Review of economic information week 11-15/11

The central exchange rate increased by 20 VND, the VN-Index decreased by 33.99 points (-2.71%) compared to the previous weekend, or the CPI in October increased by 0.33% compared to the previous month and increased by 2.89% compared to the same period... are some notable economic information in the week from November 11-15.

Economic news review

Overview

The consumer price index (CPI) in 2024 will almost certainly be controlled below the target threshold assigned by the National Assembly .

The General Statistics Office's socio-economic report for October and 10 months of 2024 shows that the CPI in October 2024 increased by 0.33% over the previous month, by 2.52% over December 2023 and by 2.89% over the same period last year. On average, in the first 10 months of 2024, the CPI increased by 3.78% over the same period last year.

In the 0.33% increase in CPI in October 2024 compared to the previous month, there were 10 groups of goods and services with increased price indexes and 1 group with decreased price indexes. The transportation group increased the most with 0.66%, causing the overall CPI to increase by 0.06 percentage points, mainly due to the 2.27% increase in diesel oil prices; domestic gasoline prices increased by 0.98% due to the impact of price adjustments during the month; air passenger transport prices increased by 32.75% due to increased consumer demand;...

Next, the food and catering services group increased by 0.55%, causing the overall CPI to increase by 0.18 percentage points; of which, food increased by 0.77%; foodstuff increased by 0.66%, affecting an increase of 0.14 percentage points; eating out increased by 0.19%. Theeducation group increased by 0.48%, of which the price of educational services increased by 0.53% due to some private kindergartens, colleges, vocational schools, intermediate schools, universities, and postgraduate schools increasing tuition fees. The other goods and services group increased by 0.26%. The household equipment and appliances group increased by 0.2% due to increased consumer demand and many promotional programs in some localities having ended.

The beverage and tobacco group increased by 0.11% due to increased labor costs and exchange rates. The housing, electricity, water, fuel and construction materials group increased by 0.11% mainly due to the following reasons: gas prices increased by 1.17%, the reason is that from October 1, 2024, domestic gas prices will be adjusted to increase according to world gas prices; kerosene prices increased by 1% due to the impact of price adjustments during the month; house rental prices increased by 0.73%; domestic water increased by 0.24%.

The culture, entertainment and tourism group increased by 0.09%, the price of ornamental plants and flowers increased by 1.27%; watching movies and music increased by 0.38%. The clothing, hats and footwear group increased by 0.09% due to increased shopping demand when the weather changed seasons. On the contrary, the price of household electricity decreased by 2.02% due to cool weather, so consumer demand decreased.

Core inflation in October 2024 increased by 0.23% compared to the previous month and by 2.68% compared to the same period last year. On average, core inflation in the first 10 months of 2024 increased by 2.69% compared to the same period in 2023, lower than the average CPI increase (3.78%), mainly due to the prices of food, foodstuffs, electricity, education services, medical services and gasoline, which are factors that increase the CPI but are excluded from the list of core inflation calculations.

According to the General Statistics Office, the consumer price index has been well controlled and there is still a large room for inflation control in 2024 according to the National Assembly's target. Many experts predict that the CPI in November 2024 may increase by about 0.1 - 0.15% compared to the previous month, the average CPI for the whole year will not exceed 4.0% due to many factors that reduce pressure on the price level such as: global inflation cools down, helping Vietnam reduce pressure from inflationary import channels, while helping to improve psychological factors, expectations, and support inflation control; a number of tax support policies continue to be implemented such as support for reducing environmental taxes on gasoline, reducing value added tax, contributing to reducing costs of forming prices of goods and services...; the supply of food and foodstuffs is still quite abundant; a major factor is that demand is still quite weak, consumers are still cautious in spending...

