2023-05-29 01:15:00
Mr. Poon Panichphiboon, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank Look at the baht frame this week at 34.40-35.00 baht / dollar, and today’s baht frame is expected to be at 34.65-34.85 baht / dollar from the opening level this morning (May 29) at 34.77 baht / dollar. During the past Friday night The baht moved weaker in line with the dollar’s appreciation and gold buying in a downturn. However, the baht still failed to break through the key resistance zone around 34.80 baht/dollar. We expect that this level may see some players taking profit on short THB positions.
for the trend of the baht We estimate that The main factor is still the direction of the dollar and gold prices. We believe that there is an opportunity for foreign investors to return to buy Thai bonds following the MPC meeting results are heard, while buying pressure for Thai stocks may not be evident until domestic political risks subside. The value broke the resistance zone of 34.80 baht per dollar. May depreciate quickly to the zone of 35.00 baht per dollar
in the dollar part We see that the dollar has a chance to strengthen further. After the recent negotiations to expand the US debt ceiling May succeed ahead of schedule. In addition, the direction of the dollar will depend on the release of important US economic data. Non-farm payrolls and wage growth, but the upside to the dollar may not be huge. After market players had expected the Fed to continue to raise interest rates moderately.
last week The US dollar continued to strengthen in demand for safe-haven assets and market participants were expecting the Fed to continue raising interest rates this week. We should keep an eye on important US economic data. particularly the labor market data and wait for the results of the Monetary Policy Committee meeting. (MPC), in which the interesting economic data reports are as follows:
global economic outlook
▪ US side – Key highlights of the US economic data report. will be at the labor market data report The market sees that the number of job openings (JOLTs Job Openings) may still reflect that. US labor market still tight (The number of job openings is slightly higher than the number of unemployed.) Non-farm payrolls in May may drop to 180,000 from over 250,000 in the previous month. Reflecting the adjustment of the employment plan of the private sector. Especially in the manufacturing sector that has been affected by rising interest rates. High cost of production and economic slowdown But overall employment in the service sector may remain good. This is in line with the continuous expansion of the service sector. In addition, market players will pay attention to Average Hourly Earnings, if wages continue to grow by +0.4%m/m or Not less than 4.4%y/y may still be a factor supporting inflation to slow down. And encourage the Fed to continue to use tight monetary policy. Market players will wait to assess the Fed’s monetary policy outlook through statements from Fed officials. Incidentally, US political factors. will be another important factor that can affect the atmosphere in the financial market After the US government and the President of the House of Representatives from the Republican Party May reach an agreement to negotiate to expand the debt ceiling (Debt Ceiling), which must wait and see whether Congress will approve the draft agreement or not.
▪ Europe – The market believes that the European Central Bank (ECB) may need to continue to raise interest rates. If Eurozone headline inflation in May, the Eurozone CPI remains stable at 7.00% (core CPI inflation may be at 5.6%), recent market players view the ECB as having a chance to move forward with the policy rate hike (Deposit Facility). rate) continuously until reaching 3.75% this year (latest at 3.25%)
▪ Asia – The market expects that the Vietnamese economy will continue to recover. This is supported by domestic consumption driven by the recovery of the tourism sector. This will be reflected through retail sales (Retail Sales) in May that may grow +11%y/y, similarly to Japan. Retail sales in April may expand by +5.8%y/y, in line with the continued rise in the Japanese Household Confidence Index. Market players will keep an eye on May’s Manufacturing and Services PMI reports. by the market that China’s economy will continue to be supported by continued expansion in the services sector, with the Services PMI likely to be at 55 (albeit at a slower pace from the previous month), while the industrial manufacturing sector will remain at 55 points. China’s manufacturing PMI may continue to contract at 49.4 points. A worse-than-expected China PMI report may pressure market players to reduce their holdings of Chinese and Hong Kong stocks. This may cause the Chinese yuan to weaken further.
▪ Thai side – The market estimates that a slowdown in trading partners’ economies may cause exports in April to continue to contract by -2.2%y/y. in the second half of the year following the economic recovery in Asia However, the slowdown in major economies such as the US and Europe may be a factor to pressure Thai exports. As for the Monetary Policy Committee (MPC) meeting, we expect the economy to continue recovering under inflation, although slowing down. But still higher than the midpoint of the target range, this will result in the MPC deciding to raise the policy rate to 2.00%. ready to increase interest or more worried regarding the trend of inflation
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