Biden is officially sworn in as president.
On January 18, 2021 at 7:49 a.m.
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(Money week) by … San Attarangsan, Manatwin Thitisomboon, Capital Market Business Kasikorn Bank Joe
Capital Market Business KASIKORNBANK estimates the baht is likely to move in a narrow range, assessing the baht frame this week at 29.80-30.20, a key event to follow this week is Joe’s inauguration ceremony. Biden on January 20, as the COVID-19 epidemic develops Is still an important monitoring factor In particular, the prospect of tightening the city shutdown will have a worsening effect on economies in many countries, and investors are likely to invest more in riskier assets due to the expectation of massive stimulus packages from the Biden administration. Monetary policy trends The ECB and B.OJ are scheduled for a monetary policy meeting this week. The signal from the central bank on the prospect of further easing of monetary policy is a factor to be monitored from recession risks resulting from the COVID-19 outbreak. In Asia, China will release GDP figures in Q4 2020, where the market still expects a steady recovery. For Thailand, there will be a report in December export numbers that are likely to continue to contract.
Overview of the foreign exchange market in the past week The baht fluctuated within the range of 29.90 – 30.20, opening the market to weaken during the open market, in line with the Asian currency due to the higher confidence in the dollar. Investor expectations of Joe Biden’s announcement detailing the multi-million dollar stimulus package gave investors the estimate that the Federal Reserve was However, the baht strengthened in the middle of the week as the dollar index fell after Boston Fed President Eric Rosengren said it was too early to. Consider reducing the acquisition size of assets This is in line with comments from St. Louis Fed President James Bullard that the prospects for monetary policy ahead will depend on vaccination and the development of the virus. Meanwhile, Fed Chair Jerome Powell said the Fed does not need to rush to downgrade measures to buy assets. Since the labor market is still unable to return to normal
In the past week President Joe Biden proposed a $ 1.9 trillion economic stimulus package. $ 4.15 billion for epidemic management and vaccine distribution. $ 1 trillion in aid to Americans And $ 4.4 billion in grants for businesses and communities affected by the virus. Biden also proposed a minimum wage hike to $ 15 an hour.
In Thailand, the Cabinet has approved a plan to pay 3,500 baht per person per month for 2 months to most Thais. Except for those in the social security system, bureaucracy and high income people. The government has approved a 10% reduction in water bills for two months and a reduction in electricity bills, which will be a stepping stone in February to March, while the Bank of Thailand has also issued assistance measures By extending credit measures from the original ending Dec. 31 to June 30, this year, people can apply for credit card and personal loans to 48 installments with a limit of 12 credit card interest rates. % And personal loans up to 22%. Car loans are reduced by at least 30%, interest rates up to 22%, and home loans can be deferred for installments as well.
The baht resumed its weakening before Friday’s close, in line with the yuan. And closes the market at 30.02 (Friday at 4.00 p.m.)
The bond market over the past week The 10-year US Treasury yield moved close to the previous week’s close of 1.10%. From the previous week it came from the official victory of the Democrats. Bring hope in a large set of stimulus measures Including the hope that inflation in the US will rise faster than the market expected. This may make the Federal Reserve (Fed) decide to delay buying government bonds. Including debt securities with home equity loans as collateral for mortgages However, the market is still waiting for good news from the US economic stimulus package. Most recently, Mr. Joe Biden said the President of the United States. Announced the economic stimulus package “American Rescue Plan”, the amount of $ 1.9 trillion. It aims to help households and businesses cope with the COVID-19 epidemic. Which causes the market to enter the market to return to risk-taking mode again.
For domestic factors, there is an important issue that the Thai Bond Instrument Association has revealed that in 2021, there will be more than 730 billion baht of maturity private debt instruments (debentures), classified as investment grade. More than 93% of the debenture issuers 127 out of 190 companies, which Ms. Ariya Tiranaprakit Deputy Managing Director Thai Bond Market Association Commented, concluded that these large companies are unlikely to have a problem selling bonds. But what needs to be considered is that banks currently have a lot of liquidity and interest rates are low. As a result, the issuer has to consider the interest cost between issuing the new debentures and the interest offered by the bank during that period. At the same time, if you look at the perspective of investors under the condition that the liquidity is still oversupply. And government bond yields are low. May see strength to buy private equity securities that have good credit ratings and are not in the industry affected by the COVID-19 outbreak. In the end, the credit spread of bonds with good credit rating may decrease, as at January 15, 2021 the yields of Thai government bonds matures 1, 2, 3, 5, 7 and 10. The year was 0.40%, 0.46%, 0.54%, 0.75%, 1.01% and 1.33%, respectively.
Foreign capital flows in the past week flowed out of the Thai bond market totaling approximately 4,553 million baht, which was a net sale of 1,145 million baht in short-term debt instruments, net sales of 3,207 million baht in long-term debt securities and had Held by foreign investors expires 201 million baht.
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