On the contrary, there are still some factors putting pressure on the price level in the remaining months of 2024 such as: steel and cement prices increase due to increased input material prices; prices of raw materials, goods and essential consumer services may increase slightly during the year-end holidays; public investment in the last months of this year is very large to complete the Medium-term Public Investment Plan; when public investment increases, it leads to increased investment from the private sector and foreign investment; if there is not enough construction materials and accompanying equipment, the prices of this group of goods will increase, creating the effect of increasing prices of many other goods...

Domestic market summary week from November 11-15

In the foreign exchange market, during the week of November 11-15, the central exchange rate continued to be adjusted by the State Bank in an upward trend. At the end of November 15, the central exchange rate was listed at 24,298 VND/USD, an increase of 20 VND compared to the previous weekend session.

The State Bank of Vietnam's transaction office continues to list the USD buying and selling rates at 23,400 VND/USD and 25,450 VND/USD.

The interbank USD-VND exchange rate fluctuated between increases and decreases during the week from November 11 to 15. At the end of the session on November 15, the interbank exchange rate closed at 25,392, a sharp increase of 117 VND compared to the previous weekend session.

The dollar-dong exchange rate on the free market also fluctuated up and down through the sessions. At the end of the session on November 15, the free exchange rate increased by 100 VND in the buying direction while decreasing by 90 VND in the selling direction compared to the previous weekend session, trading at 25,600 VND/USD and 25,710 VND/USD.

Interbank money market, week from November 11-15, interbank VND interest rates increased sharply over the sessions. Closing on November 15, interbank VND interest rates were traded at: overnight 5.78% (+1.21 percentage points); 1 week 5.80% (+1.13 percentage points); 2 weeks 5.74% (+0.97 percentage points); 1 month 5.50% (+0.62 percentage points).

Interbank USD interest rates continued to decrease across all terms. On November 15, interbank USD interest rates were: overnight 4.60% (-0.01 percentage point); 1 week 4.65% (-0.03 percentage point); 2 weeks 4.70% (-0.03 percentage point) and 1 month 4.74% (-0.02 percentage point).

In the open market last week from November 11 to November 15, in the mortgage channel, the State Bank of Vietnam offered a 7-day term with a volume of VND100,000 billion, the interest rate remained at 4.0%. There were VND99,999.73 billion in winning bids, and VND89,999.91 billion maturing last week in the mortgage channel.

The State Bank of Vietnam bid for 28-day State Bank bills, bidding for interest rates. There were 2,550 billion VND in winning bids, interest rates at 3.90% - 4.0%. There were 23,500 billion VND in bills maturing last week.

Thus, the State Bank of Vietnam pumped a net VND30,949.82 billion into the market last week through the open market channel. There were VND99,999.73 billion circulating on the mortgage channel, and VND55,700 billion in State Bank bills circulating on the market.

Bond market, November 13, the State Treasury successfully bid 6,200 billion VND/11,000 billion VND of government bonds called for bid, the winning rate reached 56%. Of which, the 5-year term mobilized 1,200 billion VND/3,000 billion VND of the call and the 10-year term mobilized 5,000 billion VND/6,000 billion VND of the call. The 15-year and 30-year terms called for bids of 1,500 billion VND and 500 billion VND respectively, however, there was no winning volume in both terms. The winning interest rate for the 5-year term was 1.91% (+0.02 percentage points compared to the previous auction) and for the 10-year term was 2.66% (unchanged).

This week, on November 20, the State Treasury plans to bid for VND10,000 billion in government bonds, of which VND2,500 billion will be offered for 5-year terms, VND5,500 billion for 10-year terms, VND1,500 billion for 15-year terms, and VND500 billion for 30-year terms.

The average value of Outright and Repos transactions in the secondary market last week reached VND17,098 billion/session, a sharp increase compared to VND10,323 billion/session of the previous week. Government bond yields fluctuated differently between maturities last week. At the end of the session on November 15, government bond yields were trading around 1 year 1.85% (unchanged compared to the session at the end of last week); 2 years 1.85% (unchanged); 3 years 1.88% (-0.01 percentage point); 5 years 1.95% (+0.02 percentage point); 7 years 2.27% (+0.06 percentage point); 10 years 2.74% (+0.02 percentage point); 15 years 2.95% (+0.01 percentage point); 30 years 3.17% (+0.002 percentage point).

