Mr. Poon Panichphiboon, Money Market Strategist, Capital Market Krungthai GLOBAL MARKETS Krung Thai Bank revealed that the baht opened this morning, January 27, 2023, at 32.78 baht per dollar. “Depreciated slightly” from the previous day’s close at 32.76 baht per dollar. by looking at the baht frame today Expected to be at 32.60-32.90 baht per dollar.
The atmosphere in the US stock market side turn around and take more risks after the US economic data report came out better than expected, for example, GDP in the fourth quarter grew by +2.9% from the previous quarter; Year-on-year (market view +2.6%). Initial Jobless Claims and Continuous Jobless Claims continued to decline to the level of 186,000 and 1.97 million, respectively, US economic data report That came out better than expected. As a result, market players are relieved of the US economic outlook. slow down hard or risk entering a recession more And dare to return to buy risky assets again, allowing the S&P500 index to close the market +1.10%
In European markets, the STOXX600 index turned up +0.42%, supported by better-than-expected corporate earnings reports. (Contrary to what market players were worried about the previous day) In addition, the US economic data report. The better-than-expected results also boosted investment sentiment in the European stock market as well. Market players will wait to follow the European Central Bank (ECB) meeting closely before adjusting risky assets to be clear. go
on the Bond market side US Financial Market Risk Exposure The US 10-year bond yield was backed up to 3.50% after dropping to 3.43% the previous day. would be limited Because market players are waiting for the US PCE inflation report today, if the PCE inflation report continues to slow down as expected, It may even make players in the market confident that The Fed may not be accelerating interest rates. Pressure for the US 10-year bond yield to shrink somewhat
in the currency market The dollar turned stronger against major currencies, with the dollar index (DXY) recently rising to 101.8 points, supported by US economic data. that came out better than expected As a result, market players were relieved of concerns about the prospect of a sharp slowdown in the US economy. However, market players’ vulnerability to risks, as well as an increase in the US dollar and US 10-year bond yield, pressured Let the price of gold (gold contract, COMEX market, delivered in February) fall to the support zone of 1,920 dollars per ounce. before slightly rebounding to $1,930 an ounce
For today, the main highlight that market players will be waiting to follow is the PCE inflation trend that the Fed is monitoring. The drop in energy prices and product discount promotions to release stocks at the end of the year will pressure PCE inflation in December to slow down to 5.0%. But core inflation only in relation to the services sector and excluding core PCE Services ex. Housing Rents rents may not slow down much. The Fed may continue to worry that inflation slows down and it will need to keep raising policy rates this year.
In addition to the aforementioned economic data reports Market players will wait for earnings reports of listed companies. which if most of the earnings reports come out better than expected It may help to keep the financial market atmosphere in a state of continued exposure to risks.
As for the trend of the baht, it is seen that the fluctuating movement in the weaker side of the baht It comes from the return of the appreciation of the dollar. Including the flow of buying gold transactions in a short stroke (The price of gold dropped to the support zone the previous day), which today sees that the baht tends to move in a sideways frame, but be careful of volatility when the market gradually recognizes the US PCE inflation report.
If the PCE inflation report slows down as expected, it may not change market players’ views that The Fed will slow down the pace of rate hikes much. As a result, the dollar may not depreciate much or the baht may not strengthen strongly, but if inflation does not slow down as expected. And on the other hand, it may accelerate from the previous month. We believe that the market may turn around to take risks quickly. As a result, the dollar may continue to appreciate. This pressures the baht to weaken to test the resistance zone.