US-China first contact after G20, Labour backs Bremain

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US-China first contact after G20, Labour backs Bremain

Against the dollar, Thai baht on the previous trading day moved between 30.77-30.86 and closed around 30.83.

After the G20 Osaka summit, the US and China just had their first contact among top officials, USTR Lighthizer, US Treasury Secretary Mnuchin, China’s Vice Premier Liu He, and Commerce Minister Zhong Shan, to refresh trade negotiations. Despite a trade deal questionable to happen, they are trying to resolve trade disagreements in order to evade further deepening trade war.

Aside from the trade talk resumption, the US would issue licenses to US companies in doing businesses with blacklisted Huawei, conditional on no threat to national security.

Ahead of Fed Chair Powell testimony before the Senate Committee today and tomorrow, Goldman Sachs said that rate cuts, already expected by markets, would not cause stocks to markedly rally. Meanwhile, Philadelphia Fed President Harker, a non-voting member of FOMC, did not see rate move in any direction.

From the EU’s latest monthly Ecofin meeting, EU finance ministers showed supports for EU nominating Lagarde to be the next ECB president. Moreover, France’s finance minister also encouraged EU improvement in order to compete with the US and China, particularly on euro’s international role and the region’s technological advancement.

To campaign Bremain, Labour Party is backing a second Brexit referendum on a Conservative Brexit, either with or without a deal. In addition, from a survey, more than half of UK firms with foreign staff were afraid of post-Brexit immigration policy. Due to deteriorating economic outlook as well as a possible no-deal Brexit, the sterling’s value reached its 2-year low against the dollar, while its 6-month low against the euro.

Moving around 30.82-30.85 this morning, USDTHB could be between 30.79-30.89 today.

 

US treasuries relatively flat ahead of Powell testimony

Thai benchmark government bond yield (LB28DA, 9.5 years) on the previous trading day was 1.98%, -0.34 bps. Thai and US 10-year bond yields on the previous trading day closed at 2.02%, -0.13 bps, and 2.07%, +2 bps, respectively.

Awaiting Fed Chair Powell testimony on monetary policy and the state of economy, US treasuries were relatively flat.

On US yield curve inversion, US 10-year-3-month treasury spread remained negative, 10-year: 2.07% v 3-month: 2.26%, thus spread: -19 bps, compared to -21 bps on the earlier trading day, while 10-year-2-year treasury spread was still well positive, +15 bps.

Thai benchmark government bond yield (LB28DA, 9.5 years) could be between 1.97-1.99% today.

 

Sources: Bangkokbiznews, BBC, Bloomberg, CNBC, CNN, Financial Times, Investing.com, Reuters, South China Morning Post

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