2024-02-28 00:43:00
Mr. Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank Revealing the value of the baht opening this morning (28 Feb.) at 35.89 baht per dollar. Depreciated slightly from the previous day’s closing level of 35.84 baht per dollar. And looking at the baht today, it is expected to be at the level of 35.75-36.00 baht/dollar during the previous night. The baht depreciated slightly. (Oscillating in the range of 35.80-35.90 baht per dollar) Pressured by the pace of the increase in both the dollar and the US 10-year bond yield following Fed officials reiterated their stance of not rushing to cut interest rates. As a result, market players believe that the Fed will cut interest rates 3 times this year, as the Fed has stated in the latest Dot Plot. The latest US economic data reports, including orders for durable goods. and the Consumer Confidence Index by the Conference Board both came out worse than expected. As a result, the rise of both the dollar and the US 10-year bond yield was limited. Moreover, the rise of the dollar and the US 10-year bond yield pressured the price of gold to shrink closer to the zone. Support once more This causes some market players to buy gold at such times. And the flow of such gold purchasing transactions has pressure on the baht.
For the trend of the baht value We maintain our view that the baht is likely to fluctuate sideways down following the depreciating factors gradually subside. However, the baht may fluctuate and weaken during the day. From the transaction flow, buy dollars at the end of the month. or even the flow of purchasing Japanese Yen (JPY) following the Japanese Yen has weakened relative to the Baht quite recently. In addition, foreign investors may begin to rely on the timing of the Baht’s appreciation to some extent. Gradually sell to make a profit on both stocks and bonds. Putting pressure on the baht to not be able to continue to strengthen easily. If there is still no clear factor supporting the strengthening side
We are still evaluating that. The baht may have a support zone around 35.80 baht per dollar. But if the baht receives clear support from the strengthening side and strengthens beyond the said support level. This may provide an opportunity for the baht to continue strengthening, testing the 35.50-35.60 baht per dollar zone. which we consider There is still not much chance of this happening in the short term. And you may have to wait for the US PCE inflation report this week, including waiting for the US employment report. next week which clearly had to come out worse than expected Until causing market players to believe that the Fed may reduce interest rates more than 3 times as indicated in the Dot Plot, while the resistance zone is still in the range of 36.00 baht per dollar. which is the psychological resistance during this period
Market players will be waiting for important US economic data reports, such as the second expected economic growth rate for the fourth quarter of 2023, as well as statements from Fed officials in the early morning of Thursday.
On the European side The market will wait to assess the outlook for the European Central Bank’s (ECB) monetary policy through statements from ECB officials and economic data reports such as the Eurozone Consumer Confidence Index.
Players in the US stock market Still not daring to move forward and take on additional risks. After the past period, the US stock market has become hotter Supported by the rise of large tech stocks, as well as market players waiting for the PCE inflation report and keeping an eye on the US political situation. As a result, the overall S&P500 index closed the market +0.17%.
On the European stock market side, the STOXX600 Index rose +0.18%, supported by the hope of market players that the European Central Bank (ECB) has a chance to start cutting interest rates in the first half of this year. As a result, tech stocks and growth-style stocks rose, such as ASML +1.1%. In addition, hopes for the recovery of the Chinese economy also helped stocks in the brand-name product group. Automotive and mining They also improved. European stock markets faced some pressure. From the decline of Healthcare stocks, especially Novo Nordisk -1.2% following pharmaceutical companies in the United States has reported the results of a trial of a drug that can promote weight loss and might be a serious competitor to Novo Nordisk’s drug.
On the bond market side The attitude of all Fed officials who reiterate their stance is not in a hurry to cut interest rates. This, together with the overall atmosphere in the financial market which is still in a risk-on state, has encouraged the US 10-year bond yield to gradually rise to near the 4.30% level once more, but the US 10-year bond yield Still unable to adjust upwards. After the latest US economic data report began to come out worse than expected, we estimate that The further uptick in the US 10-year Bond Yield may be limited. After the views of market players are similar to what the Fed has assessed in the Dot Plot, causing the US 10-year bond yield to rise past the level of 4.50% may require the view that The Fed may cut interest rates less than 3 times or not cut rates at all. which we estimate The chance of this happening is very low at present, so the risk-reward of buying long-term bonds is still worth it. Therefore, we probably think that investors can gradually increase their investment positions. Or investors may wait for a Buy on Dip moment as well.
On the currency market side The dollar has strengthened somewhat following the increase in the US 10-year bond yield, but overall the dollar has not been able to continue to strengthen and has faced further reductions in long USD positions by market players. from market risk exposure and US economic data reports The latest one came out worse than expected. As a result, the overall dollar index (DXY) continues to oscillate near the level of 103.8 points (oscillating in a range of 103.6-103.9 points). As for the price of gold. The timing of the upward trend of both the dollar and the 10-year bond yield, as well as the risk exposure of the US financial market. has pressured the price of gold (COMEX gold contract for delivery in April) dropped to the zone of 2,030-2,040 dollars per ounce once more. During this price zone, some market players still gradually buy some gold. And this transaction flow contributed to pressure on the baht to depreciate last night.
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