The Baht hit a 3-week low, after having risen early in the week on the back of stronger Asian currencies, led by the Yuan. The Chinese currency was supported by expectations that pressures on the Chinese economy will likely ease after a relaxation of lockdown measures. The Baht tumbled later on net foreign stock and bond selling-orders, while the US dollar rose along with the US Treasury yields. The US 10-year bond yield surged to above 3.0% amid expectations that the Fed would raise the policy rate further in the second half of the year.
The Baht's response to the BOT's MPC meeting outcome was muted, although the MPC meeting signaled the likelihood of a policy rate hike in 3Q-2022, thanks to steady improvements seen in the Thai economy and upside risk to inflation.
On Friday, June 10, 2022, the Baht closed at THB34.76/USD, compared to the THB34.34/USD reported for Thursday, June 2, 2022. Meanwhile, foreign investors sold THB5,890 million in Thai stocks and net outflows in the Thai bond market were recorded at THB10,711 million (net selling of THB5,022 million in Thai bonds plus THB5,689.10 million of maturing bonds) during the week of June 6-10, 2022.
During the week of June 13-17, 2022, KBank expects that the Baht will move within a range of THB34.40-35.10/USD. KResearch views that key factors to be monitored closely are the FOMC meeting and its new economic projection and dot plot, as well as foreign fund flows. Meanwhile, the US economic data to be released include PPI, retail sales, housing starts, industrial production data for May, NY Fed and Philly Fed manufacturing surveys, the housing market Index for June, and weekly jobless claims data. Market participants may eye the BOE and BOJ meetings, as well as Chinese economic data for May, including industrial production, retail sales, fixed asset investment and unemployment rate.
Stock Market
The Thai stock market fluctuated throughout the week. The SET Index dropped sharply early in the week on concerns that the Thailand's accelerated inflation rate would affect the Thai economy. However, the SET Index rose briefly around midweek, driven primarily by bank stocks, as the MPC voted unanimously to maintain the policy rate at 0.5%, reflecting the likelihood of Thailand's policy rate hikes in the near future. It then fell again towards the end of the week in line with other stock markets, after the ECB signaled that it would tighten its monetary policy.
On Friday, June 10, 2022, the SET closed at 1,632.62 points, down 0.91% over-week. The average daily trading value was THB63,672.81 million, down 13.13% over-week. The mai closed at 642.79 points, up.1.79% over-week.
June 13-17, 2022, KSecurities expects the SET to have support at 1,620 and 1,600 points, but resistance at 1,650 and 1,665 points, respectively. KResearch views that key matters to watch include the upcoming FOMC meeting (June 14-15), the COVID-19 situation, foreign fund flows, Russia-Ukraine tensions, plus Thailand's CCSA meeting. The US economic data that warrant close monitoring include May PPI, Retail Sales, Housing Starts and Industrial Production. Close attention must also be paid to the upcoming BOE and BOJ meetings, Eurozone's May CPI, plus China's May economic data such as Retail Sales and Fixed Asset Investment..