US rate hike would mean 'no Thai rate cut'

[webfact]

'US rate hike would mean no Thai rate cut'
ERICH PARPART
THE NATION

BANGKOK: -- BETTER-THAN-EXPECTED job numbers in the US should result in the Federal Reserve hiking interest rates on Wednesday, a rate-normalising move that would prevent the Bank of Thailand delivering another rate cut this year, leading economists said.

Uwe Parpart, chief strategist and head of research at the Reorient Group, said the rosier jobs situation in the US and the markets' favourable reaction to that pointed to a rate rise.

"A Fed rate hike on December 16, barring some horror event, is now a foregone conclusion, and markets would rather see a stronger than a weaker [uS] economy as the inevitable comes to pass," Parpart said.

However, he said the Reorient Group was not persuaded that the stronger job numbers "portend stronger US growth".

He said the optimistic market reaction to the jobs situation was not due to expectations the US economy would grow above 2 per cent but probably because the predicted federal funds rate would be less than 1.4 per cent in two years' time as implied by the 24 months Fed futures.

That translated into continued near-zero real rates for what was a long time in the world of finance.

The US economy generated 211,000 new jobs in November, 11,000 higher than expected, while the October number was revised up from 271,000 to 298,000.

Parpart said the US employment report reinforced the market's conviction that the Fed would be extremely cautious about raising interest rates after it was expected to do so last month. The US unemployment rate remained at 5 per cent last month.

"Although 12-month futures show an expected fed funds rate of 0.8 per cent a year from now, the highest in the present cycle, 24-month futures predict a rate two years from now of less than 1.4 per cent, down from a peak of 1.6 per cent. If the Fed stops at around 1.25 per cent, the US stock market won't be too miserable," he said.

Tim Leelahaphan, Maybank Kim Eng Securities (Thailand) economist and assistant vice president of research Department, said: "The imminent US Fed fund rate normalisation in December has closed the window to a rate cut [in Thailand] and fiscal policy is a more effective tool to stimulate the economy than lower borrowing rates."

The BOT's Monetary Policy Committee slashed the benchmark lending rate in March and in April.

The policy interest rate will most likely stay at 1.5 per cent for the rest of this year. The committee is next meeting on December 16. He added that the reasons for the Stock Exchange of Thailand Index slump this month was partly due to the imminent US rates normalisation and a further drop in global oil prices.

Source: http://www.nationmultimedia.com/business/US-rate-hike-would-mean-no-Thai-rate-cut-30274671.html


-- The Nation 2015-12-11

[JoePai]

BOT needs to increase the rate

[bangkapi]

All government agency numbers are fudged/fiction/phony.

[IMA_FARANG]

[uli65]

increase the rate??? are you kidding

thai people can not pay their huge debts now. you are really expert joepai

[Dumbastheycome]

211,000 new jobs. And does anybody know the birth numbers ?( 325000 average) Deaths? (2160000) Net immigration ? ( 800000 approx average annual ).

If quoting numbers as indicitive they need to be relevent to reality !

[Pib]

If you want more details on the U.S. Nov 15 employment report, it's at this U.S. Bureau of Labor Statistics page.

[konying]

increase the rate??? are you kidding

thai people can not pay their huge debts now. you are really expert joepai

I did not realize BOT sets interest rates based on what people can afford

[IMA_FARANG]

A funny thing.

When I read this article this morning the Dollar Baht rate was 35.85 Baht to a dollar.

Right now as I type this the same source has a rate of 36.14 Baht to a dollar.

Looks to me like somehow the Baht is actually weaker now than 10 hours ago.

Funny how predictions seem to go isn't it.?

Guess you never really can tell, can you?

Edited December 11, 2015 by IMA_FARANG

[uli65]

konying! I am happy for you that you realize everything about BOT.

[Pib]

A funny thing.

When I read this article this morning the Dollar Baht rate was 35.85 Baht to a dollar.

Right now as I type this the same source has a rate of 36.14 Baht to a dollar.

Looks to me like somehow the Baht is actually weaker now than 10 hours ago.

Funny how predictions seem to go isn't it.?

Guess you never really can tell, can you?

Based on some TV/newsprint articles I've read the baht probably dropped (along with numerous other emerging economies currencies) because of China unveiling an offshore multi-currency index which has caused the yuan to weaken against the USD which in turn drags along many emerging market currencies. See below Bloomberg story. You just never know what unexpected event may come along to further cloud crystal ball predictions.

http://www.bloomberg.com/news/articles/2015-12-11/offshore-yuan-weakens-as-china-unveils-multi-currency-index

The yuan declined the most since August in offshore trading as China published a new index that values it against a broad range of currencies.

The move by the China Foreign Exchange Trade System spurred speculation that policy makers want to reduce the currency’s link to the dollar and let it weaken further. The offshore yuan fell 0.5 percent to 6.5317 per dollar as of 4:39 p.m. in New York, the lowest level on a closing basis since April 2011.

[elgordo38]

All government agency numbers are fudged/fiction/phony.

Another government soothsayer with a tire pump. He is describing a no loose trip to Las Vegas. Just biding/passing time waiting for messages from abroad/above??

[elgordo38]

They should not count your post unless you say something. Yeah I know a picture is worth a 1000 words especially in Thailand.

