KTB-SCB evaluates the baht today – Thunhoon
- Stocks at the moment - Mr Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank, revealed that the baht opened this morning at the level of...
- Since last night, the baht (USDTHB) has turned around and continues to strengthen.
- After the Bank of England (BOE) cut interest rates -25bps to 4.75% as we estimated, the BOE has shown no willingness to continue cutting interest rates.
Stocks at the moment – Mr Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank, revealed that the baht opened this morning at the level of 34.02 baht per dollar. “Significant strengthening” from the previous day’s closing level of 34.28 baht per dollar.
Since last night, the baht (USDTHB) has turned around and continues to strengthen. (Moving range 33.92-34.31 baht per dollar) supported by the weakening of the dollar. which is under pressure from the appreciation of major currencies Especially the British Pound (GBP).
After the Bank of England (BOE) cut interest rates -25bps to 4.75% as we estimated, the BOE has shown no willingness to continue cutting interest rates. This makes market players believe that the BOE has a low 22% chance of cutting interest rates further at the December meeting In addition, the dollar is also under pressure from profit taking on the theme of Trump Trades, which also gives pressure on the US 10-year yield also fell. And the decline of the dollar and the US 10-year bond yield also contributed to the price of gold (XAUUSD) continuing to rebound to the zone of 2,700 dollars per ounce. This caused some market players to gradually sell to profit from the roughly +50 dollar/oz rebound in gold prices.
However, the appreciation of the baht has slowed near the support zone of 33.90-34.00 baht per dollar. This follows a small rebound in the dollar after the Fed’s FOMC meeting cut the policy interest rate -25bps to the level of 4.50%-4.75% as we expected, but the Fed did not send, including the Fed Chairman, a clear sign of the continued trend to lower interest rates The Fed also did not express confidence that inflation would return to its target of 2% on a sustainable basis, and expressed concerns about the prospects of the labor market as in previous meetings. This may be due to the results of the US elections. This allows the Fed and the Fed Chairman to take this stance. As a result, market players probably believe that The Fed may gradually lower interest rates less than the Fed indicated in the Dot Plot in September (market players think that It has the Fed has a 76% chance of cutting interest rates three times in 2025, less than the consensus of four.
The atmosphere in the US stock market Still in a state of risk, supported by the rise in large technology stocks such as Meta +3.4%, Nvidia +2.3%, which benefited from the gradual decline of US bond brands 10-Year Market and the move to embrace risk by market players from the hope of positive benefits from the economic policies of the Donald Trump administration, but the US stock market was put under some pressure From taking profits in stocks on the theme of Trump Trades, such as the financial sector (JPM -4.3%), the Nasdaq general technology stock index rose +1.51%, while the S&P 500 index rose +0.74%.
On the European stock market side, the STOXX600 index rebounded +0.62%, supported by gains in technology stocks such as SAP +3.6%, ASML +2.3%. additional economic stimulus measures It helps support stocks in the brand name product group and the mining group. They rose, like Hermes +3.1%, Rio Tinto +3.1%, but there was also pressure on European stock markets. From the selling pressure of British stocks after the BOE he did not show his willingness to continue cutting interest rates.
On the bond market side, the US 10-year bond yield turned around and fell into the 4.35% zone following the buying power of market players who were waiting for the moment for the long-term bond yield to adjust upwards after learning the results. of the US election. Especially in the case of the Republican Sweep or if Donald Trump wins the election However, the deterioration of the US 10-year bond yield has slowed somewhat after the Fed did not send a clear signal that it is ready to move. on with cutting interest rates going down continuously This has caused market players to prepare to evaluate the direction of the Fed’s monetary policy. Starting to see foreign analysts have downgraded our forecast for the Fed’s interest rate cut trend, for example, the Fed may cut interest rates only 1-2 times next year, while the Fed’s September Dot Plot indicates the the Fed could cut interest rates an additional 4 times next year We will not maintain the same view as The US 10-year bond yield has increased. To a level that is interesting and has a worthwhile risk reward, we would recommend that market players wait for a bond yield moment. rising to buy gradually (emphasis on Buy on Dip strategy)
On the currency market side The dollar has continued to weaken. Following profit taking in the Trump Trades theme, the British pound (GBP) has continued to strengthen following the stance of the BOE which has not indicated its willingness to continue cutting interest rates. After the Fed did not send a clear signal that it is ready to continue lowering interest rates as well, leading to the general Dollar Index (DXY) falling to the zone of 104.4 points (oscillating within the range of 104.2- 104.9 points). price The timing of the decline in the dollar and the US 10-year bond yield has helped support the price of gold (the COMEX gold contract due in December) to rebound into the zone of 2,710-2,720 dollars per ounce, giving players the market opportunity to sell gradually to profit from the gold price rebound. And this flow of transactions has also contributed to the appreciation of the baht.
Today, market players will follow the statements of key central bank officials, including the Fed, the European Central Bank (ECB) and the Bank of England (BOE), to assess the outlook for the main central banks’ monetary policy. Especially after knowing the US election results.
As for the US side the market players will wait and see. November Consumer Sentiment Index Report from the University of Michigan (U of Michigan Consumer Sentiment) This may tend to rise to the level of 71 points, which is better than the previous month. At the same time, market players will wait and follow. Forecast short-term and long-term inflation rates that could affect market players’ views on the Fed’s interest rate trend.
In addition to these factors, we believe that market players will wait to report on the operating results of listed companies. This will return to being a factor affecting the atmosphere in the financial market.
About the trend of the baht value Reversing the appreciation of the baht last night. This may cause the baht’s depreciation momentum to slow somewhat. But we will remain confident in our original view that the baht is still likely to depreciate gradually. As long as the baht does not strengthen until it breaks through the support zone of 33.65 baht per dollar. obviously (according to the Trend Following strategy). on the weak side If foreign investors continue to sell Thai assets, however, the depreciation of the baht may be slowed somewhat. As long as the price of gold can continue to rise. This may depend on the direction of the dollar and the US 10-year bond yield, as well as the conflict situation in the Middle East as well.
By the way, in the period after the market knows both the US election results and the results of the latest Fed FOMC meeting, we think we should keep an eye on the political situation in Thailand as well. Due to the chaos of the political situation in Thailand this can be a factor that puts pressure on the baht to depreciate. If foreign investors proceed to sell Thai assets Or at least it does not help to support the appreciation of the baht. Because foreign investors have not yet come back to buy Thai assets. until you are confident in the situation
Among the risk factors in the market is the Two-Way Volatility feature, whether it is the uncertainty of the situation in the Middle East. Including adjusting views on central banks monetary policy trends back and forth. Makes us still recommend that market players should use a wider range of risk-off strategies. Either use tools like Options or local currency. This will help increase efficiency in closing exchange rate risk.
Looking at the baht today It is expected to be at the level of 33.95-34.20 baht / dollar.
Siam Commercial Bank Financial Markets Group Evaluate the baht today, moving in the range of 33.95-34.20 baht / dollar.
The baht strengthened yesterday along with other currencies in the region. The results of the US Dollar Index and US Treasury yields fell after the number of applications for unemployment benefits increased.
Federal Reserve Bank Cut interest rates 0.25% to 4.75% as expected and said that Donald Trump will not be able to interfere with work.
The Bank of England cut interest rates by 0.25% to 4.75%, but the pound strengthened as investors worried about the trade war. and the state budget balance will increase This may cause interest rates to be lowered more slowly.
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