The US stock market is still facing risk. Market players believe the Fed may cut interest rates an additional 2 times this year, supported by a +10% rise in Tesla shares following reports of higher-than-expected car deliveries, driven by gains in tech stocks and growth stocks after the Fed chairman's report. As a result, the overall S&P500 index market closed +0.62%.
On the European stock market side, the STOXX600 index turned around and fell -0.42% after market players gradually began selling French stocks. Before entering the second round of French elections, European stock markets also faced pressure from a decline in healthcare stocks, notably Novo Nordisk -1.1% after President Jo. America's Biden asked the company to reduce the price of diabetes and weight loss drugs.
As for the bond market, the US 10-year bond yield fell to 4.44%. Although the Fed may cut interest rates twice this year, US 10-year bond yields still received some support from the latest jobs report, which came out higher than expected. Until the market believes that the Fed will actually start cutting interest rates, we estimate that the US 10-year bond yield will fluctuate around 4.40%-4.50% over this period. Even if we see a clear decline in bond yields, we will reiterate the same point that every time the US 10-year bond yield rises, it is an opportunity to buy progressively more attractive long-term bonds. If the outlook for Fed interest rates in the next period remains “stable” or “low” and the US 10-year bond yield rises above 4.50% again, it may be a good time to increase investment positions in long-term bonds.
On the currency market side the value of the dollar gradually fell. The comments of market players who still believe that interest rates can be cut 2 times this year after learning about the recent statement of the chairman of the central bank amid the risk exposure of the US financial market compared to major currencies. As a result, the overall dollar index (DXY) based on gold prices fell to 105.7 points (oscillating in a range of 105.6-106.1 points). The timing of the downward correction in both the dollar and the US 10-year bond yield helped gold prices (the COMEX gold contract for delivery in August) return to the $2,340 an ounce level, allowing some market players to sell gradually and take some profits. This transaction flow contributed to Pat's small valuation.
Today, market players are waiting to assess the Fed's outlook for monetary policy. With the release of key US economic data such as the ISM PMI services sector index in June, including ADP's total private sector employment, it is awaited to follow reports from central bank officials.
On the Asian side, market players will await the Caixin PMI report on China's services sector. After an early week in June, the latest Caixin PMI manufacturing index came out better than expected. This has led market players to regain confidence in China's economic recovery. We estimate that the Caixin PMI index report for the services sector may cause the Chinese Yuan (CNY) to gradually strengthen somewhat. The said data came out better than expected and reflected a better economic recovery.
We assess the trend in the value of the baht as there is a risk that the baht will fluctuate within a wide range. The reports include key economic data from the US side, including the ISM PMI index, services sector and private sector employment. This Friday may help reflect the trend of Nonfarm Payrolls, in addition, volume of transactions in the financial market may be lighter. Especially on the US side as US economic data came out worse than expected heading into the 4th of July holiday season. Or reflect a clearer picture of an economic slowdown that could put pressure on the dollar and US 10-year bond yields. For poetry, it can be empowering. With the increase in the price of gold
However, we believe that before the market receives the US economic data report, we should be wary of Chinese economic data report fluctuations such as the Chinese Yuan (CNY) volatility and the Caixin PMI index for the services sector after weakening. , testing the short-term resistance zone, if Chinese economic data comes out worse than expected this could put pressure on the yuan to weaken past the short-term resistance level. As a result, the economic picture of Asian currencies will depend on the Chinese economy. Additionally, we believe that during the day, the volatility of foreign investors' financial flows could be another factor devaluing the baht. or could not continue to appreciate until foreign investors sold Thai assets
We maintain the same view that the bot still moves accordingly and is prone to volatility. As a result of changes in factors affecting the direction of the bond, such as market players' views on the Fed interest rate trend, market players must use different strategies to hedge risks. Using instruments such as options or local currency. This will increase efficiency in hedging exchange rate risk.
Looking at the baht today, it is expected to be in the 36.75-36.90 baht/dollar range before the market receives key US economic data reports.
And valuing the 36.60-37.00 baht/dollar range while the market gradually receives important US economic data reports.