Today, Thai shares look set to trade higher in line with most global markets after the Fed left interest rates unchanged and decreased the number of planned rate hikes by half. Economists now expect other central banks to maintain their policies, like the Bank of England which announces its decision today. Locally, there is pessimism from a decline in February’s industrial sentiment but good news from Thailand’s Exim Bank to boost trade by opening branches abroad. However, overall, the local bourse should be driven by the dovish-sounding Fed.
Local issue
Industrial sentiment fell again in Feb. The Federation of Thai Industries (FTI) yesterday reported the Thai industries sentiment index fell for a second straight month in Feb, down to 85.1 points from 86.3 in Jan. Manufacturers remained concerned about soft global demand, escalating drought conditions and fragile world economic prospects. (Bangkok Post)
Exim Bank strategy to go abroad. The Export-Import Bank of Thailand (Exim Bank) will draw up a three-year business plan to propose to the Finance Ministry within three weeks. The main strategy is to open branches overseas to support Thai exporters and companies that invest abroad, especially in Asean countries. In 2016, Exim Bank targets new lending worth more than Bt19bn, up by 4-5% YoY. (The Nation)
Draft bill aims to end budget shenanigans. A draft monetary and fiscal bill, approved by the cabinet, requires current and future governments to set aside a budget to pay off debt obligations incurred from quasi-fiscal activities done through state-controlled banks within two years aiming at hindering governments from heavily using off-balance-sheet loans to finance their populist policies. However, the conditions need to be discussed with the Office of the Council of State after several state agencies warned higher debt repayment may add to their fiscal burden. (Bangkok Post)
Global issues
Fed holds short-term interest rates unchanged as expected while indicating moderate US economic growth and strong job gains would allow it to tighten policy this year, with fresh projections showing policymakers expected two quarter-point hikes by the year's end, half the number expected in Dec 2015. However, the central bank noted that the US continues to face risks from an uncertain global economy. (Reuters)
The dollar fell after Fed eyes fewer hikes. The dollar index was down about 0.1% at 95.751, after plunging to a one-month low of 95.539 in the wake of the Fed announcement. (Reuters)
BoE are seen leaving policy unchanged. A Reuters poll showed that most economists expect the BOE to stand pat and not to raise rates until the first quarter of 2017. The Bank of England will announce a policy decision today. (Reuters)
USA
Wall Street shares closed at 2016 high on Wednesday after the US Federal Reserve prudently left interest rates untouched and signaled fewer rate hikes in coming months. (Reuters)
US data points to firming economy, inflation. US core Consumer Price Index (CPI), excluding the volatile food and energy components, rose 0.3% last month after a similar gain in January and was higher than 0.2% economists polled by Reuters had forecast. Meanwhile, Housing data supported by a firming labor market was also improving. The Commerce Department said housing starts increased 5.2% to a seasonally adjusted annual pace of 1.18mn units last month, the highest level in five months (Reuters)
Europe
European stocks ended little changed on Wednesday, coming off session highs after a report showed US inflation rose more than expected last month, with gains for energy and auto company shares offset by a weaker banking sector. the pan-European FTSEurofirst 300 index closed up 0.02% at 1,341.8 points and euro zone's blue-chip Euro STOXX 50 index fell 0.2% (Reuters)
European new car sales jumped 14% in February, industry data showed on Wednesday, helped by an extra selling day, even allowing Volkswagen's core brand to swing back to growth despite its diesel emissions scandal. (Reuters)
Asia
Asian stocks gained early on Thursday on a dovish-sounding Fed who moved to reduce the number of interest rate hikes planned for this year. Asian equities took cues from Wall Street, where the S&P 500 closed at its highest level this year following the US central bank's dovish messages. MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.9%. (Reuters)
Japan's exports fell 4.0% in February from a year earlier, which was slower than a 12.9% YoY decline in Jan, but the fall was more than the median estimate of a 3.1% decrease in a Reuters poll of economists and economists worry that a renewed slowdown in emerging markets could curb future export growth. Imports fell 14.2% in the year to Feb, versus the consensus of a 15.2% decrease. (Reuters)
Commodities
Oil prices jumped almost 6% on Wednesday, erasing losses of the past two days, after major producers firmed up plans to meet in Qatar to discuss an output freeze and US crude stockpiles grew less than expected. US crude settled up $2.12, or 5.8%, at $38.46 a barrel. Brent crude finished up $1.59, or 4%, at $40.33 a barrel. (Reuters)
Oil prices jumped almost 6% on Wednesday, erasing losses of the past two days, after major producers firmed up plans to meet in Qatar to discuss an output freeze and US crude stockpiles grew less than expected. US crude settled up $2.12, or 5.8%, at $38.46 a barrel. Brent crude finished up $1.59, or 4%, at $40.33 a barrel. (Reuters)
Gold rallied 2% to $1,260 an ounce in the last session on Wednesday, turning higher after the Federal Reserve indicated that the US continues to face risks from an uncertain global economy, pressuring the dollar. (Reuters)
Source: aws.co.th / settrade.com