[elgordo38]

211,000 new jobs. And does anybody know the birth numbers ?( 325000 average) Deaths? (2160000) Net immigration ? ( 800000 approx average annual ).

If quoting numbers as indicitive they need to be relevent to reality !

Don't you know how they arrive at these "spectacular numbers"?? They hit the street and ask the first passerby to pick a number between 1 and 500,000 thats the number of new jobs created. These numbers will not work for the local lottery or will they? Hot off the press unemployment claims climbed this week.

Edited December 12, 2015 by elgordo38

[elgordo38]

If you want more details on the U.S. Nov 15 employment report, it's at this U.S. Bureau of Labor Statistics page.

What heading do I look under "Stranger than fiction"?

[elgordo38]

A funny thing.

When I read this article this morning the Dollar Baht rate was 35.85 Baht to a dollar.

Right now as I type this the same source has a rate of 36.14 Baht to a dollar.

Looks to me like somehow the Baht is actually weaker now than 10 hours ago.

Funny how predictions seem to go isn't it.?

Guess you never really can tell, can you?

Based on some TV/newsprint articles I've read the baht probably dropped (along with numerous other emerging economies currencies) because of China unveiling an offshore multi-currency index which has caused the yuan to weaken against the USD which in turn drags along many emerging market currencies. See below Bloomberg story. You just never know what unexpected event may come along to further cloud crystal ball predictions.

http://www.bloomberg.com/news/articles/2015-12-11/offshore-yuan-weakens-as-china-unveils-multi-currency-index

The yuan declined the most since August in offshore trading as China published a new index that values it against a broad range of currencies.

The move by the China Foreign Exchange Trade System spurred speculation that policy makers want to reduce the currency’s link to the dollar and let it weaken further. The offshore yuan fell 0.5 percent to 6.5317 per dollar as of 4:39 p.m. in New York, the lowest level on a closing basis since April 2011.

They want to transform from an export driven society to a consumer driven society. I wonder how that can be accomplished when the average Chinese makes $3 a day and believes that his mattress is the safest bank in the world. Harry Houdini where are you we need a rabbit desperately. This whole thing looks like sleight of hand to me.

[jacksam]

Can I ask an aside question. Since it seems USA will have rise in base rate this Wednesday, should we convert our currency (in my case aud) into baht now?

Edited December 14, 2015 by jacksam

[Gutenberg]

Can I ask an aside question. Since it seems USA will have rise in base rate this Wednesday, should we convert our currency (in my case aud) into baht now?

Better wait, I think we will see 1:36.9 soon .

[Dumbastheycome]

A funny thing.

When I read this article this morning the Dollar Baht rate was 35.85 Baht to a dollar.

Right now as I type this the same source has a rate of 36.14 Baht to a dollar.

Looks to me like somehow the Baht is actually weaker now than 10 hours ago.

Funny how predictions seem to go isn't it.?

Guess you never really can tell, can you?

Based on some TV/newsprint articles I've read the baht probably dropped (along with numerous other emerging economies currencies) because of China unveiling an offshore multi-currency index which has caused the yuan to weaken against the USD which in turn drags along many emerging market currencies. See below Bloomberg story. You just never know what unexpected event may come along to further cloud crystal ball predictions.

http://www.bloomberg.com/news/articles/2015-12-11/offshore-yuan-weakens-as-china-unveils-multi-currency-index

The yuan declined the most since August in offshore trading as China published a new index that values it against a broad range of currencies.

The move by the China Foreign Exchange Trade System spurred speculation that policy makers want to reduce the currency’s link to the dollar and let it weaken further. The offshore yuan fell 0.5 percent to 6.5317 per dollar as of 4:39 p.m. in New York, the lowest level on a closing basis since April 2011.

They want to transform from an export driven society to a consumer driven society. I wonder how that can be accomplished when the average Chinese makes $3 a day and believes that his mattress is the safest bank in the world. Harry Houdini where are you we need a rabbit desperately. This whole thing looks like sleight of hand to me.

And why not? The US did it already.And bankrupted itself in the process.

[Pib]

I must have missed the news on the US bankrupt filing. Amazing the USD is still doing so good if they are broke.

[Berkshire]

I must have missed the news on the US bankrupt filing. Amazing the USD is still doing so good if they are broke.

Some people continually predict the demise of the USA. Perhaps if they can live for another 500 years or so, it may happen.

[IMA_FARANG]

I must have missed the news on the US bankrupt filing. Amazing the USD is still doing so good if they are broke.

------------------------

Never try to argue with an ignorant man, you can't convince them, and eventually they will just drag you down to their ignorance level.

[Gutenberg]

Afghanistan 6.60% Debt/GDP - must be a rich country while EU 90% and USA 100%. Wonder why all those immigrants want to come to EU/US.

Honestly, since when our capitalist debt enslaving system was made to pay back the debt? We can talk about that in a post compound interest age.

So, in the current cold war the USA is winning. Nobody cares about the poor people on welfare, it is all about an economical war against other countries.

[Dumbastheycome]

I must have missed the news on the US bankrupt filing. Amazing the USD is still doing so good if they are broke.

------------------------

Never try to argue with an ignorant man, you can't convince them, and eventually they will just drag you down to their ignorance level.