This morning, the baht strengthened, opening at 34.69 baht/dollar.

The baht opened this morning at 34.69 baht per dollar, strengthening from the previous day's close of 34.80 baht per dollar.

On January 14, 2568, Mr. Poon Panichpibul, a money and capital market strategist at Krungthai GLOBAL MARKETS, Krungthai Bank, revealed that the Thai baht opened this morning at 34.69 baht per dollar, strengthening from yesterday's closing level of 34.80 baht per dollar.

Since last night, the baht (USDTHB) has gradually strengthened in a Sideways Down pattern (fluctuating within the range of 34.66-34.82 baht per dollar), supported by the gradual weakening of the dollar after market players have gradually sold some of their Long USD positions to make profit.

In addition, major currencies such as the Euro (EUR) and the British Pound (GBP) have also rebounded somewhat after their recent sharp declines.

In addition, market players have reduced their expectations for the Bank of England (BOE) and the European Central Bank (ECB) to cut interest rates, supporting both currencies to gradually rebound. At the same time, some market players have gradually sold some dollars after the baht weakened near the resistance zone of 34.80 baht per dollar.

However, the baht is facing depreciation pressure after gold prices continued to fall last night, following concerns that the Fed will slow down interest rate cuts, which has pushed the US 10-year bond yield to test the 4.80% zone.

Regarding the Thai baht's outlook, we estimate that the baht may continue to fluctuate within a sideways range for now, as market participants await the US CPI inflation report on Wednesday night, Thailand time. The baht may still face resistance around 34.80-34.90 baht per dollar, while support remains around 34.60 baht per dollar.

However, we believe that even though market players are waiting for the CPI inflation report, the US PPI report, which will be released around 20.30:1 p.m. Thailand time, may also create market volatility. In particular, if the PPI report accelerates and comes out higher than expected, it may cause market players to worry that the PCE inflation rate, which the Fed is closely watching, is at risk of increasing as well (and the market may become even more worried if the CPI inflation rate this Wednesday is higher than expected). This will cause market players to believe that the Fed may delay interest rate cuts even more, to the point that the Fed may cut interest rates only once this year or not at all.

This image could support the US dollar and the US 10-year bond yield to adjust higher, pressuring both gold and baht prices. In addition, statistics from the past year show that the baht has the opportunity to fluctuate +/-1% in the 0.15 minutes after the market gradually receives the PPI report.

In addition, during today, we assess that the direction of foreign investors' fund flows may also affect the baht's trend. If foreign investors regain confidence in the Thai capital market after the Dinner Talk "Chat with Tony: Bull Rally of Thai Capital Market", it may help support the baht somewhat, reducing the depreciation pressure on the baht that may come from commodity transaction flows, such as gold purchase flows during a decline or oil purchase flows after crude oil prices have recently shown a tendency to increase.

Looking at the baht's 24-hour frame, it is expected to be at 34.60-34.85 baht/dollar (should be careful of volatility during the period of gradually receiving US economic data reports)

US stock market

Still facing pressure from concerns that the Fed may delay interest rate cuts, causing the US 10-year bond yield to continue to rise, pressuring tech stocks and growth stocks such as Nvidia -2.0%, Meta -1.2%

However, the US stock market still received some support, following the increase in energy stocks Exxon Mobil +2.6% after crude oil prices rose recently, and the financial group JPM +1.8%, waiting for the earnings reports of large financial institutions, causing the S&P500 index to close +0.16%.

european stock market

The STOXX600 Index fell -0.55%, pressured by selling pressure on tech stocks, growth stocks, and interest rate-sensitive stocks amid concerns that the Fed may delay interest rate cuts.

In addition, market players are starting to see that the ECB may cut interest rates less than four times, or 4bps, this year. However, European stock markets were supported by a rally in energy stocks after crude oil prices gradually rose, similar to US stock markets.

Bond Market

The US 10-year bond yield gradually rose to test the 4.80% zone amid concerns that the Fed will slow down interest rate cuts. However, the increase in the US 10-year bond yield was limited after some market players gradually bought long-term bonds when the bond yield rose.

In addition, the financial market atmosphere is cautious. In addition, market players are waiting for the US CPI inflation report before adjusting their clear bond holdings.

currency market

The dollar has weakened again, following profit-taking on long USD positions and the rebound in the strength of major European currencies, including the British pound (GBP) and the euro (EUR), causing the dollar to fall to the 109.5 point zone (fluctuating in the range of 109.3-110.1 points).

In terms of gold prices, although the dollar has declined somewhat, the increase in the US 10-year bond yield and profit-taking in gold after the price (COMEX gold futures contract for delivery in February 2025) rose to test the short-term resistance zone around $2,700-2,710 per ounce have pressured the gold price to fall to the $2,685 per ounce zone.

Over the next 24 hours, market participants will be assessing the Federal Reserve's monetary policy direction through the release of the U.S. December Producer Price Index (PPI) report, which may reflect the closely monitored PCE (Contingency Production Easing) inflation rate of the Fed. Simultaneously, market participants will be awaiting statements from Fed officials to inform their assessment of the Fed's interest rate outlook. Currently, market participants project an 18% chance of the Fed cutting interest rates twice this year.

In Europe, market players will be waiting for the release of the German ZEW Economic Sentiment for January, as well as statements from ECB and BOE officials to gauge the outlook for the two major central banks' policy rates. As of now, market players are giving the ECB an 81% chance of cutting rates four times, or 4bps, this year, while the BOE is giving around a 100% chance of two cuts, or 65bps, this year.

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