Kasikorn Research Center revealed that the baht is still leaning towards strengthening. Meanwhile, Thai stocks partially recovered after falling to a 3-year and 9-month low.
Summary of the movement of the baht value The baht is still tending to strengthen. Even the movement is volatile during the week.
The baht hit a six-and-a-half-month high of 35.05 baht per dollar early in the week amid selling pressure on the dollar after U.S. labor market data for July came in worse than market expectations, boosting chances of the Federal Reserve starting to cut interest rates at its September meeting.
However, the baht weakened in the middle of the week due to political factors in the country. While the dollar recovered after the dollar repurchase pressure. After the US ISM service sector index numbers rose more than the market expected, along with senior officials from the Federal Reserve indicating that although the Fed may have a tendency to cut interest rates in the near future, the risk of a US economic recession remains at a low level at this time.
The baht rose again over the weekend as promised. Fundflow is buying Thai bonds from foreign investors. In addition, there is additional support from the rise in gold prices in the global market.
Meanwhile, pressure on riskier assets has slowed somewhat, given the number of people filing for unemployment benefits in the United States. However, the results were good, which helped ease concerns about the risk of a recession in the United States.
On Friday, August 9, 2024, the baht closed in the local market at 35.22 baht per dollar. Compared with 35.36 baht per dollar. On the previous Friday (August 2, 2024), for the portfolio investment situation of foreign investors from August 5 to 9, 2024, foreign investors bought a net 423 million baht of Thai stocks and had a net inflow position entering the Thai bond market of 34.445 million baht (net purchase of bonds 34.945 million baht, discount of expired debt instruments 500 million baht).
Next week (August 12-16) Kasikorn Bank sees the baht moving at 34.90-35.70 baht per dollar. Meanwhile, Kasikorn Research Center is assessing key factors to watch, including foreign capital trends. Thai political factors, outlook for the yen and other Asian currencies including Fed officials’ comments.
Meanwhile, key US economic figures include the Producer Price Index, Consumer Price Index, Retail Sales, Industrial Production and information on housing starts in July.
The manufacturing survey was conducted by the Federal Reserve Bank of New York and the Federal Reserve Bank of Philadelphia. It includes an index of confidence and inflation expectations from the perspective of U.S. consumers in August.
In addition, the market is still waiting for the July inflation figures. England, the Q2 2024 GDP data in the Eurozone, Japan and England, and the July Chinese economic figures. Such as industrial production, retail sales, fixed asset investment and the unemployment rate.
Summary of movements in the Thai stock market
The Thai stock index fell sharply at the beginning of the week before gradually recovering over the rest of the week. Thai stocks fell about 40 points and recorded a 3-year and 9-month low of 1,273.17 points at the beginning of the week. The Thai stock market's decline is in line with foreign equity markets amid concerns about the direction of the U.S. economy after U.S. labor market data. Many came out worse than the market had expected, prompting investors to sell shares in every industry group.
Thai stocks have gradually rebounded since mid-week following the regional stocks trend. This is because investors have eased some of their concerns about the US economic issues. After several Fed officials said that the US economy is not yet inclined to enter a recession. In addition, there is the potential to buy back some shares. Especially in the telecom group due to the relatively good operating results and the announcement of dividends. And the energy group which benefited from the rise in oil prices in the global market.
However, the scope for Thai stocks to rally over the weekend was very limited. Because of the long holiday and investors are still waiting to closely follow the country's political issues next week.
The SET index closed on Friday, August 9, 2024, at 1,297.07 points, down 1.22% from the end of last week. Meanwhile, the average daily trading value reached 43,273.51 million baht, up 8.27% from the previous week. The May index fell by 3.27% to close at 312.00 points.
Next week (August 12-16) Kasikorn Securities Company Limited sees support levels at 1,290 and 1,280 points, while resistance levels are at 1,310 and 1,320 points respectively.
Kasikorn Research Center assessed the important factors to watch, including: Statement from Fed officials Domestic political issues 2Q24 operating results of Thai companies and foreign capital trend
Important US economic data includes the Producer Price Index. Consumer Price Index. Retail sales and homebuilding data for July including the number of people applying for weekly unemployment benefits.
Meanwhile, other foreign economic indicators include the second quarter 2024 GDP figures for the eurozone, England and Japan. June industrial production in the eurozone and Japan as well as July economic data from China, such as retail sales, industrial production and fixed asset investment.