Thai shares are poised to extend their gains further today on solid 1Q16 GDP growth and as global risk appetite improved after a sharp rally on Wall Street overnight that was triggered by Warren Buffet buying a stake in Apple and rising oil prices. Nevertheless, the macro view remains cautious. Globally, Fed officials have still talked about the possibility of a June rate hike, despite flattened US Treasuries’ yield curves. Locally, prolonged drought and household debts continue to be causes for concerns.
Local issue
GDP growth hit 3.2% in 1Q16. The National Economic and Social Development Board (NESDB) yesterday reported that the country’s GDP growth was at 3.2% in 1Q16, marking a three-year high. The growth was primarily attributed to government stimulus measures and the tourism industry. Accordingly, NESDB revised its GDP projection to a range of 3.0-3.5%, from its prior 2.8-3.8% estimated in Feb. (Bangkok Post)
GDP growth hit 3.2% in 1Q16. The National Economic and Social Development Board (NESDB) yesterday reported that the country’s GDP growth was at 3.2% in 1Q16, marking a three-year high. The growth was primarily attributed to government stimulus measures and the tourism industry. Accordingly, NESDB revised its GDP projection to a range of 3.0-3.5%, from its prior 2.8-3.8% estimated in Feb. (Bangkok Post)
Promotion of free trade pact across Apec members. Winichai Chaemchaeng, vice-minister of commerce, said Thailand will strongly promote initiation of the Free Trade Area of Asia-Pacific (FTAAP) at the 22nd meeting of Asia-Pacific Economic Cooperation (Apec) on 17-18 May. The pact aims to create a free trade zone across the countries in the Asia-Pacific region. The FTTAP was initially suggested during the 2015 annual Apec meeting. (Bangkok Post)
THAI (Bt15.40, NR, 2016 TP Bloomberg Bt12.03) reported a 1Q16 net profit of Bt5.99bn, up 32% YoY thanks to cost cutting measures and lower fuel costs. Excluding one-off items, normalized profit was Bt6.85bn, up 2.4% YoY. The result beat the Bloomberg consensus of Bt4.89bn by 40% (SET, Bloomberg, AWS)
Global issues
Investors are now focused on today’s release of the minutes from the Federal Reserve's last policy meeting in April for clues as to the timing of its next rate hike. (Reuters)
Investors are now focused on today’s release of the minutes from the Federal Reserve's last policy meeting in April for clues as to the timing of its next rate hike. (Reuters)
The dollar index fell 0.1% to 94.54 on Monday, after two straight days of gains. The index edged lower after a weaker-than-expected reading of New York's Empire State survey. However, the dollar rose against the yen after Japan signalled once again its willingness to intervene in the market to weaken its currency. The dollar rose 0.3% versus the yen to ¥108.97. (Reuters)
US Treasury yields rose on Monday as a jump in oil prices to near US$50 a barrel stifled demand for safe-haven US government debt and the yield curve flattened as weak US manufacturing data suggested long-term inflation could be subdued. The two-year, 10-year yield curve hit its flattest level since March 4 in early trading, flattening to 93.7 basis points, from 95 basis points late on Friday. The five-year, 30-year yield curve hit its lowest since April 27. (Reuters)
USA
Wall Street shares surged on Monday, bolstered by a jump in Apple shares and gains from energy stocks that were backed by stronger oil prices. Apple surged after Warren Buffett's Berkshire Hathaway reported a stake worth about US$1bn in the iPhone maker. Crude prices were supported by worries about global supply outages. (Reuters)
Wall Street shares surged on Monday, bolstered by a jump in Apple shares and gains from energy stocks that were backed by stronger oil prices. Apple surged after Warren Buffett's Berkshire Hathaway reported a stake worth about US$1bn in the iPhone maker. Crude prices were supported by worries about global supply outages. (Reuters)
A gauge of home-builder sentiment was unchanged in May, a sign of steady growth for the housing market. The National Association of Home Builders housing market index held at 58 this month. The index has moved around 58 for four straight months. A reading over 50 means most builders generally see conditions in the single-family housing market as positive. Economists had expected a reading of 59 in May. The index has been positive since mid-2014. (Wall Street Journal)
The May 2016 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index turned negative, falling nineteen points to -9.02 from last month's 9.56, and signals a decline in activity. Economists had forecast a reading of 6.50 in May. (New York Federal Reserve)
Europe
European shares ended steady on Monday, having recouped early losses, as stronger mining stocks on the back of firmer metals prices offset weakness elsewhere, with Telecom Italia a standout gainer on the back of its cost-cutting plans. (Reuters)
European shares ended steady on Monday, having recouped early losses, as stronger mining stocks on the back of firmer metals prices offset weakness elsewhere, with Telecom Italia a standout gainer on the back of its cost-cutting plans. (Reuters)
Asia
Steel and iron ore futures in China rose on Monday, taking a string of softer economic data in their stride, supported by a stabilising property market and improving physical demand to recover from the biggest weekly slide since 2009. China's real estate investment in April kept pace with the previous month, as developers continued to start projects in response to surging home sales. Rebar, or reinforced steel used in construction, climbed 0.7% to 2,053 yuan (US$314.5) a tonne on the Shanghai Futures Exchange. (Reuters)
Steel and iron ore futures in China rose on Monday, taking a string of softer economic data in their stride, supported by a stabilising property market and improving physical demand to recover from the biggest weekly slide since 2009. China's real estate investment in April kept pace with the previous month, as developers continued to start projects in response to surging home sales. Rebar, or reinforced steel used in construction, climbed 0.7% to 2,053 yuan (US$314.5) a tonne on the Shanghai Futures Exchange. (Reuters)
Japan repeats willingness to intervene in forex market: Masatsugu Asakawa, Japan's vice finance minister for international affairs said that Japan would not be bound by a recent US Treasury report on currencies that appeared to warn against unilateral intervention. (Reuters)
Commodities
Crude oil futures hit a six-month high on Monday as output disruptions were expected to cut into a long-standing glut in the market. Supply disruptions in Nigeria, Canada and Venezuela have most likely pushed oil production below consumption levels this month for the first time in at least two years. That means the world has started eating into the huge stockpile of oil that has knocked as much as 70% off crude prices between 2014 and early 2016. Brent crude futures were up US$1.03 (+2.2%) at US$48.86 per barrel. US crude was up US$1.66 (+3.6%) at US$47.87 a barrel. (Reuters)
Crude oil futures hit a six-month high on Monday as output disruptions were expected to cut into a long-standing glut in the market. Supply disruptions in Nigeria, Canada and Venezuela have most likely pushed oil production below consumption levels this month for the first time in at least two years. That means the world has started eating into the huge stockpile of oil that has knocked as much as 70% off crude prices between 2014 and early 2016. Brent crude futures were up US$1.03 (+2.2%) at US$48.86 per barrel. US crude was up US$1.66 (+3.6%) at US$47.87 a barrel. (Reuters)
Gold prices turned slightly negative on Monday, reversing gains of 1% on pressure from strong crude oil futures and US equity markets. Spot gold was down 0.05% at US$1,272.50 an ounce, after rising as much as 1.2% to US$1,288.20. US gold futures for June delivery settled up 0.1% at US$1,274.20 an ounce. (Reuters)
Copper rebounded on Monday, bolstered by a softer dollar but the upside was capped as data from China's manufacturing sector dampened hopes of stronger demand growth in the top consumer. Benchmark copper on the London Metal Exchange closed 0.5% higher at US$4,650 a tonne, bouncing from losses last week that took it down to US$4,594, its lowest since February 25. (Reuters)
Source: aws.co.th / settrade.com
