- USDTHB: moving in the range 32.94-32.95 this morning supportive level at 32.80 resistance level at 33.10
- SET Index: 1,451.7 (-0.22%), 20 Sep 2024
- S&P 500 Index: 5,702.6 (-0.2%), 20 Sep 2024
- Thai 10-year government bond yield (interpolated): 2.469 (-3.77 bps), 20 Sep 2024
- US 10-year treasury yield: 3.73 (+0.00 bps), 20 Sep 2024
- BOJ holds rates steady, Ueda cools speculation about further hikes
- Fed’s Waller says slowing inflation led him to support large rate cut
- UK retail sales soar in August despite political and fiscal concerns
- The dollar fell in volatile trading after the Fed's major rate cut
BOJ holds rates steady, Ueda cools speculation about further hikes
The Bank of Japan (BoJ) maintained its short-term policy rate at 0.25% unanimously, as expected. They forecast that inflation will meet their target in the latter half of their three-year projection through fiscal 2026, with rising medium- and long-term inflation expectations. The BoJ also highlighted that exchange rate fluctuations are increasingly impacting prices and noted Japan’s economy is likely to grow above potential, though caution is needed regarding financial market effects. In a dovish post-meeting press conference, Governor Ueda emphasized the significance of global economies, particularly the US after the Federal Reserve's 50 basis point rate cut. He stated that recent FX movements have lowered upside price risks and reiterated concerns about market instability, aligning with Deputy Governor Uchida’s earlier comments. This has led to speculation that plans for rate hikes are now slowing.
Fed’s Waller says slowing inflation led him to support large rate cut
Fed Governor Waller explained his support for a 50 basis point rate cut in September, noting that his prior speech had left the option open for either 25 or 50 basis points. He attributed his decision to the August inflation data, which showed core inflation below the Fed's target. Specifically, he mentioned that core PCE rose by 0.14% in August, indicating an annualized rate of less than 1.8%, below the 2% target. Waller emphasized that future rate cuts will depend on various factors, maintaining a data-driven approach. He suggested that a stable data outlook could lead to a 25 basis point cut in upcoming meetings, but larger cuts might be considered if the labor market worsens, or inflation weakens. He also mentioned the possibility of pausing rate changes based on the data.
UK retail sales soar in August despite political and fiscal concerns
UK retail sales rose in August, as consumers took advantage of sunny weather and summer discounts, despite growing political and fiscal concerns. The Office for National Statistics reported a 1.0% increase in the volume of goods sold, exceeding economists' expectations of 0.4% and following a revised 0.7% increase in July. This suggests British consumers remained optimistic, even amid anti-immigrant riots and warnings from Prime Minister Keir Starmer about tough fiscal choices. However, separate GfK data showed consumer confidence turned negative in September, linked to concerns over the Labour government's tax and spending plans.
The dollar fell in volatile trading after the Fed's major rate cut
The 10-year government bond yield (interpolated) on the previous trading day was 2.469, -3.77 bps. The benchmark government bond yield (LB346A) was 2.465, -3.0 bps. Meantime, the latest closed US 10-year bond yields was 3.73, +0.00 bps. USDTHB on the previous trading day closed around 33.08 moving in a range of 32.94 – 32.95 this morning. USDTHB could be closed between 32.80 – 33.10 today. The dollar saw slight selling overnight due to Yen strength but gained momentum as the Yen weakened. However, following Waller's comments, the dollar weakened again, stabilizing the dollar index. The Euro remained steady, showing little reaction to the stronger-than-expected EZ Consumer Confidence Flash for September, closing around 1.1160. The Yen initially reacted erratically to the BoJ's decision to maintain its 0.25% rate but weakened after Governor Ueda expressed reluctance to raise rates. By the session's end, USD/JPY was above 143, down from a high of 144.49.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
