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Daily Market Insight: 20 September 2023

20 Sep 2023
  •   USDTHB: moving in the range 36.06-36.09 this morning supportive level at 35.95 resistance level at 36.15

·         SET Index: 1,523.0 (-0.30%), 19 Sep 2023

·         S&P 500 Index: 4,444.0 (-0.14%), 19 Sep 2023

·         Thai 10-year government bond yield (interpolated): 3.14 (+11.51 bps), 19 Sep 2023

·         US 10-year treasury yield: 4.37 (+5.00 bps), 19 Sep 2023


  • US housing starts hit three-year low; surge in permits point to underlying strength
  • Euro zone Aug inflation revised slightly down
  • Bank of England likely to hike rates for 15th time, signals suggest peak nearing
  • Dollar drifts higher as traders look to upcoming Fed decision


US housing starts hit three-year low; surge in permits point to underlying strength U.S. homebuilding plunged to a more than three-year low in August as a resurgence in mortgage rates weighed on demand for housing, but a jump in permits suggested new construction remained supported by a dearth of homes on the market. Housing starts tumbled 11.3% to a seasonally adjusted annual rate of 1.283 million units last month, the lowest level since June 2020. Data for July was revised lower to show starts accelerating to a rate of 1.447 million units instead of the previously reported 1.452 million units. Economists polled by Reuters had forecast starts would slip to a rate of 1.440 million units. Permits for future homebuilding jumped 6.9% to a rate of 1.543 million units, the highest since October 2022. They were boosted by a 14.8% surge in multi-family housing permits to a rate of 535,000 units.


Euro zone Aug inflation revised slightly down Euro zone consumer inflation in August was slightly lower than initially estimated, the European Union's statistics office Eurostat said, but still remained more than twice the European Central Bank's target. Eurostat said inflation in the 20 countries sharing the euro was 0.5% month-on-month in August and 5.2% year-on-year, lower than the flash estimate of 5.3% year-on-year reported on Aug 31. The ECB wants to keep inflation at 2.0% in the medium term. Eurostat said core inflation, which excludes volatile prices of energy and unprocessed food, was 0.3% month-on-month in August and 6.2% year-on-year, in line with initial estimates. An even narrower measure of inflation, which also excludes alcohol and tobacco and is watched by many economists, was 0.3% on the month and 5.3% year-on-year.


Bank of England likely to hike rates for 15th time, signals suggest peak nearing The Bank of England is anticipated to raise interest rates this Thursday for the 15th consecutive time, potentially pushing the rate to 5.5%. This move, expected by the market, has projected a 70% likelihood of a 25-basis-point hike. However, indications from the Monetary Policy Committee (MPC) suggest that this could be the final increase in the current series. Governor Andrew Bailey and Chief Economist Huw Pill have hinted that interest rates may be nearing their peak, metaphorically referred to as "Table Mountain." Despite these indications, there's no certainty that the MPC will halt its tightening policy. The decision will hinge on whether the committee assesses that sufficient monetary tightening has already occurred. Market sentiment widely anticipates a "one and done" scenario with this potential rate hike.


Dollar drifts higher as traders look to upcoming Fed decision The 10-year government bond yield (interpolated) on the previous trading day was 3.14, +11.51 bps. The benchmark government bond yield (LB31DA) was 3.02, +12.00 bps. Meantime, the latest closed US 10-year bond yields was 4.37, +5.00 bps. USDTHB on the previous trading day closed around 35.84. Moving in a range of 36.06-36.09 this morning. USDTHB could be closed between 35.95-36.15 today. The U.S. dollar edged higher against a basket of currencies on Tuesday as traders awaited a raft of central bank interest rate decisions this week, including one by the Federal Reserve on Wednesday. The dollar index was up 0.05% at 105.13, not far from the six-month high of 105.43 touched on Thursday. The index rose for its ninth straight week last week, its longest winning streak in nearly a decade. Resilient U.S. growth has fueled a rebound in the dollar in recent weeks though the rally will likely be tested by a gauntlet of data and Wednesday's Fed interest rate decision. The dollar came under pressure against the euro earlier on Tuesday following a report that indicated the European Central Bank may soon start discussing how to drain some of the excess liquidity in the banking system, while the yen wallowed near 10-month lows against the dollar.


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