Thai shares are poised to trade lower today trailing losses on global bourses due to more hawkish comments from Fed officials on the path of interest rate hikes. The resulting dollar strength pressed down commodities and most emerging market equities. Adding to a negative tone, oil prices tumbled again on hefty US stockpiles, pressuring energy shares. Global trades are expected to be light ahead of the Easter holiday weekend. Local factors are mixed. The government has decided to go ahead with the Thai-Sino railway without China’s investment which ends the major cause of several months of delay. BAAC’s huge lending plan for SME and farmers is another stimulus. However, Thailand’s missing out on the TPP obstructs investment from some TPP partners, such as Korea.
Local issue
Policy interest rate maintained at 1.5%. BoT’s MPC yesterday voted unanimously to keep policy rate unchanged at 1.5%, holding the rate for a seventh consecutive meeting. The rate was justified by their estimation that the economy will soon start to see the benefit of stimulus measures launched by the government. (Bangkok Post)
Thailand to go on with Thai-Sino railway without China. Thailand has decided to wholly invest in the Thai-Sino high-speed railway project and hire China to develop the project instead after it failed to agree in negotiations with China on the terms of the arrangement which caused the progress delay for months. The decision was made as the government wants the country’s high-speed rail project to really get started. (Bangkok Post)
BAAC to extend loans for SMEs. Bank for Agriculture and Agricultural Cooperatives aims to provide Bt100bn in loans a year from now through 2018 to farming-related SMEs in order to spur the development of both agricultural products and individual farmers. BACC targets agricultural-related SME loans to account for 30% of its portfolio, from 0.5% of Bt1.0tn total outstanding loans currently. (Bangkok Post)
Difficulty for Korean investment due to failure to join TPP. Federation of Korean Industries said Thailand’s missing out on the Trans-Pacific Partnership is a major obstacles to Korean investment in the country. Lack of technical personnel and restrictions on hiring foreign workers were cited as other problems that Korean investors are facing. (The Nation)
4G bidders face tougher rules. A guarantee to be placed before the new 4G auction will increase from 5% to 10-30% of reserve prices. At public hearings held April 18-23, the NBTC will float three choices on the reserve price i.e. Bt70.18bn, Bt73.72bn and Bt75.65bn. The auction is scheduled to take place in June. (Bangkok Post) Comment: The hearing will dictate mobile phone operators’ fates.
Global issues
The dollar rose to a one-week high against a basket of currencies on Wednesday as Federal Reserve officials talked up the likelihood of more interest rate hikes later this year, as early as April. The dollar index, which tracks the US currency against six major rivals, rose about 0.4% to 96.044, the highest level since 16 Mar. (Reuters)
The dollar rose to a one-week high against a basket of currencies on Wednesday as Federal Reserve officials talked up the likelihood of more interest rate hikes later this year, as early as April. The dollar index, which tracks the US currency against six major rivals, rose about 0.4% to 96.044, the highest level since 16 Mar. (Reuters)
US Treasury yields fell on Wednesday as investors continued to evaluate when the Fed is likely to next raise interest rates. US benchmark 10-year Treasury notes gained 17/32 in price to yield 1.88%, down from 1.94% on Tuesday. (Reuters)
USA
Wall Street shares finished lower on Wednesday, with S&P500 falling back into negative territory for the year, as oil and materials share prices dropped. Hawkish comments over the past two days by Fed officials, suggesting more appetite for rate hikes, pressed down market sentiment. (Reuters)
Wall Street shares finished lower on Wednesday, with S&P500 falling back into negative territory for the year, as oil and materials share prices dropped. Hawkish comments over the past two days by Fed officials, suggesting more appetite for rate hikes, pressed down market sentiment. (Reuters)
New US single-family home sales rebounded modestly in February as a surge in the West offset sharp declines in other regions, pointing to a gradually improving housing sector. Home sales rose 2.0% to a seasonally adjusted annual rate of 512,000 units. January's sales pace was revised up to 502,000 units from the previously reported 494,000 units. (Reuters)
Europe
European shares slipped on Wednesday in thin pre-holiday trade, with miners and oil companies leading the decline on weaker commodity prices, while Credit Suisse outperformed the banking sector after saying it was cutting costs further. (Reuters)
European shares slipped on Wednesday in thin pre-holiday trade, with miners and oil companies leading the decline on weaker commodity prices, while Credit Suisse outperformed the banking sector after saying it was cutting costs further. (Reuters)
Asia
Japan: Manufacturers' mood down but service sector sentiment up: Confidence at Japanese manufacturers eased in March and is seen unlikely to change much over the next three months due to yen gains and slowing growth in emerging markets. The Reuters Tankan sentiment index for manufacturers fell to 6 in March from 7 in February. Service-sector sentiment bounced from the prior month's drop. The service-sector index rose to 24 from 21 in February, led by retailers and information/communications. (Reuters)
Japan: Manufacturers' mood down but service sector sentiment up: Confidence at Japanese manufacturers eased in March and is seen unlikely to change much over the next three months due to yen gains and slowing growth in emerging markets. The Reuters Tankan sentiment index for manufacturers fell to 6 in March from 7 in February. Service-sector sentiment bounced from the prior month's drop. The service-sector index rose to 24 from 21 in February, led by retailers and information/communications. (Reuters)
China is engineering a steady depreciation of its yuan in a move that has gone largely unnoticed because its weakness this year has come against the currencies of trading partners rather than the dollar. Emerging currencies have broadly strengthened in 2016 against the dollar. The yuan is flat in 2016 to the dollar. But it has depreciated almost 3% in nominal effective exchange rate (NEER) or trade-weighted terms, while most other emerging currencies have appreciated. (Reuters)
Commodities
Oil prices tumbled 4% on Wednesday, with US crude settling below the key US$40 per barrel mark after a sixth straight week of record highs in stockpiles. US crude futures settled down US$1.66 (-4.0%) at US$39.79 a barrel. It was the sharpest one-day drop for the front-month contract in US crude since 11 Feb 11, when prices fell to a 12-year low of US$26.05. Brent crude futures finished down US$1.32 (-3.2%) at US$40.47 a barrel. (Reuters)
Oil prices tumbled 4% on Wednesday, with US crude settling below the key US$40 per barrel mark after a sixth straight week of record highs in stockpiles. US crude futures settled down US$1.66 (-4.0%) at US$39.79 a barrel. It was the sharpest one-day drop for the front-month contract in US crude since 11 Feb 11, when prices fell to a 12-year low of US$26.05. Brent crude futures finished down US$1.32 (-3.2%) at US$40.47 a barrel. (Reuters)
Spot gold fell 2% on Wednesday, one of its deepest declines of the past year, as the dollar strengthened following hawkish comments by Fed officials. Spot gold fell 1.9% to trade at around US$1,224.46 an ounce after earlier dropping as much as 2.6%, also pressured by investors booking profits ahead of the Easter break, which starts on Friday. US gold futures settled down 2% at US$1,224 an ounce. (Reuters)
US crude stockpile build 3 times above analyst expectations: The US government's Energy Information Administration (EIA) said crude stockpiles rose 9.4mn barrels last week - three times the 3.1mn barrels build forecast by analysts in a Reuters poll. (Reuters)
Raw sugar futures jumped to 17-month high on Wednesday, bucking pressure from a broad-based commodities selling spree as traders renewed buying on expectations for a widening supply shortfall this year. The May raw sugar contract on ICE Futures US settled up 0.13 cent (+0.8%) at 16.71 cents per lb. Prices rallied to 16.75 cents, the highest for the front-month since October 2014. (Reuters)
Source: aws.co.th / settrade.com
