- USDTHB: moving in the range 33.47-33.52 this morning supportive level at 33.35 resistance level at 33.65
- SET Index: 1,488.7 (-0.07%), 21 Oct 2024
- S&P 500 Index: 5,854.0 (-0.18%), 21 Oct 2024
- Thai 10-year government bond yield (interpolated): 2.390 (-2.54 bps), 21 Oct 2024
- US 10-year treasury yield: 4.19 (+11.00 bps), 21 Oct 2024
- Three Fed policymakers favor more rate cuts, but differ on pace
- German producer prices declined more than anticipated in September
- China reduced its loan prime rate by a bit more than anticipated
- The dollar maintains its strength due to confidence in Trump
Three Fed policymakers favor more rate cuts, but differ on pace
On Monday, three Federal Reserve policymakers expressed their support for gradual interest-rate cuts in the U.S., citing the economy's strength and an uncertain outlook. Fed's Logan reiterated her expectation for gradual cuts if the economy meets forecasts, highlighting the importance of flexibility in monetary policy. Fed's Kashkari noted that an increase in the budget deficit could lead to higher interest rates, emphasizing that inflation isn't driven by the labor market and that immigration policy will affect their evaluation. He mentioned the 50bps cut in September was in response to a weakening labor market, but the labor market's resilience raises questions about whether the neutral rate is higher. Finally, Fed's Daly stated she anticipates the central bank will continue lowering rates to protect against further labor market weakening.
German producer prices declined more than anticipated in September
German producer prices dropped more than anticipated in September, falling 1.4% year-on-year, primarily due to a significant decline in energy prices. Analysts had forecasted a 1.0% decrease. The main factor behind the drop was a 6.6% reduction in energy prices compared to September of the previous year, with mineral oil products seeing a notable decrease of 14.4%. When excluding energy costs, producer prices rose by 1.2%, driven by increased prices for capital, consumer, and intermediate goods.
China reduced its loan prime rate by a bit more than anticipated
On Monday, the People's Bank of China unexpectedly lowered its benchmark loan prime rate by more than anticipated, as part of a series of initiatives aimed at boosting economic growth. The one-year LPR was reduced to 3.10% from 3.35%, surpassing expectations of a drop to 3.15%. Meanwhile, the five-year LPR, which affects mortgage rates, fell to 3.60% from 3.85%, compared to forecasts of a decrease to 3.65%. This was the PBOC's first rate cut since July.
The dollar maintains its strength due to confidence in Trump
The 10-year government bond yield (interpolated) on the previous trading day was 2.390, -2.54 bps. The benchmark government bond yield (LB346A) was 2.38, -2.0 bps. Meantime, the latest closed US 10-year bond yields was 4.19, +11.0 bps. USDTHB on the previous trading day closed around 33.27 moving in a range of 33.47 – 33.52 this morning. USDTHB could be closed between 33.35 – 33.65 today. The dollar index's rally in October continued on Monday, driven by rising tensions in the Middle East and the ongoing Trump trade, which were further supported by higher yields across the curve and a stronger crude market. The euro's downward trend persisted, weakening against the dollar and staying just above monthly lows. There was little news affecting the euro, and cooler-than-expected PPI data did not elicit a response. The Japanese yen began the week as the weakest G10 currency, with rising U.S. yields and the Trump trade pushing USD/JPY to a high of 150.80. Attention will turn to the yen over the weekend due to the Japanese general election on Sunday.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
