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Daily Market Insight: 7 December 2022

7 Dec 2022
  •   USDTHB: moving in the range 35.09-35.16 this morning, supportive level at 35.00 resistance level at 35.20

·         SET Index: 1,633.0 (-0.53%), 6 Dec 2022

·         S&P 500 Index: 3,941.3 (-1.45%), 6 Dec 2022

·         Thai 10-year government bond yield (interpolated): 2.64 (-2.73

bps), 6 Dec 2022

·         US 10-year treasury yield: 3.51 (-9.0 bps), 6 Dec 2022

 

  • U.S. services industry regains steam; factory orders accelerate
  • UK construction growth ebbs away as economy falters
  • Japan Oct household spending rises for 5th straight month
  • Oil prices fall on economic fears, dollar strength

 

U.S. services industry regains steam; factory orders accelerate U.S. services industry activity unexpectedly picked up in November, with employment rebounding, offering more evidence of underlying momentum in the economy as it braces for an anticipated recession next year. The survey from the Institute for Supply Management (ISM) on Monday followed on the heels of news last Friday that the economy continued to create jobs at a solid clip in November, with wage growth accelerating. Consumer spending also rose strongly in October. The flow of strong data raises the risk that the Federal Reserve will continue hiking interest rates and lift its policy rate to a higher level than the recently projected 4.6%, where it could stay for some time. The U.S. central bank's rate-hiking cycle is the fastest since the 1980s.

 

UK construction growth ebbs away as economy falters Growth in Britain’s construction industry slowed to a crawl in November as high borrowing costs and the gloomy economic outlook crimped building work, a survey showed on Tuesday. The S&P Global/CIPS UK Construction Purchasing Managers’ Index (PMI) fell to a three-month low of 50.4 from 53.2 in October, barely above the 50-dividing line between growth and contraction. A Reuters poll of economists had pointed to a reading of 52.0. The housebuilding sector stagnated, while civil engineering activity deteriorated. The survey’s gauge of future activity sank to its lowest level since the onset of the COVID-19 pandemic, consistent with recession.

 

Japan Oct household spending rises for 5th straight month Japanese household spending rose for a fifth straight month in October from a year earlier, data showed on Tuesday, as easing coronavirus cases prompted more people to shop and eat at restaurants. An improvement in consumer spending, which accounts for more than half of the economy, is seen as vital for the nation's economic growth. Accelerating inflation, however, propelled by a weak yen amid a tepid recovery in wages cloud the outlook. The nation's real wages posted their biggest fall in more than seven years in October on relentless inflation. Household spending grew 1.2% in October from a year earlier, government data showed, slightly better than economists' median estimate of 1.0%.

 

Oil prices fall on economic fears, dollar strength The 10-year government bond yield (interpolated) on the previous trading day was 2.64, +2.73 bps. The benchmark government bond yield (LB31DA) was 2.485, +5.50 bps. LB31DA could be between 2.40-2.90. Meantime, the latest closed US 10-year bond yields was 3.51, -2.0 bps. USDTHB on the previous trading day closed around 35.05 Moving in a range of 35.06-35.16 this morning. USDTHB could be closed between 34.90-35.20 today. Oil prices fell in a volatile market on Tuesday as the U.S. dollar stayed strong and economic uncertainty offset the bullish impact of a price cap placed on Russian oil and the prospects of a demand boost in China. Brent crude futures were down 61 cents, or 0.74%, to $82.07 a barrel. West Texas Intermediate crude (WTI) fell 51 cents, or 0.66%, to $76.42. Earlier in the session, both contracts fell by more than $1, while Brent rose by more than $1 in Asian trading. Crude futures on Monday recorded their biggest daily drop in two weeks after U.S. services industry data indicated a strong U.S. economy and drove expectations of higher interest rates than recently forecast. The U.S. dollar index edged lower on Tuesday but was still buoyed by bets of higher interest rates, following the biggest rally in two weeks on Monday.

 

Sources : ttb analytics , Bloomberg, CNBC, Trading economics, Investing, CEIC