Stock market, last week, the stock market had negative developments, all 3 indices were in red. At the end of the session on November 15, VN-Index stood at 1,218.57 points, down 33.99 points (-2.71%) compared to the previous weekend; HNX-Index lost 5.35 points (-2.36%) to 221.53 points; UPCoM-Index fell 0.82 points (-0.89%) to 91.33 points.

Average market liquidity reached about VND17,700 billion/session, a positive increase from VND14,200 billion/session of the previous week. Foreign investors net sold more than VND4,000 billion on all three exchanges.

International News

The US recorded a number of important indicators, in addition to the Federal Reserve Chairman Jerome Powell spoke about the economy and inflation. First, the US Department of Labor said that the headline CPI and core CPI in the country increased by 0.2% and 0.3% respectively compared to the previous month in October, equal to the increase in the previous month and also in line with experts' forecasts.

Compared to the same period in 2023, the headline CPI increased by 2.6% year-on-year in October, higher than the 2.4% increase recorded in September, and the core CPI was flat at 3.3% year-on-year.

In addition, the country's overall PPI and core PPI rose 0.2% and 0.3% month-on-month in October, following the 0.1% and 0.2% increases in the previous month, matching analysts' forecasts. Compared to the same period in 2023, the overall PPI and core PPI rose 2.4% and 3.5% year-on-year in October, expanding from the 1.9% and 3.3% increases recorded in September.

Next, in the retail market, total retail sales and core retail sales in the US increased 0.4% and 0.1% respectively compared to the previous month in October, decelerating sharply from the increase of 0.8% and 1.0% in September, almost matching the forecast of both increasing 0.3%. Compared to the same period in 2023, total retail sales increased 2.8% compared to the same period in 2023.

After the above economic indicators were released, on November 14, Fed Chairman Jerome Powell commented that “the economy is not yet giving any clear signals that we need to cut interest rates in a hurry.” He mentioned that the unemployment rate has stabilized in recent months, and is still low compared to the standard. Inflation is approaching the long-term target of 2.0%, but is still not there and the path ahead may be bumpy.

Mr. Powell's statement has raised concerns in the market that the Fed may cut its policy interest rate later than expected. According to CME's forecasting tool, there is a 60% chance that the Fed will cut its policy interest rate by 25 basis points at its meeting on December 17-18, and a 40% chance that it will keep its policy interest rate unchanged at 4.50% - 4.75%. According to the dominant scenario, the Fed will cut its policy interest rate twice in 2025, bringing the policy interest rate to 3.75% - 4.0% by the end of the year.

The Eurozone received some notable economic news. The European Union's statistical office Eurostat said that Eurozone GDP grew by 0.4% quarter-on-quarter in the third quarter, slightly faster than the 0.3% increase in the second quarter and in line with forecasts.

Eurozone industrial output fell sharply by 2.0% month-on-month in September after rising 1.5% in the previous month, deeper than forecasts for a 1.3% decline. Year-on-year, Eurozone industrial output fell 2.8%.

The ZEW survey said that the economic confidence index in the Eurozone fell sharply, reaching only 12.5 points in November, down from 20.1 points in October and contrary to the forecast of an increase to 20.5 points. In Germany in particular, the economic confidence index was only 7.4 points this month, down from 13.1 points in October and contrary to the forecast of a slight increase to 13.2 points.

Finally, the German WPI wholesale price index rose 0.4% month-on-month in October after falling 0.3% in the previous month, higher than the forecast of a 0.1% increase. Compared to the same period in 2023, the German WPI still showed a decline of around 0.8% year-on-year.

Source: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-tuan-11-1511-157895.html