Mr. Poon Panichphiboon, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank Revealing the value of the baht opened this morning (December 21) at a level of 34.65 baht per dollar. Appreciated from the previous day’s close at 34.78 baht per dollar. and look at the baht frame today expected to be at the level of 34.50-34.70 baht / dollar US stock market fluctuating movement following the last The Bank of Japan (BOJ) has extended the Japan 10-year bond yield to 0.00%+/-0.50% from the previous 0.00%+/-0.25%. As a result, the US 10-year bond yield increased +10bps to the level of 3.70% put pressure on players in the US financial market Still do not dare to come back to buy tech stocks and stocks in Growth style fully, although these stocks have decreased considerably in the past.
However, the US stock market Still supported by a rise in energy stocks (Chevron +1.6% Exxon Mobil +1.5%) following crude oil prices rose following the dollar’s depreciation. and the hope that the United States May gradually buy oil into the Strategic Oil Reserve (SPR), causing the S&P500 index to rise slightly +0.10%.
for the trend of the baht We believe that although the baht may gain some support from the dollar’s depreciation, Including gold profit taking transaction flow But the baht may not appreciate more than the support zone we see around 34.50 baht per dollar. As we estimate that if financial markets continue to experience volatility from the previous day, There is a chance that foreign players may gradually take more profits from Thai stocks. (Foreign investors net sold Thai stocks at -1.7 billion baht the day before.) And due to the global long-term bond yield trend rising, foreign investors may start selling long-term bond yields in Thailand, such as together (We are starting to see some long-term bond profit selling. But still not much) and interesting We believe that some foreign investors may use the baht to strengthen near the support zone to gradually take profit on short USDTHB positions, partly reflected in short-term bond net sales this week of nearly -8bn. baht
As for European stocks, the European STOXX600 index turned down -0.40%, pressured by a decline in tech stocks and growth-style stocks such as ASML -1.4%, Adyen -1.3% following long-term bond yields. European stocks rose in line with Japan’s 10-year bond yields as the BOJ shifted. In addition, concerns regarding the spread of COVID-19 in China returned to pressure the stocks of brand-name products to decline. (Kering -3.8%, Hermes -0.9%). European stocks were also supported by December’s Consumer Confidence Index, which rose to -22.2 points, which helped alleviate fears of a risky economic outlook. into a recession in Europe
in the currency market The dollar continued to weaken once morest the major currencies. (Recently, the dollar index (DXY) dropped near 104 points) was pressured by a sharp and intense appreciation of the Japanese yen (JPY) following the BOJ moved the 10-year bond yield frame in Japan, causing investors to Market players expected that the BOJ may start gradually adjusting the monetary policy to become less accommodative. Just as the major central banks have done before. (Recently, market players are optimistic that the BOJ may gradually raise interest rates by +10bps or +0.10% regarding 3 times next year.)
In addition, although the US 10-year bond yield is rising But the financial market atmosphere that still does not dare to accept too many risks and the weakening of the dollar has encouraged gold prices (COMEX gold contract for delivery in February) to rise through the resistance zone to $1,827 per ounce level which we estimate that Such a rise in the price of gold may have a gold take profit transaction flow. This flow contributed to the strengthening of the baht last night.
For today, the market will wait to assess the US economic outlook. Through the Consumer Confidence Index by the Conference Board, which the market assesses that Consumer Confidence Index in December may rise slightly to 101 points in line with the US labor market. that is still going strong even if it slows down a bit As for the problem of high inflation, it began to be resolved more.
