Mr. Poon Panichphiboon, Money Market Strategist, Capital Markets BankKrung Thai he revealed that bahtIt opened this morning (December 14) at 34.58 baht per dollar, “appreciating” from the previous day’s close at 34.80 baht per dollar, looking framed.baht today it is expected to be at the level 34.50-34.70 baht per dollar
fortrend baht see that although the baht appreciates rapidly during the night Following the devaluation of the dollar and the flow of gold profit taking. After the price of gold rose through the resistance zone, but the appreciation of the baht may begin to slow down. Because market players are waiting for the results of the Fed meeting. Assess the Fed’s policy rate bias before adjusting the position to remain clear again. The baht may be able to move up to some extent. According to the atmosphere exposed to market and cash flow risks, foreign investors can continue to buy Thai bonds in the short and long term. following a fall in bond yields on the US side
In this regard, we assess that an important helplinebahtIt can be in the range of 34.50 baht per dollar. This is the level that some players can gradually sell to benefit from the continued appreciation of the baht and believe that most players will not rush to adjust their holding positions until they know the results of the Fed meeting. we estimate that If the outcome of the Fed meeting Fed Interest Expectations (Dot Plot) and Fed Chairman’s Statements Both Reflect the Need to Keep Rates Going Until it can reach a high level that is higher than the 5.00% level that the market expects recently or more “Hawkish” than the market expectation. can lead Market players become more cautious. As a result, we may see the dollar appreciate. along with a rise in US 10 year bond yields, in which case it may see a contraction in the price of gold and a depreciation of the baht, but we believe that the baht will not depreciate so much that it will break through the key resistance zone of 35.00 baht the dollar because most players are waiting for the baht to weaken. To gradually sell the dollar or increase a USDTHB short position (look at the appreciation of the baht)
The recent high volatility of the Thai baht reflects the need for more diversified hedging tools. make us recommend Entrepreneurs should use a more diversified exchange rate hedging strategy. Especially the use of options, which will increase the efficiency of hedges during the period of heavy market volatility.
Slower-than-expected US headline CPI and core CPI inflation (excluding the impact of food and energy prices) to 7.1% and 6.0%, respectively, boosted market players’ confidence that the Fed will continue to raise expectations A delay in accelerating interest rates and there is a chance that the Fed will not raise interest rates any further than the 5.00% level that the market expects (from CME FedWatch Tool). Still in a risk-on state and causing the Nasdaq technology stock index to rise +1.01%, while the S&P500 index was able to close the market +0.73%.
On the European stock market, the STOXX600 European index turned +1.29% higher, in line with the risk appetite of the financial market. of the US inflation report slowed down more than expected This has led to technology stocks and Growth stocks in Europe, such as ASML +4.2%, Adyen +4.0%. (TotalEnergies +2.2%, Equinor +2.0%) after crude oil prices continued to rise. following the devaluation of the dollar and the relaxation of Chinese government measures to prevent the spread of COVID-19.
in the bond market The opinion of market players who believe that the Fed will slow down the rate increase and may raise interest rates no more than 5.00% after US inflation. continued slowdown Still supporting US 10-year bond yields down around -10bps, near 3.50% However, we believe US 10-year bond yields could move sideways until the market learns about rising prospects the Fed rate at the December Fed meeting. (early Thursday morning) and see that if the US 10-year bond yield rises, market players may gradually increase their holdings of long-term government bonds (Buy on Dip) in preparation for portfolio adjustments. To be prepared to cope with the main economic trends, the United States and Europe, which are at risk of going into recession.
in the currency market Exposure to the market has put pressure The dollar weakens heavily against the base currency The dollar index (DXY) fell to 104 points (released from the zone key support of 105 points again). gold price (COMEX gold contract for delivery in February) may rise through the resistance zone from $1,800 per ounce to $1,822 per ounce, we will see. Gold prices rebound near the resistance zone above. It may cause some players to gradually sell and make some gold profit Such transaction flow also contributes to the strengthening of the baht.
Today, the highlight is the results of the Fed’s FOMC meeting, which will be known at 2:00 AM on Thursday Thai time. perhaps past its peak and likely to slow down But continued inflationary pressure will lead to The US Federal Reserve or the Fed decided to continue raising interest rates. But at a slower pace (+50bps from +75bps) to 4.25%-4.50%, the Fed chairman and Fed officials may express concerns about the high core inflation outlook (latest Core CPI 6.0%), which could are reflected in the views of Fed officials who would support a hike to 5.00% or 5.25% (the 2023 endpoint policy rate estimate may be 4.875%), as well as upward revisions to headline and core inflation forecasts for 2022 and 2023. Market players will await the Fed’s reforms to economic growth and unemployment. slowing down more This could lead the Fed to consider cutting the 2023 economic growth rate to less than +1.0% (vs. +1.2% in the forecast at the September meeting) and raising the unemployment rate to 4.6% (vs. 4.4 %) in the previous year forecast)
