a major risk to Thailand's medium-term economic growth outlook, with a near-term recovery dependent on the resolution of the recent outbreak and fiscal support, says the Bank of Thailand. The recovery of foreign tourist arrivals could be influenced by many factors, including a plan to reopen the country, the status of the outbreak and the effectiveness of the vaccines. External factors that could affect the pace of border reopening include travel restrictions from China and virus mutations. The central bank anticipates foreign tourist arrivals of 5.5 million in 2021, but admits a lower projection is highly plausible. The economy is forecast to expand by 3.2% this year, but a lower GDP growth is likely on the back of increasing downside risks.
Dollar Gains; Yields Rise on Inflation Concerns
The benchmark government bond yield (LB29DA, 8.8 years) on the previous trading day was 1.40, +4.00 bps. Thai benchmark government bond yield (LB29DA) could be between 1.38-1.42. Meantime, the latest closed US 10-year bond yields was 1.29%, -1.00bps. USDTHB on the previous trading day closed around 29.99 Moving in a range from 29.96-30.02 this morning. USDTHB could be closed between 29.98-30.05 today. Meantime, The dollar advanced on Wednesday, hitting a four-month high against the yen as U.S. bond yields jumped on the prospects of further economic recovery and a possible acceleration in inflation.
Sources : Bloomberg, CNBC, Investing, CEIC
