Thai shares are poised to trade lower today trailing losses in most global bourses on increasing expectations of a Fed rate hike in June and more rate hikes this year after Fed policymakers took turns striking hawkish comments. Adding to a negative tone, except for Germany, the latest Markit PMI for the US, Eurozone and Japan suggested economic slowdown in May. There is no positive local factor to counter negative global sentiment. However, the EU’s leniency to give Thailand 6 more months to tackle the illegal fishing issues before the next decision alleviates difficulties in the fishery industry and suffering of involving grass-root people.
Local issue
Thailand gets 6 more months to deal with illegal fishing. The European Union (EU) has decided to give Thailand another 6 months to tackle the illegal fishing issue before the next appraisal, said Deputy Prime Minister Prawit Wongsuwon. This is considered to be a good news as EU has yet to issue Thailand the red card. Though many issues have yet to be addressed, the EU still praised the government’s serious effort to deal with the matter. (Bangkok Post)
Thailand gets 6 more months to deal with illegal fishing. The European Union (EU) has decided to give Thailand another 6 months to tackle the illegal fishing issue before the next appraisal, said Deputy Prime Minister Prawit Wongsuwon. This is considered to be a good news as EU has yet to issue Thailand the red card. Though many issues have yet to be addressed, the EU still praised the government’s serious effort to deal with the matter. (Bangkok Post)
VAT refund rules loosen. The Revenue Department has eased regulations, regarding value-added tax (VAT) refund for tourists, for operators who sell products and services to foreign tourists by removing the requirement of minimum paid-up capital, which previously required to have minimum paid-up capital of Bt2.0mn if located in Bangkok and Bt0.5mn in the provinces. (Bangkok Post)
Global issues
Federal Reserve policymakers took turns striking hawkish tones in separate appearances on Monday. Philadelphia Fed President Patrick Harker said the Fed should hike interest rates at a mid-June policy meeting unless data before then shows the US economy is falling off its positive track. San Francisco Fed President John Williams sees 2-3 rate hikes in 2016. Investors will listen for fresh clues to the Fed's intentions when Chair Janet Yellen speaks on Friday. They will also see the second estimate of US 1Q16 growth on the same day. (Reuters)
Federal Reserve policymakers took turns striking hawkish tones in separate appearances on Monday. Philadelphia Fed President Patrick Harker said the Fed should hike interest rates at a mid-June policy meeting unless data before then shows the US economy is falling off its positive track. San Francisco Fed President John Williams sees 2-3 rate hikes in 2016. Investors will listen for fresh clues to the Fed's intentions when Chair Janet Yellen speaks on Friday. They will also see the second estimate of US 1Q16 growth on the same day. (Reuters)
Short-dated US Treasury yields held near two-month highs on Monday as investors weighed the possibility that U.S. interest rates could soon rise. The two-year Treasury yield hit 0.905%, nearing the two-month peak of 0.920% set last Thursday. Benchmark 10-year Treasury notes were up 4/32 in price with a yield of 1.835%, down 1 basis point from Friday. (Reuters)
The US dollar gained against the euro on Monday after Fed officials made hawkish remarks on monetary policy, while the dollar slipped against the yen on Japanese trade data and US resistance to currency intervention from Tokyo. The euro was last down 0.29% against the dollar at US$1.1190. The dollar was last down 0.71% at ¥109.36. (Reuters)
USA
Wall Street lost ground on Monday on mounting concerns that the Federal Reserve could raise interest rates sooner than later. (Reuters)
Wall Street lost ground on Monday on mounting concerns that the Federal Reserve could raise interest rates sooner than later. (Reuters)
The US manufacturing sector crept closer to stagnation in May, with the seasonally adjusted Markit Flash US Manufacturing PMI registering only slightly above the neutral 50.0 mark at 50.5. This was down from 50.8 in April and signalled only a marginal improvement in overall business conditions that was the weakest since the current upturn started in October 2009. (Markit)
