US eases Huawei ban, Thailand grows slowest since 2014
Against the dollar, Thai baht traded between 31.44-31.77 last week, less volatile than the week earlier, 31.54-31.93. It closed at 31.75 on Friday (17 May), weaker than the earlier Friday (10 May), 31.59.
After restricting US tech firms to do businesses with Huawei, the US granted a 90-day exemption to permit continuous operations for existing Huawei suppliers and customers. Despite no immediate response, Huawei has prepared a backup operating system so-called ‘HongMeng’ since 2012, which could replace Android amid the US-China tech cold war.
Regarding the US corporate debts rising to the pre-2009-crisis level, Fed Chairman Powell said, although the current risk level was considered ‘moderate’, another sharp increase in the debt level could add vulnerabilities while cautions were needed.
As Brexit resolution discussions are ongoing, UK Finance Minister Hammond said that Brexit, if to occur, required an agreed deal since a no-deal Brexit could harshly damage the British economy.
This week, interesting economic releases include FOMC minutes, Q1 GDP growth of Germany, the euro zone’s largest economy, Japan’s inflation after its unexpectedly better-than-expected Q1 GDP was released yesterday, and Thailand’s trade balance as well as exports and imports.
Meanwhile, reported this morning, Thailand’s Q1 GDP growth, mainly driven by falling exports, was as low as 2.8%, compared to the previous year. To remark, this growth rate is the lowest pace since 2014.
Moving between 31.83-31.87 this morning, USDTHB could be between 31.5-32 this week 31.8-31.9 today.
US treasury yields rise amid stalling US-China and ahead of FOMC minutes
Thai 10-year government bonds (LB28DA) on Friday yielded 2.449%, +1.94 bps.
Thai and US 10-year government bond yields on Friday closed at 2.537%, +1.52 bps, and 2.41%, +2.0 bps, respectively.
As the US-China trade talks are stalling and the FOMC minutes are to be released, US treasury yields rose.
Thai 10-year government bonds (LB28DA) could yield between 2.4-2.5% this week and 2.43-2.46% today.
Sources: bangkokbiznews, BBC, Bloomberg, CNBC, CNN, Investing.com, Reuters