- USDTHB : moving in the range 32.08 – 32.18 this morning, THB largely appreciated against USD as large foreign inflow into Thai bond and stock market. Though, Fed hike may likely drive USDTHB up in medium term, supporting level of USDTHB is around 32.00, resistance level is around 32.20, 32.60
- SET Index: 1,711.6 (+0.59%), 17 Feb 2022
- S&P 500 Index: 4,380.3 (-2.14%), 17 Feb 2022
- Thai 10-year government bond yield (interpolated) : 2.20% (-1.00 bps), 17 Feb 2022
- US 10-year treasury yield: 1.97 (-6.00bps), 17 Feb 2022
- Morgan Stanley expects Fed to hike rates 6 times in 2022
- Fed's Mester: Rates should rise faster than after Great Recession
- Euro zone may have turned page on low inflation, ECB's Lane says
- Dollar Up, Yen Bid as Ukraine Tension Concerns Remain
Morgan Stanley expects Fed to hike rates 6 times in 2022
Morgan Stanley expects the U.S. Federal Reserve to raise interest rates six times this year for a total of 150 basis points, a faster increase than previously predicted. Major investment banks have been penciling in an increasingly strong run of interest rate hikes for 2022 after hotter-than-expected inflation data ramped up pressure on the Fed to take a firmer stand against soaring prices. The Fed is likely to hike rates by 25 basis points at the end of its March policy meeting, followed by additional 25 basis point hikes in May, June and July, with another two hikes in September and December, according to Morgan Stanley. Data last week showed U.S. consumer prices rose at their fastest pace since the early 1980s, fueling market speculation for a hefty 50-basis-point hike from the Fed's March 15-16 meeting.
Fed's Mester: Rates should rise faster than after Great Recession
The Federal Reserve will need to move more aggressively to remove accommodation than it did following the Great Recession by raising interest rates at a faster pace and shrinking its balance sheet more quickly, Fed Mester said on Thursday. Policymakers are expected to start raising interest rates from near zero levels when they meet next month and to begin reducing the Fed's nearly $9 trillion portfolio soon after. Officials are debating how quickly to raise interest rates to combat the highest inflation seen in decades. St. Louis Fed President Jim Bullard is calling on the Fed to raise rates by a full percentage point by July, while others favor a smaller increase to start. Mester said she would support removing accommodation at a faster pace in the second half of the year if inflation does not abate by mid-year, and at a slower rate if inflation comes down faster than expected.
Euro zone may have turned page on low inflation, ECB's Lane says
The ultra-low inflation seen in the euro zone until recently are unlikely to return even after the pandemic is over, the European Central Bank's chief economist Philip Lane said, citing changes in the global economy among other factors. Lane had dismissed the notion of a new era for inflation until recently but he has been revising his view, setting the stage for a policy shift at the ECB after nearly a decade of ultra-low interest rates and massive bond purchases. The ECB is under market pressure to raise rates on bank deposits, currently at minus 0.5%, in the face of stubbornly high euro zone inflation. This hit 5.1% in January, well over twice the ECB's 2% target. Lane said the pace of any policy change would depend on whether the ECB expected inflation to settle below, at or above 2%.
Dollar Up, Yen Bid as Ukraine Tension Concerns Remain
The 10-year government bond yield (interpolated) on the previous trading day was 2.20, -1.00 bps. The benchmark government bond yield (LB31DA) was 2.16, -3.00 bps. LB31DA could be between 2.14-2.18. Meantime, the latest closed US 10-year bond yields was 1.97%, -6.00bps. USDTHB on the previous trading day closed around 32.18 Moving in a range from 32.08-32.18 this morning. USDTHB could be closed between 32.10-32.20 today. Meantime, The dollar was up on Friday morning in Asia. However, the safe-haven yen gained more ground on the dollar after U.S. President Joe Biden accused Russia of preparing a pretext to justify a possible attack on Ukraine.
Sources : ttb analytics , Bloomberg, CNBC, Investing, CEIC
