Thai shares are poised to trade higher taking a cue from gains on Wall Street overnight on optimism that the weakening dollar will boost US exports and buoy US corporate earnings going forward and that commodity prices will be steady. However, market gains and turnover this week should be limited with only two trading days for the Thai market and a series of Golden Week holidays in Japan. Locally, two reports offered an improved outlook for the economy. April consumer prices rose for the first time in 16 months and March factory output rose for the first time in three months.
Local issue
CPI in April rose for the first time in 16 months. Ministry to revise forecast. Commerce Ministry reported consumer prices in April edged up 0.07% YoY, with the monthly rate up 0.55% from March, led by the surge in prices of meat and fresh vegetables because of widespread drought. Core inflation excluding food and energy prices still rose 0.78% YoY and 0.14% on a monthly basis. In the first four months of the year, consumer prices fell by 0.35% YoY, while core inflation was up 0.70% YoY. The Ministry is scheduled to revise its inflation policy next month to reflect recovery of global crude price as well as a drought effect. The ministry has currently forecast 2016 inflation in a range of zero to 1%. (Bangkok Post)
CPI in April rose for the first time in 16 months. Ministry to revise forecast. Commerce Ministry reported consumer prices in April edged up 0.07% YoY, with the monthly rate up 0.55% from March, led by the surge in prices of meat and fresh vegetables because of widespread drought. Core inflation excluding food and energy prices still rose 0.78% YoY and 0.14% on a monthly basis. In the first four months of the year, consumer prices fell by 0.35% YoY, while core inflation was up 0.70% YoY. The Ministry is scheduled to revise its inflation policy next month to reflect recovery of global crude price as well as a drought effect. The ministry has currently forecast 2016 inflation in a range of zero to 1%. (Bangkok Post)
Factory output in March unexpectedly rose for the first time in three months. The Industry Ministry reported manufacturing production index (MPI) in March rose 1.83% YoY, improved from 1.7% YoY slip in February and also beat Reuters poll forecast of a drop of 0.1% YoY. (Bangkok Post)
SRT to tout city land to investors. The State Railway of Thailand (SRT) aims to develop its two key pieces of land, namely Mae Nam railway station in Klong Toey district covering a total of 260 rai, worth Bt10.4bn, and a 359-rai plot of land near the Energy Complex worth Bt18.3bn, for commercial purposes under the Public-Private Partnership (PPP) scheme to prop up its revenues. Previously, a property development project at Bang Sue station covering a total of 218 rai has already been approved by the SRT board and will then be forwarded to the Transport Ministry and then the cabinet for final approval. (The Nation)
ADVANC (Bt156.00, BUY, AWS 16TP213.00) will no longer need to rent DTAC's 1800 MHz network to continue providing its 2G service because the government used Section 44 to extend the period of its customer retention and the roaming deal is about to end. (Bangkok Post) Comment: This is good news for ADVANC since it saves roaming costs during the retention period.
Global issues
The dollar edged up against the yen on Monday following its biggest weekly loss in more than seven years, but it declined against other major currencies, particularly the euro, which was helped by stronger German manufacturing data. The dollar index dipped 0.35% to 92.747 after hitting its lowest since January 2015 at 92.568. (Reuters)
US Treasury yields rose on Monday as stock prices gained, reducing demand for safe haven bonds, before Friday's highly anticipated jobs report for April. Benchmark 10-year notes fell 13/32 in price to yield 1.87%, up from 1.82% on Friday. The yields have fallen from 1.94% last Tuesday, before the Fed statement on Wednesday. (Reuters)
USA
Wall Street shares moderately rose on Monday, rebounding from losses last week, as Berkshire Hathaway and consumer shares gained and weakness in the dollar eased worries about earnings for multinationals. The Nasdaq snapped a seven-session losing streak, though Apple fell for an eighth straight session, its longest run of losses since mid-1998. (Reuters)
Wall Street shares moderately rose on Monday, rebounding from losses last week, as Berkshire Hathaway and consumer shares gained and weakness in the dollar eased worries about earnings for multinationals. The Nasdaq snapped a seven-session losing streak, though Apple fell for an eighth straight session, its longest run of losses since mid-1998. (Reuters)
1Q16 earnings from S&P500 companies have mostly beaten analysts' expectations. However, they are still estimated down 5.7% YoY, according to Thomson Reuters data. (Reuters)
US manufacturing activity rose for the second straight month in April, but at a slightly slower pace. The Institute for Supply Management (ISM) said its index of national factory activity slipped to 50.8 last month from 51.8 in March. (Reuters)