Europe
European markets finished lower on Monday with shares in Germany leading the region. The DAX is down 0.74% while France's CAC 40 is off 0.66% and London's FTSE 100 is lower by 0.32%. (CNN)
European markets finished lower on Monday with shares in Germany leading the region. The DAX is down 0.74% while France's CAC 40 is off 0.66% and London's FTSE 100 is lower by 0.32%. (CNN)
The May Flash PMI reinforced the picture of subdued growth of eurozone economic activity, with few signs of any imminent improvement. The Markit Flash Eurozone PMI slipped to a 16-month low of 52.9 in May, down from 53.0 in April. With the PMI having averaged 53.2 in 1Q16, the latest two months’ weak data suggest that economic growth has likely slowed in 2Q16. (Markit)
Upbeat Germany economic activities: May data signalled the first acceleration in German private sector activity growth in 2016 so far. This was highlighted by the Markit Flash Germany Composite Output Index rising from April’s 53.6 to a five-month high of 54.7. Manufacturers and service providers both reported stronger growth which some survey respondents attributed to the processing of backlogs and increased new orders. (Markit)
Moody’s Cuts Credit Ratings on Deutsche Bank Moody’s Investors Service on Monday downgraded Deutsche Bank AG’s credit ratings, citing the bank’s challenges in overhauling operations. The rating firm cut the bank’s senior unsecured debt rating to Baa 2, two notches above junk territory, as it noted the weak financial performance of Germany’s largest bank among low interest rates. (The Wall Street Journal)
Asia
Japan manufacturing conditions deteriorated at a faster rate in May: Markit Flash Japan Manufacturing PMI was at 47.6 in May, versus 48.2 in April. The Flash headline PMI signals sharpest decline in operating conditions since December 2012. (Reuters)
Japan manufacturing conditions deteriorated at a faster rate in May: Markit Flash Japan Manufacturing PMI was at 47.6 in May, versus 48.2 in April. The Flash headline PMI signals sharpest decline in operating conditions since December 2012. (Reuters)
China stocks edged up on Monday, but trading remained light, with the market's bearish trend seen persisting as the government holds off on further policy stimulus. (Reuters)
Chinese steel and iron ore futures sank to their lowest since March. Rebar fell by the 6% maximum allowed by the Shanghai Futures Exchange to a session low of 1,930 yuan (US$295), its weakest since March 7. It closed down 5.2% at 1,947 yuan. On the Dalian Commodity Exchange, iron ore also dropped by its 6% downside limit to 350 yuan a tonne, its lowest since March 4. It closed down 5% at 353.50 yuan. (Reuters)
Commodities
Oil prices slid on Monday after Iran vowed to ramp up output and as a slump in the number of rigs drilling for crude in the US held steady after declining for eight straight weeks. Brent's front-month fell 37 cents to settle at US$48.35 in a fourth straight day of losses, matching a similar streak in mid-April. US crude fell 33 cents to US$48.08 a barrel. (Reuters)
Oil prices slid on Monday after Iran vowed to ramp up output and as a slump in the number of rigs drilling for crude in the US held steady after declining for eight straight weeks. Brent's front-month fell 37 cents to settle at US$48.35 in a fourth straight day of losses, matching a similar streak in mid-April. US crude fell 33 cents to US$48.08 a barrel. (Reuters)
Gold dipped to a 3-1/2-week low on the Fed rate hike expectations, but prices came off their lows as late-day short-covering entered the market. Spot gold was down 0.1% at US$1,250.96 an ounce after falling earlier to $1,242.63 an ounce, the lowest since April 28. (Reuters)
Copper prices fell on Monday towards the three-month lows hit last week as expectations that the Fed will raise interest rates in June reinforced worries about weak demand growth in top consumer China. Benchmark copper on the LME closed down 0.4% at US$4,562 a tonne, having last week touched US$4,540, its lowest since the middle of February. (Reuters)
Source: aws.co.th / settrade.com
