The Thai baht opened this morning at 37.35 baht per dollar, appreciated as markets worried about the Fed raising interest rates. As Bond Yield hits new highs
Poon Panichpiboon, an analyst at the Krung Thai Bank Trade Room, said the baht opened this morning at 37.35 baht per dollar. It “appreciated” from the previous day’s close at 37.40 baht per dollar. The baht tends to fluctuate on the weak side and may test the resistance zone of 37.40-37.50 baht per dollar during this period. However, the depreciation of the baht may be limited. If foreign investors slow down selling Thai assets and start to return to being more on the buy side.
which recently started to see signs of a decline in both bonds and stocks Especially in stocks where foreign investors returned to buy a net of around 2.3 billion baht the previous day, but the baht may not appreciate in the short term. If there are no new positive factors came to support the baht Thus, the baht may still have a support zone around 37.20 baht per dollar.
In times of high volatility in the financial market due to the uncertainty of many factors It would be advisable for traders to use more diversified foreign exchange hedging strategies. Especially the use of options, which will help increase the efficiency of hedging well during heavy market volatility. Looking at the baht frame today It is expected to be at the level of 37.20-37.45 baht/dollar.
However, concerns about the trend of raising interest rates by the Fed that may affect the US economy A heavy slowdown and the risk of a recession remain a key factor forcing market players to assess the outlook for US listed companies. It could be worse and risk an earning recession picture, leading most players to continue to reduce their risky asset holdings. Growth-style stocks Nvidia -5.3%, Tesla -4.1%, Amazon -1.0% put the S&P 500 down by -0.84%.
The US stock market It was still supported by the acquisition of Defensive stocks such as Healthcare Group (Eli Lilly +4.9%, Merck +3.5%), as well as the purchase of tech stocks. Big in abbreviations (Microsoft and Alphabet +0.9%)
On European stock markets, Europe’s STOXX600 index dropped more than -1.79% amid fears of a heavy global economic slowdown. from accelerating interest rates of central banks (latest Fed, Central Bank of Switzerland and the Bank of England have accelerated interest rates to control inflation)
European stock markets also faced pressure as the September Consumer Confidence Index dropped to -28.8, worse than market expectations.
The bond market Although the atmosphere in financial markets is on the brink of risk, the latest US labor market report, Initial Jobless Claims, remained at a low of just 213,000, better than market expectations. Still supporting the outlook for the Fed to continue raising interest rates and helping the US 10-year bond yield rise to a new high at 3.71%.
However, maintain the same view that Longer-term bond yield increases will make a return to long-term government bonds more attractive. This is because the global economic outlook in the future may slow down heavily and risk entering a recession. from the effects of accelerating interest rates by central banks
currency market The dollar moved heavily. The dollar index (DXY Index) fell sharply to 110.6 points, pressured by the appreciation of the Japanese yen (JPY) sharply to 140.4 yen per dollar. from the intervention of the Japanese currency The dollar index rebounded back to 111.2, following a 10-year US bond yield gain and market players’ demand for safe-haven assets.
The strong volatility of the dollar has also caused the gold price to fluctuate heavily. The price of gold rose to $1,690 an ounce. following the depreciation of the dollar Before facing profit taking and continued to fall back to the levels of 1670-1680 dollars per ounce. After the dollar and the 10 year bond yield, the US rose.
However, the price of gold may be supported by some players who want to keep their assets safe. Thus, gold prices may be able to stand above the support zone of $1,670 per ounce. But the transaction flows buying gold in such a short period. It may be another factor that pressures the baht on the weak side as well.
For today, after the market has received the results of the meeting of the central banks. Market players will wait to follow the economic outlook of each country. Through the September Industrial Manufacturing and Services Purchasing Managers’ Index (S&P Global Manufacturing and Services PMIs)
On the US side, the market expects the US service sector. may contract at a slower rate driven by increased people’s spending according to the decline in fuel prices This is in line with the continually rising consumer confidence. As well as retail sales (Retail Sales) that continues to expand. The S&P Global Services PMI for September may rise to 45.5 from 43.7 the previous month. (index below 50 means contraction)
The industrial manufacturing sector may continue to expand. At a slower rate following the global economic slowdown and high raw material costs, the industrial manufacturing PMI may drop slightly to 51.3 from 51.5 in the previous month. (index above 50 means expansion)
While European markets are expected, the Eurozone and British Manufacturing and Services PMI reports. will continue to reflect the slowdown trend of the European economy. Amid high inflation and the slowdown of the global economy, the Eurozone Manufacturing and Services PMI in September may continue to decline to 48.7 and 49 points, respectively.
However, in addition to the PMI report, the manufacturing and services sectors Markets await the outcome of the Italian general election on Sunday. The latest polls show that the far-right Brothers of Italy party has the potential to lead the government. causing market players to be more concerned about European political problems