- SET Index: 1,486.3 (+0.55%), 2 Feb 2020
- S&P 500 Index: 3826.3 (+1.39%), 2 Feb 2020
- Thai 10-year government bond yield: 1.23 (+2.50 bps), 2 Feb 2020
- US 10-year treasury yield: 1.12% (+3.00 bps), 2 Feb 2020
- Low U.S. short-term rates likely a fixture in 2021 amid excess cash
- EU proposes production investment to remedy vaccine shortages
- Britain sketches out post-Brexit state aid scheme
- Euro US Dollar Exchange Rate Tumbles despite Forecast-Beating Eurozone GDP
Low U.S. short-term rates likely a fixture in 2021 amid excess cash
Excess liquidity in the short-term U.S. lending market recently knocked overnight interest rates to almost zero, and risks pushing the federal funds rate to negative territory, a scenario that could cause disruptions in money markets. A sub-zero effective fed funds rate would indicate the market expects the Fed to take interest rates below zero. Analysts said if the fed funds rate falls below 0.05% for consecutive sessions, a Fed response is likely to follow. Short-term rates as measured by the U.S. overnight repurchase agreement or repo rates and the secured overnight financing rate (SOFR) both recovered on Tuesday, rising to 0.10%, from 0.03% last week, the lowest since May 2020.
EU proposes production investment to remedy vaccine shortages
The European Commission is proposing to speed up the production of COVID-19 vaccines by helping to upgrade existing pharmaceutical plants or build new ones. "The Commission should deploy all means necessary to meet Europe's needs, be it through additional investing in upgrading or repurposing existing plants or building new ones," the joint letter to EU leaders said. It added that the newly agreed EU budget, which together with a recovery fund totals 1.8 trillion euros ($2.2 trillion), should be used to best effect. The Commission, the letter said, should talk with industry not only to address the supply of vaccines but also other products such as tests and treatments.
Britain sketches out post-Brexit state aid scheme
Britain wants to establish a more flexible system of subsidy rules than those in place when it was a member of the European Union, business minister Kwasi Kwarteng said on Wednesday. Having left the EU fully in January, Britain is reshaping its economy and fought hard in negotiations with Brussels for the right to set its own state aid rules - albeit with agreed limitations. Kwarteng said the new subsidy rules would make Britain more attractive to investors while staying within the terms of the EU exit agreement and avoiding a return to 1970s policies of supporting unprofitable industries.
Euro US Dollar Exchange Rate Tumbles despite Forecast-Beating Eurozone GDP
The benchmark government bond yield (LB29DA, 9.0 years) on the previous trading day was 1.23, +2.50 bps. Thai benchmark government bond yield (LB29DA, 9.0 years) could be between 1.21-1.25. Meantime, the latest closed US 10-year bond yields was 1.12%, +3.00bps. USDTHB on the previous trading day closed around 29.97 Moving in a range from 29.97-30.02 this morning. USDTHB could be between 29.97-30.04 today. Meantime, Investors continued to sell the Euro US Dollar (EUR/USD) exchange rate today.
Sources : Bloomberg, CNBC, Investing, CEIC
