The central exchange rate decreased by 1 VND, the VN-Index decreased by 4.26 points or by the end of the first quarter of 2024, the total capital mobilization volume through government bond issuance was 80,229 billion VND... are some notable economic information on April 10.
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Domestic news
In the foreign exchange market session on April 10, the State Bank listed the central exchange rate at 24,036 VND/USD, down 1 VND compared to the previous session.
The USD buying price was kept unchanged at 23,400 VND/USD by the State Bank of Vietnam, while the USD selling price was listed at 25,187 VND/USD, 50 VND lower than the ceiling exchange rate.
On the interbank market, the dollar-dong exchange rate closed at 24,942 VND/USD, down 16 VND compared to the session on April 9.
The dollar-dong exchange rate on the free market increased by 40 VND for buying and 30 VND for selling, trading at 25,340 VND/USD and 25,450 VND/USD.
On April 10, the average interbank VND interest rate increased by 0.15 - 0.19 percentage points in all terms of 1 month or less compared to the previous session, specifically: overnight 3.86%; 1 week 4.0%; 2 weeks 4.02% and 1 month 3.96%.
The average interbank USD interest rate increased by 0.01 - 0.02 percentage points for short terms while remaining unchanged for 1-month terms; trading at: overnight 5.24%; 1 week 5.32%; 2 weeks 5.40%, 1 month 5.41%.
Government bond yields in the secondary market decreased across all maturities; closing at: 3-year 1.82%; 5-year 2.0%; 7-year 2.22%; 10-year 2.71%; 15-year 2.93%.
In open market operations, on the mortgage channel, the State Bank bid 5,000 billion VND with a term of 7 days, the interest rate remained at 4.0%. There was no winning bid, there was 2,513.26 billion VND maturing on the mortgage channel. The State Bank bid for SBV bills with a term of 28 days, bidding for interest rates. There were 4,000 billion VND of winning bills with the interest rate remained at 2.9%. There were 14,999.7 billion VND of maturing bills.
Thus, the State Bank of Vietnam pumped a net VND8,486.44 billion into the market yesterday, the volume of treasury bills circulating in the market decreased to VND138,849.6 billion, and there was no more volume circulating on the mortgage channel.
On the bond market on April 10, the State Treasury successfully mobilized VND7,025 billion/VND10,500 billion of government bonds called for auction (winning rate of 67%). Of which, the 5-year term mobilized the entire VND2,000 billion called for auction, the 10-year term mobilized VND2,500 billion/VND4,500 billion called for auction and the 15-year term mobilized VND2,525 billion/VND3,500 billion called for auction. The 20-year term called for auction of VND500 billion, but there was no winning volume. The winning interest rate for the 5-year term was 1.53% (+0.03 percentage points compared to the previous auction), the 10-year term was 2.48% (+0.03 percentage points), the 15-year term was 2.68% (+0.03 percentage points).
Yesterday's stock market session, the indices fluctuated within a narrow range. At the end of the trading session, VN-Index decreased by 4.26 points (-034%) to 1,258.56 points; HNX-Index decreased by 1.57 points (-0.65%) to 238.79 points; UPCoM-Index increased slightly by 0.08 points (+0.09%) to 90.65 points. Market liquidity continued to decrease slightly compared to the previous session with a trading value of over VND 18,500 billion. Foreign investors returned to net selling VND 606 billion on all 3 floors.
A report from the State Treasury said that by the end of the first quarter of 2024, the total capital mobilized through the issuance of government bonds was VND 80,229 billion, reaching 20.1% of the plan assigned by the Ministry of Finance (VND 400,000 billion). The report also said that the average term of government bonds issued in 2024 is 11.53 years; the average issuance interest rate is 2.24%/year; the remaining term of the government bond portfolio is 9.04 years.
International News
The US Federal Reserve (Fed) released the minutes of its March meeting. In this document, the Fed reaffirmed that the US economic outlook is stronger than the forecasts made at the end of 2023. This upward adjustment is mainly due to the abundant labor market, boosted by new immigrants.
In addition, the effects of tightening monetary policy are lagged and will take time to fully manifest. US economic output is likely to be below potential in 2024, but will return to potential in the long run as the effects of monetary policy fade. In addition, the unemployment rate is forecast to remain largely unchanged over the next few years; headline and core PCE inflation will continue to decelerate this year, ending the year up about 2.5% year-on-year, as supply and demand in the market gradually move toward equilibrium.
By 2026, both PCE measures will be near the 2.0% target. To achieve the inflation target and full employment, the Fed decided to maintain the policy rate at 5.25% - 5.50% and will carefully evaluate incoming data. The Fed does not believe that a reduction in the policy rate is appropriate until it has sufficient confidence that inflation is moving sustainably toward its 2.0% target and is prepared to change its stance if risks to achieving that goal arise.
Inflationary pressures in the US have shown signs of being more persistent than expected. The US Department of Labor announced that the headline CPI and core CPI in the country both increased 0.4% compared to the previous month in March, equal to the increase in the previous month and higher than the forecast of both increasing 0.3% compared to the previous month.
The headline CPI in the US rose 3.5% year-on-year last month, accelerating from 3.2% in February and beating the forecast of 3.4%. This is also the highest year-on-year CPI the US has seen since September 2023.
The sharp increase in housing costs (about one-third of the CPI basket) is considered the main reason for persistent inflationary pressures in the US. Last month, these costs increased about 0.4% compared to the previous month and 5.7% compared to the same period last year.
After the Fed minutes and CPI data were released, CME's dominant forecast scenario showed that the Fed's first policy rate cut would likely come in September this year, instead of June as previously forecast, and that there would only be one cut in 2024, bringing the Fed's policy rate at the end of the year to 5.0% - 5.25%.
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