- USDTHB : moving in the range 34.04-34.10 this morning, supporting level of USDTHB is around 33.95 resistance level is around 34.08
- SET Index: 1,652.3 (-0.91%), 3 May 2022
- S&P 500 Index: 4,300.2 (+2.94%), 4 May 2022
- Thai 10-year government bond yield (interpolated) : 2.97% (+12.70 bps), 3 May 2022
- US 10-year treasury yield: 2.93 (-4.00 bps), 4 May 2022
- Fed lifts rates by half point, starts balance sheet reduction June 1
- Bank of England set for 4th straight rate hike to fight inflation
- China's services activity shrink the most in 26 months
- US Futures ease after Post-Fed relief rally
Fed lifts rates by half point, starts balance sheet reduction June 1 The Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, setting its target federal funds rate to a range between 0.75% and 1% in a unanimous decision. Fed Chair Jerome Powell also said policymakers were ready to approve half-percentage-point rate hikes at upcoming policy meetings in June and July. However, the inflation battle might be unpleasant as the Fed force Americans to pay more for home mortgages and auto loans, and possibly dent asset values. Next month, it would start to reduce the roughly $9 trillion stash of assets accumulated to bring inflation under control as well. Still, Powell said he felt the U.S. economy is performing well, and strong enough to withstand the coming rate increases without being driven into recession or even seeing a significant rise in unemployment.
Bank of England set for 4th straight rate hike to fight inflation The Bank of England looks poised to raise interest rates on Thursday for the fourth time since December, from 0.75% to 1%. But the BoE must tread carefully to avoid a recession, even with inflation at 7% - more than three times its target - and still expected to rise to 10% in April. Investors on Wednesday priced in a less than one-in-three chance of a Fed-style, half-percentage-point hike by the BoE. However, the BoE must balance fast inflation with slowdown worries. This is as showed by sterling languishing around a 21-month low against the dollar on worries about the British economic outlook. Signs of a slowdown - and even a possible recession - are mounting with consumer confidence close to a record low and retail sales falling two months as the cost-of-living tightens. Like the Fed, the BoE is expected to start selling down the huge stockpile of bonds, which have been bought since the global financial crisis over a decade ago, as another way to tackle inflation.
China's services activity shrink the most in 26 months China's services PMI sank to 36.3 in April 2022 from 42.0 in March, being the second straight month of contraction amid ongoing tighter COVID19 containment measures and the sharpest fall in the sector since the onset of the pandemic in February 2020. Meantime export sales fall in the most in 2 years and employment shrank for the fourth month running. On inflation, input costs rose due to greater costs for raw materials, fuel and spending on pandemic-protection measures. Meanwhile, output costs fell for the first time in 8 months, amid efforts by some firms to attract new clients by lowering fees. Finally, confidence improved slightly, on optimism that outbreaks would be brought under control.
US Futures ease after Post-Fed relief rally The 10-year government bond yield (interpolated) on the previous trading day was 2.97, +12.70 bps. The benchmark government bond yield (LB31DA) was 2.90, +20.0 bps. LB31DA could be between 2.85-2.95. Meantime, the latest closed US 10-year bond yields was 2.93%, -4.00 bps. USDTHB on the previous trading day closed around 34.46, moving in a range from 34.04-34.10 this morning. USDTHB could be closed between 33.95-34.08 today. The relief in stock market came as the Fed increased its benchmark interest rate by 50 basis points as widely expected and said to reduce its balance sheet in June. Powell also clarified that the Fed is not actively considering a larger 75 basis point rate hike, boosting investor sentiment further.
