- USDTHB: moving in the range 33.57-33.58 this morning supportive level at 33.50 resistance level at 33.70
- SET Index: 1,189.7 (+1.1%), 19 Mar 2025
- S&P 500 Index: 5,675.3 (+1.1%), 19 Mar 2025
- Thai 10-year government bond yield (interpolated): 2.104 (-2.89 bps), 19 Mar 2025
- US 10-year treasury yield: 4.25 (-4.0 bps), 19 Mar 2025
- Fed holds rates steady, sees slower growth and higher Inflation
- The BOJ keeps interest rates steady as expected
- Eurozone February inflation estimate lowered due to Germany revision
- Dollar pares gains as Fed holds rates and lowers growth forecasts
Fed holds rates steady, sees slower growth and higher Inflation
The Federal Reserve kept rates unchanged at 4.25%-4.5%, as expected, and maintained its median dot plot, which still forecasts two rate cuts in 2025. The Fed removed language about balanced risks and noted increased economic uncertainty. Projections for 2025 and 2026 growth were lowered, with higher unemployment and PCE forecasts. Powell reiterated a wait-and-see approach, stressing that the Fed isn't rushing to adjust policy. He emphasized uncertainty and cautioned against overinterpreting Fed forecasts. He also indicated that the central bank did not deem it necessary to take significant action in response to US tariffs, noting that their effect on consumer prices could be "transitory." Regarding the balance sheet, the Fed announced plans to reduce the pace of its runoff starting in April, lowering the monthly Treasury redemption cap from USD 25 billion to USD 5 billion, while keeping the cap for MBS redemptions at USD 35 billion.
The BOJ keeps interest rates steady as expected
The Bank of Japan (BoJ) kept its short-term interest rate at 0.5%, as expected, with a unanimous vote. It noted a moderate recovery in Japan's economy, driven by rising consumption and inflation expectations. The central bank also added US trade policies to its list of risks. The BoJ remains cautious about the impacts on financial and FX markets but expects continued economic growth. At the press conference, Governor Ueda emphasized multiple times that domestic data largely aligned with the outlook, with wages slightly stronger than expected but still within the anticipated range. He provided little insight into the timing of the next rate hike but mentioned that the BoJ does not necessarily need to wait for complete clarity on the impact of U.S. tariffs before taking action.
Eurozone February inflation estimate lowered due to Germany revision
Euro-area inflation slowed more than initially reported, reinforcing the case for the ECB to continue reducing interest rates. The CPI increased by 2.3% annually, lower than the 2.4%, due to a revision following an unexpected decline in Germany's inflation rate. However, there are still risks that inflation could rise again, as trade tensions with the US and a surge in defense and infrastructure spending could push prices up more rapidly.
Dollar pares gains as Fed holds rates and lowers growth forecasts
The 10-year government bond yield (interpolated) on the previous trading day was 2.104, -2.89 bps. The benchmark government bond yield (LB353A) was 2.11, -2.0 bps. Meantime, the latest closed US 10-year bond yields was 4.25, -4.0 bps. USDTHB on the previous trading day closed around 33.64, moving in a range of 33.57 – 33.58 this morning. USDTHB could be closed between 33.50 – 33.70 today. The dollar was mostly stronger against other currencies, though its gains were reduced after the Fed's announcement, which left the FFR unchanged as expected and decided to slow the pace of Treasury securities runoff. Fed Chair Powell also reiterated his earlier stance from January, stressing there was no urgency to cut rates. The euro weakened with early dollar strength but later recovered, reclaiming the 1.0900 level. The Japanese yen weakened as the BoJ kept rates steady but strengthened after Ueda's hawkish tone and a decline in risk sentiment. In response to the FOMC decision, the currency overall appreciated, with USD/JPY falling below 149.00 as US yields eased after the FOMC meeting.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
