- USDTHB: moving in the range 33.79-33.95 this morning, supportive level at 33.75 resistance level at 34.00
· SET Index: 1,673.3 (-0.00%), 4 Jan 2023
· S&P 500 Index: 3,853.0 (+0.75%), 4 Jan 2023
· Thai 10-year government bond yield (interpolated): 2.58 (-5.69 bps), 4 Jan 2023
· US 10-year treasury yield: 3.69 (-10.00 bps), 4 Jan 2023
- U.S. manufacturing sector contracts, prices decline in December
- Euro zone recession may not be as deep as expected
- China service sector activity shrinks for 4th straight month in December
- Oil prices rebound from new year tumble, U.S. inventories in focus
U.S. manufacturing sector contracts, prices decline in December U.S. manufacturing contracted further in December but weakening demand amid higher borrowing costs pushed a measure of prices paid by factories for inputs to the lowest level in more than 2-1/2 years, signaling that goods disinflation was underway. The Institute for Supply Management (ISM) said on Wednesday that its manufacturing PMI dropped to 48.4 last month from 49.0 in November, contracting for a second straight month. That was the weakest reading since May 2020, when the economy was slammed by the first wave of COVID-19 cases, and pushed the index just below the 48.7 level, which the ISM says is consistent with a recession in the broader economy. But with the labor market still pumping out jobs at a solid clip and sustaining consumer spending, it is unlikely that the economy is in recession. A PMI reading below 50 indicates contraction in manufacturing, which accounts for 11.3% of the U.S. economy.
Euro zone recession may not be as deep as expected Euro zone business activity contracted less than initially thought at the end of last year as price pressures eased, according to a survey which suggested the bloc’s recession may not be as deep as expected. S&P Global’s final composite Purchasing Managers’ Index (PMI) for the euro zone, seen as a good gauge of economic health, rose to 49.3 in December from November’s 47.8, above a preliminary estimate of 48.8. While the index has been below the 50-mark separating growth from contraction since July, December was a five-month high. The final data was compiled earlier than usual last month due to the holiday season. A December Reuters poll predicted the region’s economy contracted 0.3% last quarter and would do so by 0.4% this quarter. Overall demand declined for a sixth straight month, albeit at a shallower pace than initially thought. The PMI new business index bounced to 47.0 from 45.8, comfortably above the 46.5 flash estimate.
China service sector activity shrinks for 4th straight month in December China’s service sector shrank for a fourth straight month in December, a private survey showed on Tuesday, as an unprecedented spike in COVID-19 cases disrupted activity after the government eased several lockdown measures. The Caixin China General Services Business Activity Index read 48.0 in December, higher than last month’s reading of 46.7. A reading below 50 indicates contraction. The data, coupled with a reading on manufacturing activity earlier this week, and government data released last week, shows that overall Chinese business activity remained under pressure in December amid continued headwinds from the COVID-19 pandemic. China is now facing its worst, yet COVID-19 outbreak, which threatens to overwhelm the country’s healthcare infrastructure.
Oil prices rebound from new year tumble, U.S. inventories in focus The 10-year government bond yield (interpolated) on the previous trading day was 2.58, -5.69 bps. The benchmark government bond yield (LB31DA) was 2.68, -8.00 bps. LB31DA could be between 2.50-3.00. Meantime, the latest closed US 10-year bond yields was 3.69, -10.0 bps. USDTHB on the previous trading day closed around 34.23 Moving in a range of 33.79-33.95 this morning. USDTHB could be closed between 34.00-34.40 today. Oil prices rose on Thursday following a series of steep declines as investors looked to a potential slowdown in U.S. interest rate hikes, with focus now turning to weekly inventory data to gauge the strength of year-end oil consumption. Crude prices lost between 4% to 7% in the first two trading days of 2023, as rising COVID-19 cases in China and a warning on a potential recession from the International Monetary Fund drummed up fears of laggard demand in the coming months. But markets took some relief after the minutes of the Federal Reserve’s December meeting showed that policymakers unanimously support a slower pace of rate hikes in 2023. This portends lesser immediate pressure on economic activity from interest rate hikes.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
