The baht opened at 34.63 baht/dollar, keeping an eye on US CPI inflation.
The baht opened this morning at 34.63 baht per dollar.
“Weakened slightly”
from the previous day's closing level of 34.60 baht per dollar.
Mr. Poon Panichpibul, Money and Capital Strategy Officer at Krungthai Global Markets, Krungthai Bank, revealed that the US stock market remains in a risk-on mood amid expectations among market participants that the Federal Reserve has approximately a 79% chance (according to the CME FedWatch Tool) of maintaining interest rates at its June meeting. This outlook has driven up tech and AI-themed stocks, led by Amazon (+2.5%) and Nvidia (+1.8%), resulting in the Nasdaq tech index rising +1.53% and the S&P 500 closing up +0.93%.
On the European stock market side, the STOXX600 index rebounded +0.16%, supported by an increase in tech and AI-themed stocks, as in the United States (Infineon Tech. +2.7%, ASML +0.7%), including Brand name product stocks (Hermes +3.0%, LVMH +1.8%) that are starting to improve. on hopes that the Chinese authorities may issue additional measures to stimulate the economy. However, European stock markets are still pressured by concerns that The European Central Bank (ECB) may continue to raise interest rates. to control the problem of high inflation
On the bond market Market players are eagerly awaiting the US CPI inflation report to be released later today. This causes the movement of the US 10-year bond yield to move sideways in the range of 3.70%-3.80%. We still view that Most market players are waiting for the right moment to gradually buy (buy on dip) long-term bonds, causing the increase in long-term bond yields to adjust from the market's exposure to risk or Adjusting the views of market players towards the Fed interest rate increase will be limited.
On the currency market side The dollar has had a chance to rebound and strengthen. After continuing to weaken during intraday trading Most recently, the Dollar Index (DXY) has risen to 103.5 points as market players are waiting for the US CPI inflation report, which may affect the direction of the Fed's monetary policy. As for the gold price side The atmosphere is open to financial market risks.
Including the rebound of the dollar's appreciation, it has put pressure on gold prices. (COMEX gold contract for delivery in August) dropped to test the $1,960 per ounce zone again before rebounding to the level of $1,974 per ounce. which we consider Some market players may have gradually bought gold during the decline and this transaction flow may have contributed to some pressure on the baht depreciation last night.
For today, we view that the financial market may fluctuate accordingly. US CPI Inflation Report for May If the CPI inflation rate slows down to 4.1% (+0.2%m/m), the Core CPI inflation rate, which does not include energy and food prices. It slowed down to the level of 5.2% (+0.4%) as expected, which may help market players still view that The Fed may not need to raise interest rates at its June meeting. But if the inflation rate is higher than expected It may cause market players to come back and see that The Fed may raise interest rates at its June meeting or increase the chances of next rate increase. If the Fed maintains interest rates at its June meeting
On the European side Market players will wait to assess the Eurozone economic outlook. Through the report on the German economic confidence index (ZEW Survey) in June. The market views that Concerns over the outlook for the industrial production sector affected by the economic slowdown of key trading partners, especially China, as well as the impact from the European Central Bank's (ECB) continued interest rate hikes, may put pressure on investors. Institutions and analysts are further negative on the outlook for the German economy, with the ZEW index possibly falling to -13.1 points.
For the trend of the baht value during the past night The baht fluctuates and weakens, testing the zone of 34.70 baht per dollar. Following the strengthening of the dollar and the flow of gold purchasing transactions, however, the baht has begun to gradually strengthen. After some market players gradually started selling to take profit on the short-term rebound of the dollar. As for the price of gold, it has rebounded somewhat as well.
We evaluate that The baht may fluctuate sideways within the same range as most market players may be waiting for the results of the main central bank meetings. However, during 16.00:XNUMX p.m., the baht has the opportunity to fluctuate and weaken somewhat. If Germany's ZEW index report comes out worse than expected Putting pressure on the Euro (EUR) to risk weakening somewhat.
In addition, you should be careful of fluctuations when the market gradually receives the US CPI inflation report (at 19.30:XNUMX p.m.) because if the CPI inflation rate comes out higher than expected, This will cause market players to begin to believe that the Fed may have an opportunity to raise interest rates at this June meeting or that the Fed may continue to raise interest rates in subsequent meetings, which such views will support the dollar back. Come to strengthen again
However, we view that the baht may not depreciate much. Although the dollar returned to strength If foreign investors do not continue to sell Thai assets As in the previous period, we view that the selling pressure of Thai assets has begun to decrease and there is a possibility that foreign investors may return to buy more Thai assets. After knowing the results of the meeting of the main central banks
We maintain the advice that At a time when the financial market still faces the uncertainty of Thai politics. including the monetary policy direction of the main central banks Entrepreneurs should use a variety of hedging tools, such as Options, to increase efficiency in hedging against exchange rate risk.
Looking at the baht today It is expected to be at the level of 34.55-34.75 baht/dollar before recognizing the CPI inflation rate.
and may be in the range of 34.50-34.80 baht/dollar during the period of gradually acknowledging the CPI inflation rate.
