- USDTHB: moving in the range 33.765-33.79 this morning supportive level at 33.65 resistance level at 33.85
- SET Index: 1,160.1 (-2.3%), 12 Mar 2025
- S&P 500 Index: 5,599.3 (+0.49%), 12 Mar 2025
- Thai 10-year government bond yield (interpolated): 2.141 (-0.94 bps), 12 Mar 2025
- US 10-year treasury yield: 4.32 (+4.0 bps), 12 Mar 2025
- US inflation slows, offering some relief ahead of tariffs
- EU plans tariffs on €26 billion of US goods in retaliation
- BoC cuts rates, cautions over tariffs
- Canada responds to trade war with tariffs on US steel and aluminum
- US dollar rises slightly as markets digest CPI data and tariff retaliation
US inflation slows, offering some relief ahead of tariffs
Both the headline CPI and the core CPI increased by 0.2% from January, falling short of the expected 0.3% rise. Shelter costs rose by 0.3%, contributing nearly half of the monthly CPI increase, but this was a smaller increase compared to recent years. On an annual basis, the headline inflation dropped to 2.8% from 3% in January, while core inflation fell to 3.1% from 3.3%, marking the slowest pace since April 2021. Core inflation was driven by increases in medical care, used cars, recreation, and apparel, while airline fares and new vehicle prices declined. The decline in airfares pointed to weakening travel demand, a trend recently noted by airlines, but analysts indicated that this drop will not have an impact on the PCE report.
EU plans tariffs on €26 billion of US goods in retaliation
The EU retaliated against US metals tariffs, planning duties on up to €26 billion ($28.3 billion) of American goods. This followed the US's 25% tariffs on steel and aluminum, escalating the trade conflict. The EU will target goods from Republican-led states, like Louisiana soybeans, and begin consultations to impose additional tariffs on agricultural and industrial products by mid-April.
BoC cuts rates, cautions over tariffs
The Bank of Canada cut rates by 25bps to 2.75%, as expected. Governor Macklem noted that future rate changes will be cautious, balancing inflationary pressures from rising costs and deflationary pressures from weaker demand. The BoC highlighted the impact of US tariffs, which may slow economic activity and increase inflation, with rising short-term inflation expectations. While monetary policy can’t offset a trade war, it aims to prevent sustained inflation. During the Q&A, Governor Macklem also mentioned that the neutral rate is estimated around 2.75%, suggesting that the BoC is now at this neutral level. Looking ahead, the next rate cut is not expected until June.
Canada responds to trade war with tariffs on US steel and aluminum
Canada has imposed 25% tariffs on C$30 billion ($20.8 billion) of US-made goods, including steel, aluminum, and consumer items like computers and sporting equipment, in response to US tariffs. These tariffs, matching the US levies "dollar for dollar," will take effect at 12:01 a.m. New York time on Thursday.
US dollar rises slightly as markets digest CPI data and tariff retaliation
The 10-year government bond yield (interpolated) on the previous trading day was 2.141, -0.94 bps. The benchmark government bond yield (LB353A) was 2.14, -1.0 bps. Meantime, the latest closed US 10-year bond yields was 4.32, +4.0 bps. USDTHB on the previous trading day closed around 33.79, moving in a range of 33.74 – 33.77 this morning. USDTHB could be closed between 33.65 – 33.85 today. The dollar saw volatility but ended with modest gains, despite briefly dropping after the softer CPI data. The greenback's decline was short-lived, as US tariffs on steel and aluminum took effect, and the CPI report is unlikely to change the Fed's stance. The euro softened slightly, fluctuating around 1.0900 after the EU's retaliation against US tariffs, while ECB statements had little impact. The Japanese yen weakened further but recovered after USD/JPY briefly hit 149.00.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
