- USDTHB: moving in the range 33.965-34.02 this morning supportive level at 33.80 resistance level at 34.10
- SET Index: 1,284.0 (+1.06%), 11 Feb 2025
- S&P 500 Index: 6,052.0 (-0.27%), 12 Feb 2025
- Thai 10-year government bond yield (interpolated): 2.272 (+0.37 bps), 11 Feb 2025
- US 10-year treasury yield: 4.62 (+8.0 bps), 12 Feb 2025
- US inflation beats forecasts, backing Fed's hold
- Powell tells Congress the Fed is still in no rush to lower rates
- Trump and Putin agree on Ukraine talks, signaling a change in US policy
- US dollar loses gains despite solid CPI data
US inflation beats forecasts, backing Fed's hold
The headline CPI rose by 0.467% in January, exceeding the 0.3% forecast and up from 0.393% the previous month. Year-over-year, it increased 3.0%, surpassing the expected 2.9%. The shelter index rose 0.4%, contributing nearly 30% of the monthly increase, while energy prices climbed 1.1%, with gasoline up 1.8%. Food prices went up 0.4%, driven by a sharp rise in egg prices. Core CPI rose 0.446%, above the forecasted 0.3%, and the year-over-year increase was 3.3%, slightly higher than expected. The data led to a shift in market expectations, with the next rate cut now expected in December instead of September, signaling that the Fed may need to keep rates higher longer to control inflation.
Powell tells Congress the Fed is still in no rush to lower rates
Fed Chair Powell largely reiterated his January FOMC comments, suggesting that recent data hasn't affected his policy views. He noted that uncertainty over the economic impact of Trump's policies may take time to show in the data. Powell emphasized that the Fed could maintain restraint if the economy stays strong and inflation remains below 2%, but could ease policy if the labor market weakens or inflation drops. He also reaffirmed that the inflation target remains 2%. In a political Q&A with the Senate Banking Committee, Powell said it's unclear which tariff policies will be implemented and their effects, while also noting that inflationary pressures from the labor market have eased. He believes the neutral rate has risen from the pandemic's low levels, and overall economic data is very strong. Meanwhile, on his second day of testimony, Powell stated that the Fed bases decisions on economic conditions and is waiting to assess tariff impacts. He highlighted PCE inflation over CPI and noted that rising long-term rates aren't driven by inflation, as the Fed awaits signs of lower inflation.
Trump and Putin agree on Ukraine talks, signaling a change in US policy
President Trump spoke with Russian President Putin and agreed to start negotiations to end the war in Ukraine, reversing three years of US policy and surprising European allies. Trump called the conversation "lengthy and highly productive" and said negotiations would begin immediately. He also hinted at a possible meeting with Putin in Saudi Arabia soon. Afterward, Trump spoke with Ukraine's President Zelensky, who said steps were being taken to stop Russian aggression.
US dollar loses gains despite solid CPI data
The 10-year government bond yield (interpolated) on the previous trading day was 2.272, +0.37 bps. The benchmark government bond yield (LB346A) was 2.285, +0.5 bps. Meantime, the latest closed US 10-year bond yields was 4.62, +8.0 bps. USDTHB on the previous trading day closed around 34.08, moving in a range of 33.965 – 34.02 this morning. USDTHB could be closed between 33.80 – 34.10 today. The dollar traded mixed against its peers, with the index eventually returning to flat after an initial boost from the stronger-than-expected US CPI report. However, gains were pared as markets responded to positive geopolitical updates on Russia and Ukraine. Additionally, Fed Chair Powell's testimony provided little new insight into monetary policy or the economy, though he did comment on January's CPI report, stating that inflation targets have not yet been met. The euro outperformed, briefly reaching 1.0400 against the dollar, supported by optimism about the Russia-Ukraine situation. The Japanese yen underperformed, with USD/JPY rising above 154.00 due to stronger US yields following the CPI data.
Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC
