Miss Kanchana Chokpaisarnsilp research executive Kasikorn Research Center has revealed that today’s baht December 19, 2022, adjusted to approx 34.77 baht per dollar in the morning 9.30 AM appreciated from last Friday’s close at 34.98 baht per dollar The baht fetched to appreciate. after a significant depreciation at the end of last week
While the dollar’s bullish frame will be limited Why the US economic numbers There are weak signals such as the December preliminary PMI. down in both the manufacturing and services sectors
As for the movement of the baht today, it should be 34.70-35.00 baht per dollar. The factor to monitor will be the direction of flow of the fund. The movement of regional currencies and the renminbi. Including the housing market index for December. of the United States
Mr. Poon Panichphiboon, Money Market Strategist, Capital Markets Krungthai GLOBAL MARKETS Krung Thai Bank said last week Financial markets remain in a closed state. Amid worries about the prospect of a recession If major central banks continue to hike policy rates This week, we should keep an eye on the US PCE index report, which reflects inflation that the Fed monitors closely. And looking forward to following up on the results of the Bank of Japan (BOJ) meeting.
The interesting economic data report is as follows.
▪️ US side – The market sees that the US economic outlook has continued to slow down Including the price of energy products which have declined in the past. could result in November The Personal Consumption Expenditure Price Index (PCE), the inflation rate closely monitored by the Fed, could increase by +5.5% compared to the same period last year. The core price index of personal consumption expenditure (Core PCE), which excludes the effect of food and energy prices. It could only increase by +4.6% y/y.
This is a continued slowdown in inflation indicators that the Fed is watching closely. will reflect that Recent Fed forecasts may overstate some inflation. In the event that the PCE Index and Core PCE slow as expected or slow more than expected. It could encourage market participants to ease concerns about the Fed’s tendency to hike interest rates above 5.00%, which could help the mood in financial markets change to be more risk-averse.
▪️ European side – The market estimates that Recession (recession) Germany could face next year. It might not be too bad. Reflected through the German business confidence index (Ifo Business Climate) which could rise to 87.4 points in December. improved from the previous month. This is in line with concerns about the natural gas shortage problem which eased the most. Inflation trend that has started to slow down and measures to help families by the government
than in the previous week Germany’s economic confidence index (ZEW Survey) also improved more than expected. Including the slowing trend of inflation. This could help push the Eurozone consumer confidence index to -22 points in December from -23.9 points the previous month.
▪️ Asian side – The market sees that commercial banks in China could cut their 5-year prime rate by -10 basis points to 4.20% to be in line with Chinese government measures to support the real estate sector. to calculate interest rates for private and household mortgages. could remain at the 3.65% level
As for the Bank of Japan (BOJ), even if Japanese inflation continues to accelerate Headline inflation (CPI) may reach 3.9% in November, but the BOJ may choose to continue accommodative monetary policy. Holding the policy rate at -0.10% and proceeding to buy 10-year Japanese government bonds to keep the bond yield not much above 0.25% as the Japanese economy continues to feel pressure from the economic slowdown and the high pressure of domestic inflation spending
However, the key issue is where future monetary policy adjustments will go. Especially in the coming year, when the term of the current BOJ governor expires. If the BOJ has a clear communication on the trend of these policy adjustments, it could help strengthen the yen (JPY) in the short term. The Bank of Indonesia (BI) may decide to hike its policy rate by +50 basis points to 5.75% to ease downward pressure on the rupiah (IDR) and help bring inflation back into its target range.
▪️ Thai side – The market expects the impact of the global economic slowdown will make exports (Export) in November. It could continue to contract by -5% y/y, while imports could expand by +0.6% y/y, leading to a trade balance deficit of around -100 million USD.
As for the performance of the baht, it is estimated that the baht may swing sideways and fluctuate slightly. according to the appreciation of the dollar Or take profits on short-term risky assets, but the view that the baht will not weaken through the resistance zone Because some exporters are waiting to gradually sell off the dollar. As for foreign players, they can wait for the moment when the baht weakens. To add a USDTHB short position (due to the appreciation of the baht)
As far as the dollar is concerned, the dollar may still have some support. If the market is still closed to the risk of a recession, you should be concerned if the US PCE index signals that inflation could continue to slow more than expected. The market could start to become more open to risk. This may push the dollar to depreciate, moreover, if the BOJ signals it is ready to adjust monetary policy to be tighter. There is a possibility that the Japanese yen (JPY) could appreciate and help support the appreciation of the baht.
