Krungthai GLOBAL MARKETS reveals a path that opened at 36.46, tracking the political situation.

Mr. Poon Panichpipun, Money Market Strategist, Krungthai Global Markets, Krung Thai Bank This week the baht range is expected to be 36.25-36.85 baht/dollar and today's range is expected to be 36.40-36.55 baht/dollar from today's (July 8) morning opening. dollar. Valued from the previous weekend's level of 36.56 baht per dollar. The baht has been gradually strengthening since last Friday (oscillating in the range of 36.43-36.60 baht per dollar) following a period of dollar contraction and US 10-year bond yields after reporting US labor market data. The latest reflects a further slowdown in the US labor market. Total employment outside agriculture or non-farm payrolls increased by +206,000 positions, slightly better than expected. But more than -100,000 positions were cut in the number of jobs announced in the previous two months, while the unemployment rate rose to 4.1%, while the rate of wage growth (average hourly earnings) continued to slow. At +3.9%y/y as expected by the market, the baht was supported by the flow of gold trading transactions. Gold prices (XAUUSD) continued to rise and remained in the price zone of 2,380-2,390 dollars per ounce.

The dollar weakened last week following reports of US economic data. Most of the results have been worse than expected. And the rebound of European currencies has eased the political situation in Europe

We estimate that we should be cautious about the volatility coming from the second round of the French parliamentary elections and Thai political issues this week. Stay tuned for the US CBI Inflation Report and the Fed Chairman's Report to Congress.

As for Pat's trend, we see that the momentum of its appreciation has regained strength. But appreciation may be lacking. Until the market learns about additional new factors, you should be careful about the country's political situation, which may put pressure on the flow of foreign investors' funds. And the Chinese Yuan (CNY) has the most impact on the baht during this period.

Given the country's political scenario, this will be a key factor closely followed by market players. There will be a hearing on July 10 to consider the case of Prime Minister Chetha Tavis by the Constitutional Court. In terms of economic data, we estimate that the June Consumer Confidence Index may continue to decline to 60 points or slightly lower. As per concerns about the country's economic trends and political situation. It may affect government's economic stimulus policies like digital wallet.

Contrary to market expectations for the dollar, we think the dollar may find some support at the start of the week if the National Rally party wins more than half of the seats in the French parliament. Put downward pressure on the Euro (EUR), but if US CPI inflation comes in lower than expected/lower than expected this could depress the dollar somewhat over the weekend.

Global Economic Perspective
▪US side – June CPI inflation and PPI inflation reports will be highlighted. If such economic data reports reflect a further slowdown in inflation, it could make market players more optimistic. The central bank may cut interest rates twice this year, but financial markets will remain buoyant. Market players have recently given a 95% chance (CME FedWatch Tool) that the Fed will cut interest rates twice. This picture has already been priced in, which makes us think we will see more movement in financial markets such as the dollar and US bond yields. And you might want to look at the reports on the US economic data that has declined. It's clearly getting worse. (or a slower-than-expected inflation rate) In addition to the aforementioned economic data reports, market players are expecting a more than 3-fold cut in federal interest rates. Market players will follow statements from central bank officials. The highlight will be the central bank governor's address to Congress. In addition to the above factors, we believe that market players will start monitoring the earnings reports of listed companies, which are expected to have a significant impact on financial market conditions. If the market is confident, the central bank may cut interest rates about 2 times this year.

▪European side – The results of the second round of the French parliamentary elections (577 seats) will be an important highlight, with market players recently expecting the far-right National Rally (RN) to win a majority in parliament. But not more than half (289 seats), a figure that puts market players somewhat at ease in the French political situation. As a result, the Euro (EUR) rebounded to strengthen. However, with an increase in risky assets in Europe, the election results, which will be gradually revealed from 1:00am Thai time on Monday, will reflect more than half of the RN party parliamentary votes. This may pressure the European financial market to face risk and the Euro (EUR) may fluctuate and depreciate. In addition, market players are waiting to follow the statements of the European Central Bank (ECB) and the Bank of England (BOE).

▪Asian side – China's economy may recover gradually. This is reflected in the CPI inflation rate in June, which may increase slightly to 0.4%-0.5%, while the producer price index PPI suggests that China's exports will contract by -0.8%y/y in June. y/y, same as previous month. As for imports, a good expansion of China's trade will help economic growth based on monetary policy. The market estimates that the Reserve Bank of Malaysia (BNM), the Reserve Bank of South Korea (BOK) and the Reserve Bank of New Zealand (RBNZ) will maintain their policy rates at 3.00%, 3.50% and 5.50% respectively, even as inflation picks up. Central banks are slowly approaching their targets but there is still risk of volatility and depreciation from the currency side. Until the central bank gradually starts lowering interest rates.

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