Krungthai GLOBAL MARKETS reveals the baht opened this morning at 35.88 baht per dollar. “Appreciated a little. Almost unchanged” from the previous day’s closing level of 35.89 baht per dollar.
Mr. Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank, revealed that during the previous night The value of the baht fluctuates sideways (oscillating in the range of 35.84-35.95 baht per dollar) with some periods of weakening. Follow the transaction flow of buying gold at the time of the correction. After the gold price gradually dropped to the short-term support zone. Following the increase in the US 10-year bond yield, however, the baht did not depreciate much. Because overall the dollar is fluctuating within the range. To wait for new factors, especially the US CPI inflation report on Tuesday night. (Thailand time)
US stock market Starting to face sales pressure to make a profit Especially the selling pressure of big tech stocks (the Magnificent 7) such as Microsoft -1.3%, Amazon -1.2% after stocks in the Mag. 7 group have risen hotly in the past. Players in the stock market United States Everyone is waiting for the CPI inflation report on Tuesday, causing market players to be in no hurry to move forward and take on additional risks. Although the overall earnings reports of US listed companies in the 4th quarter that have been gradually announced look bright.
On the European stock market side, the STOXX600 index turned around and rose more than +0.54%, supported by an increase in brand name product stocks L’Oreal +2.4% and LVMH +1.8%, which were also supported by earnings reports. That came out brightly. At the same time, financial stocks rebounded somewhat. After facing sales pressure in the previous period From the reported earnings that came out lower than expected, market players still don’t dare to take on too much risk. Waiting to keep an eye on important economic data reports from the US and Eurozone, as well as statements from key central bank officials (Fed, BOE and ECB).
On the bond market side, the US 10-year bond yield fluctuates. with some adjustments According to the views of market players who still believe The Fed is in no hurry to cut interest rates. At the same time, rising crude oil prices are helping to support bond yields. However, the atmosphere is cautious in the US stock market. As a result, the overall US 10-year bond yield has not risen past the level of 4.20% and is still fluctuating near the level of 4.18%. However, we estimate that There is still a chance that the US 10-year bond yield will easily rise to break through the 4.20% level if market players gradually lower their expectations of the Fed’s repeated interest rate cuts. This may occur from reports of US economic data. that is still strong and better than expected, or inflation that slows down more slowly than expected. Therefore, we would like to emphasize that Market players should focus on the Buy on Dip strategy to reduce the risk of loss when looking at the overall return or Total Return. If the US 10-year bond yield can rise above the level of 4.20%, it will be more likely. Very interested in gradually purchasing
On the currency market side The dollar as a whole moved sideways, with the dollar still gaining some support. From the perspective of market players who still believe The Fed is in no hurry to cut interest rates. Including the atmosphere of being closed to accepting risks from the US stock market. But most market players still haven’t accepted a clear adjustment to their dollar holding position. Until the US CPI inflation report is acknowledged, the overall Dollar Index (DXY) is still fluctuating near the level of 104.1 points (swinging in the range of 104-104.3 points). As for the price of gold. The timing of the upward trend in the 10-year bond yield in the United States has pressured the price of gold (COMEX gold contract for delivery in April) to shrink to the short-term support zone of 2,020-2,030 dollars per ounce. before rebounding somewhat and swinging near the level of 2,030 dollars per ounce. Technically The decrease in the price of gold during this period This has increased the risk that gold prices may continue to decline as fast and strong as in late September. If the price of gold continues to adjust It may shrink to test the next support zone around 2,015 dollars per ounce and there will be a zone of 2,000 dollars per ounce. It is the main psychological support.
For today, we estimate that An important highlight that market players will keep an eye on is the US CPI inflation report for January. If CPI inflation continues to slow down, (Keep an eye on the inflation momentum of %m/m, %3m year-on-year and %6m year-on-year) and is likely to reach the Fed’s 2% target, which may cause market players to remain confident in their forecasts. The trend of reducing interest rates from the Fed that market players estimate that The Fed will start cutting interest rates at its May meeting. and may reduce interest rates by -125bps or 5 times, but if inflation accelerates or did not slow down as the market expected It may put even more pressure on you. Market players must re-evaluate whether The Fed may not be in a hurry to cut interest rates. And the Fed may only cut interest rates according to the latest Dot Plot (cutting 3 times and may begin cutting interest rates in June). Such views may further support the rally of both the dollar and the US 10-year bond yield.
In addition, market players will wait and see. Report on Eurozone economic data, such as British labor market data and the ZEW Economic Confidence Index of Germany and the Eurozone, which will be one of the factors used in evaluating the policy interest trends of both the BOE and the ECB.
By the trend of the baht value We are still evaluating that. The baht is at risk of fluctuating and depreciating, testing the important resistance zone around 36.00 baht per dollar. This picture may occur when the market gradually receives the US CPI inflation report tonight as well. In addition, during the day The baht may face some downward pressure. After the overall financial market atmosphere began to return to a more cautious state. This can pressure foreign investors to gradually turn around and sell Thai stocks. However, if the baht fluctuates and weakens past the level of 36.00 baht per dollar, we estimate that The baht has a chance to fluctuate and depreciate closer to the zone of 36.15 baht per dollar. Because all the players in the market both exporters Including foreign players who have a short THB position (looking at the baht depreciating) may gradually sell the dollar or take profit from their short THB position during this period, which will be the next short-term resistance zone.
In this period, the baht has begun to fluctuate more in line with other Asian currencies, especially the Chinese Yuan (CNY) and the Japanese Yen (JPY), making it necessary to keep an eye on the direction of the Asian currencies as well. We evaluate that The depreciation of the Chinese Yuan may be limited. This is because the Chinese authorities have clearly tried to support the Yuan in the past. while the Japanese yen Return to the currency that we evaluate There may be some fluctuations in the value. According to statements from BOJ officials, who may reiterate their stance of not rushing to raise interest rates or raising interest rates less than the market is evaluating (recently, the market thinks that the BOJ may raise interest rates about 3-4 times this year).
We would like to emphasize that during this period, the volatility of the baht is higher than the historical average. (Looking at the weekly baht frame) clearly causing us to maintain the advice that Entrepreneurs should use a variety of hedging tools, such as Options, to increase efficiency in hedging against exchange rate risk. And in addition to using the aforementioned tools Choosing to transact in local currency is another interesting way to manage exchange rate risk. Entrepreneurs should compare transaction costs and hedging plans before making every decision. Looking at the baht today It is expected to be at the level of 35.85-36.00 baht/dollar in the period before the market receives the US CPI inflation report and evaluates the range in the range of 35.75-36.15 baht/dollar during the period when the market gradually receives the US CPI inflation report.
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2024-02-13 00:47:57
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