2024-01-12 03:06:00
January 12, Mr. Poon Panichpibun, capital market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank, revealed that the baht opened this morning at 34.99 baht per dollar. “Slightly strengthened” from the previous day’s closing level of 35.07 baht per dollar. Looking at the baht today It is expected to be at the level of 34.85-35.15 baht per dollar.
During the previous night The value of the baht fluctuates quite a bit. (Oscillating in the range of 34.96-35.23 baht per dollar) with a rhythm of continuous depreciation. After reports of US CPI inflation and US Core CPI inflation came out higher than expected, encouraging the dollar and the US 10-year bond yield to have an opportunity to rise. As for the price of gold, it dropped out of the latest support zone. However, the baht returned to strengthen near the level of 35 baht per dollar again, supported by an increase in the price of gold amidst the tension situation in the Middle East that has become very heated. climb
At the same time, both the baht and gold prices It was also supported by the contraction of the dollar and the US 10-year bond yield from the results of the 30-year bond auction, which also reflects the high demand of market players. Including the latest Fed balance sheet report. that still reflects that Financial institutions in the United States There is still a need for liquidity through the Bank Term Funding program.
US stock market fluctuating movement After reporting US economic data which came out better than expected Both the number of people applying for unemployment benefits (Jobless Claims) and the CPI inflation rate have pressured big tech stocks to shrink due to concerns that The Fed may not be in a hurry to cut the policy interest rate as the market expects. However, the US stock market There was some rebound. Following the contraction of the US 10-year bond yield, which supported tech stocks. Big rebound As a result, the overall S&P500 index closed the market at -0.07%.
As for the European stock market, the STOXX600 index continued to decline -0.77% amid selling pressure on tech stocks and growth-style stocks such as ASML -0.4%, LVMH -1.6% due to concerns that US inflation rate slowing down slowly This may prevent the Fed from cutting interest rates as quickly and deeply as the market had expected. Meanwhile, financial stocks began to face selling pressure: HSBC -3.1%, UBS -1.7% before the market gradually realized it. Report on the performance of financial institutions in both the US and Europe starting this Friday.
On the bond market side, the US 10-year bond yield moves quite volatilely. There is a chance of rising above the level of 4.00% according to the US economic data report. which came out better than expected Before the 10-year bond yield in the United States dropped to 3.97% after the results of the 30-year bond auction came out, reflecting the still high demand from market players, at the same time, the conflict situation in the Middle East was becoming very heated. The increase also helps support the demand for additional bond holdings. However, the fluctuation of the US 10-year bond yield has caused us to maintain the same view that Market players should be wary of gradually lowering their expectations for a Fed rate cut. If the US economic data report Still came out better than expected. And market players should focus on the Buy on Dip strategy by trying to take into account the break-even point or break-even point when considering the total return or Total Return that will be obtained from holding bonds.
On the currency market side The dollar moves fluctuating. The dollar has strengthened. After reporting the US CPI inflation rate and the number of people applying for unemployment benefits in the US. It came out better than expected, but the dollar came back to shrink later. Following the continuous decline of the US 10-year bond yield, the overall Dollar Index (DXY) continues to oscillate near the level of 102.3 points (oscillating within the range of 102.2-102.8 points).
In terms of the price of gold The timing of the upward movement of both the dollar and the US 10-year bond yield after receiving reports of US economic data. There is pressure on the price of gold (COMEX gold contract for delivery in February) to shrink near the level of 2,020 dollars per ounce. The short-term support zone that we assessed has broken out. But the conflict situation in the Middle East is becoming more heated. Including the shrinking of the dollar and the US 10-year bond yield, it has supported the price of gold to rebound around +20 dollars per ounce or test the zone of 2,040 dollars per ounce. Causing some market players to gradually sell to make a profit due to the rebound in gold prices. This transaction flow also helped the baht to strengthen.
For today, market players will wait for important economic data reports from China. both CPI inflation rate and international trade balance (Export and import totals) to assess the trend of Chinese economic recovery.
As for the US side Market players will be watching for signs of inflation. Through the PPI Producer Price Index report and waiting to follow the statements of Fed officials. To assess the trend of adjusting the Fed’s monetary policy. After the market gradually received reports of important economic data, including employment and inflation in December.
While the trend of the baht value We evaluate that The momentum of the baht’s depreciation after hearing the US CPI inflation report may slow down and the baht may have a chance of appreciating below the level of 35 baht per dollar if gold prices can continue to rise. Amid concerns about the conflict situation in the Middle East that is likely to intensify. The baht may receive support. Similar to the period of the Israel-Hamas war. which encourages the price of gold to continue rising, but we estimate that Conflict situation in this round It may not be so worrisome that it would resemble the early stages of the Israel-Hamas war.
During the day The baht may still have the opportunity to fluctuate and depreciate somewhat. If foreign investors continue to gradually sell Thai assets, especially stocks, amidst an atmosphere in the financial market that may still be in a state of risk-taking.
Among the aforementioned strengthening and weakening factors Makes us see that The baht may move sideways near the level of 35.00 baht per dollar. The baht may not have depreciated much yet. And we still evaluate the zone 35.20-35.30 baht per dollar. It is an important resistance level during this period, while continued appreciation may be difficult. If there are no new factors came to support the zone at 34.80 baht per dollar This may be an important support for the baht during this period.
During this period, we found that the volatility of the baht remained higher than its historical average. (looking at the weekly baht frame) makes us maintain our recommendation 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.
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