- USDTHB: moving in the range 35.44-35.50 this morning supportive level at 35.55 resistance level at 35.55
- SET Index: 1,320.9 (+0.97%), 31 July 2024
- S&P 500 Index: 5,522.3 (+1.57%), 31 July 2024
- Thai 10-year government bond yield (interpolated): 2.59 (-0.60 bps), 31 July 2024
- US 10-year treasury yield: 4.09 (-6.0 bps), 31 July 2024
- Fed holds rates steady while noting progress on inflation
- BOJ raises rates, signals gradual end to bond buying
- Eurozone inflation rises, posing challenge for ECB
- China's sluggish factory PMI reveals problems in its export powerhouse
- Dollar declines as Fed hints at potential rate cut in September
Fed holds rates steady while noting progress on inflation
The Federal Reserve decided to keep interest rates steady, recognizing recent improvements in inflation and a slowing labor market. The Federal Open Market Committee (FOMC) maintained its benchmark rate at 5.25% to 5.5%. Federal Reserve Chair Jerome Powell indicated that rates might be lowered as early as September if the U.S. economy progresses as anticipated, suggesting the central bank is nearing the end of its two-year fight against inflation, though it remains amid the presidential election cycle.
BOJ raises rates, signals gradual end to bond buying
The Bank of Japan raised interest rates to their highest level in 15 years and introduced a detailed plan to reduce its extensive bond purchases, marking a move towards ending a decade of substantial economic stimulus. The BOJ's board increased the overnight call rate target to 0.25% from 0-0.1% in a 7-2 vote, the highest short-term rate since 2008. Under Governor Ueda, the BOJ has raised rates by a total of 35 basis points in just four months. Additionally, the BOJ announced a quantitative tightening plan, aiming to cut monthly bond purchases in half to 3 trillion yen ($19.6 billion) starting from January-March 2026.
Eurozone inflation rises, posing challenge for ECB
Eurozone inflation unexpectedly rose to 2.6% in July from 2.5% in June, despite a drop-in service sector price growth. This data did not alter expectations for a September interest rate cut by the European Central Bank but may raise concerns about the ECB's ongoing inflation control efforts. The core CPI remained unchanged at 2.9%, contrary to expectations of a decline.
China's sluggish factory PMI reveals problems in its export powerhouse
In July, China's manufacturing activity dropped to a five-month low as factories faced falling orders and prices. The National Bureau of Statistics (NBS) reported that the purchasing managers' index (PMI) fell for the third month in a row to 49.4, just below the growth-contraction threshold of 50 and slightly above the forecast of 49.3.
Dollar declines as Fed hints at potential rate cut in September
The 10-year government bond yield (interpolated) on the previous trading day was 2.59, -0.60 bps. The benchmark government bond yield (LB346A) was 2.58, +0.00 bps. Meantime, the latest closed US 10-year bond yields was 4.09, -6.0 bps. USDTHB on the previous trading day closed around 35.72 moving in a range of 35.44 – 35.50 this morning. USDTHB could be closed between 35.35 - 35.55 today. The dollar weakened, retesting the 104.00 level after the FOMC meeting and dovish comments from Fed Chair Powell, who hinted at a possible September rate cut if data supports it. The Euro gained slightly due to higher-than-expected Eurozone inflation data. The Japanese yen strengthened, causing USD/JPY to fall below 150.00 after the BoJ rate hike and Powell's remarks.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