US construction spending rose to an 8-1/2-year high in March and the prior month's outlays were revised higher, pointing to sustained strength in the sector despite a sharp downturn in spending by energy firms. Construction spending increased 0.3% to the highest level since October 2007, following an upwardly revised 1.0% jump in February. Economists had forecast the spending rising 0.5% in March after a previously reported 0.5% decline in February. (Reuters)
Europe
European equities bounced back on Monday after sharp declines in the previous session, with German shares outperforming the broader market after a positive manufacturing survey report. However, trading volumes were thin as the UK market was closed for a public holiday. (Reuters)
European equities bounced back on Monday after sharp declines in the previous session, with German shares outperforming the broader market after a positive manufacturing survey report. However, trading volumes were thin as the UK market was closed for a public holiday. (Reuters)
62% of companies in Europe, that have reported 1Q16 results, have met or beaten earnings forecasts while the rest have missed, according to Thomson Reuters StarMine. (Reuters)
Euro zone factories did slightly better in April, with output not losing as much momentum as initially thought but growth in activity remaining weak despite the second-deepest price-cutting since early 2010. Markit's manufacturing PMI for the euro zone rose to just 51.7 from March's 51.6, slightly better than an earlier flash estimate of 51.5. A reading above 50 indicates growth. The surveys paint a mixed picture of the wider economy. Manufacturing growth was strong in Italy and Spain last month and Germany showed signs of reviving, but activity in France contracted at the steepest rate in a year. (Reuters)
The euro zone economy grew 0.6% QoQ in 1Q16. While that was more than expected, inflation once again fell below zero last month as energy prices dropped. (Reuters)
Asia
BOJ Governor Haruhiko Kuroda said on Monday gains by the yen may have adverse effects on the country's economy and prices. The yen rose to an 18-month high against the dollar on Monday after the BOJ kept monetary policy steady last week, defying market expectations that it would expand stimulus to protect Japan's fragile economic recovery. (Reuters)
BOJ Governor Haruhiko Kuroda said on Monday gains by the yen may have adverse effects on the country's economy and prices. The yen rose to an 18-month high against the dollar on Monday after the BOJ kept monetary policy steady last week, defying market expectations that it would expand stimulus to protect Japan's fragile economic recovery. (Reuters)
US Treasury on Friday put Japan on a new currency monitoring list with four other countries that have large trade surpluses with the US. The move was seen as making it harder for Japan to intervene in the currency market to stem the yen's gains. (Reuters)
Japanese financial markets are closed from today to Thursday for public holidays and will reconvene on Friday. (Reuters)
Activity in China's manufacturing sector expanded for the second month in a row in April but only marginally, an official survey showed on Sunday, raising doubts about the sustainability of a recent pick-up in the Chinese economy. The official PMI was 50.1 in April, easing from March's 50.2 and barely above the 50-point mark. Analysts had predicted the reading would improve to 50.4, after upbeat March data fueled hopes that the country's prolonged economic slowdown was easing. (Reuters)
Activity in China's services industry was strong in April but grew at a slightly slower pace, with the official PMI at 53.5 in April, compared with 53.8 in March. (Reuters)
Commodities
Oil prices fell about 3% on Monday as production from the OPEC neared all-time peaks and record speculative buying in global benchmark Brent sparked profit-taking on last month's outsized rally. Brent's new front-month contract, July, settled down US$1.54 (-3.3%) at US$45.83 per barrel, hitting a session low at US$45.72. US crude futures closed down US$1.14 (-2.5%) at US$44.78 a barrel, after hitting an intraday low at US$44.54. (Reuters)
Oil prices fell about 3% on Monday as production from the OPEC neared all-time peaks and record speculative buying in global benchmark Brent sparked profit-taking on last month's outsized rally. Brent's new front-month contract, July, settled down US$1.54 (-3.3%) at US$45.83 per barrel, hitting a session low at US$45.72. US crude futures closed down US$1.14 (-2.5%) at US$44.78 a barrel, after hitting an intraday low at US$44.54. (Reuters)
Gold rose to a fresh 15-month peak above US$1,300 an ounce on Monday in holiday-thinned trade as an early retreat in the dollar drove prices higher, though it later eased as the US currency pared losses. Spot gold peaked at US$1,303.60 an ounce, the highest since January last year, before easing 0.2% to US$1,290.90 an ounce. US gold futures for June delivery settled up 0.4% at US$1,295.80 an ounce. (Reuters)
Source: aws.co.th / settrade.com
