- USDTHB: moving in the range 33.77-33.83 this morning supportive level at 33.65 resistance level at 33.90
- SET Index: 1,470.3 (-1.25%), 22 Oct 2024
- S&P 500 Index: 5,797.4 (-0.92%), 23 Oct 2024
- Thai 10-year government bond yield (interpolated): 2.416 (+2.61 bps), 22 Oct 2024
- US 10-year treasury yield: 4.24 (+4.00 bps), 23 Oct 2024
- U.S. existing home sales hit a 14-year low, with prices still high
- Bank of Canada cuts rates by 50 basis points
- BOJ chief states that reaching the inflation target is "still taking time"
- Thai central bank chief signals high threshold for further rate cuts
- Dollar's rally continues, reaching a three-month high against the yen
U.S. existing home sales hit a 14-year low, with prices still high
U.S. existing home sales fell to a 14-year low in September, driven by rising mortgage rates and home prices. This marks the second consecutive monthly decline, signaling a worsening downturn in residential investment, including homebuilding. Sales dropped 1% to 3.84 million, slightly below the expected 3.86 million. The inventory of homes for sale increased to a 4.3-month supply, up from 4.2 months in August, with a year-over-year supply increase of 23%. Despite the rise in inventory, entry-level homes remain scarce, keeping prices unaffordable for many first-time buyers.
Bank of Canada cuts rates by 50 basis points
On Wednesday, the Bank of Canada cut its key benchmark rate by 50 basis points to 3.75%, its first major move in over four years, indicating a return to low inflation. After raising rates to a 20-year high to combat inflation, the bank has now reduced rates four times since June. With inflation at 1.6% in September, below the 2% target, demand remains weak, business sales sluggish, and consumer sentiment low, affecting economic growth. Analysts now see the possibility of another significant cut in December.
BOJ chief states that reaching the inflation target is "still taking time"
Bank of Japan Governor Kazuo Ueda stated on Wednesday that achieving the 2% inflation target is "still taking time," indicating a cautious approach to raising near-zero interest rates. He warned that delaying rate hikes could lead to a yen depreciation, increasing import costs. Ueda affirmed that the bank will continue to raise rates if the economy meets forecasts but highlighted the need to consider global uncertainties, including the U.S. economic outlook, in timing the next hike.
Thai central bank chief signals high threshold for further rate cuts
Thailand’s central bank chief, Sethaput Suthiwartnarueput, stated that policymakers are not rushing to react to last week’s interest-rate cut. Future decisions will be based on forecasts for inflation, economic growth, and financial stability. In addition, he defended the current inflation target despite government pressure to ease policy and raise the price goal. The BOT governor emphasized the advantages of the 1%-3% inflation band for stabilizing price expectations and enabling moderate tightening, even as neighboring countries raised their rates. He warned that increasing the band could heighten expectations, resulting in higher living costs and bond yields.
Dollar's rally continues, reaching a three-month high against the yen
The 10-year government bond yield (interpolated) on the previous trading day was 2.416, 2.61 bps. The benchmark government bond yield (LB346A) was 2.41, +3.0 bps. Meantime, the latest closed US 10-year bond yields was 4.24, +4.0 bps. USDTHB on the previous trading day closed around 33.51 moving in a range of 33.77 – 33.83 this morning. USDTHB could be closed between 33.65 – 33.90 today. The dollar continued to rise, with the index briefly surpassing 104.50, boosted by the yen's underperformance and higher U.S. yields. The euro dipped below 1.0800 against the stronger dollar but recovered slightly from its lowest levels. The Japanese yen lagged as USD/JPY briefly rose above 153.00, influenced by stronger U.S. yields and the upcoming election in Japan.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
