Expect the SET to trade lower today taking a cue from losses on Wall Street and most global bourses after disappointing corporate earnings from the US and Europe. A big selloff in and weak results of the US consumer sector raises questions on the strength of American consumers. However, market losses should be limited by a surge in oil prices that should propel energy shares. Locally, the green light for the Blue Line Extension and the kick off of Thailand Future Fund with cash raisings for Motorways 7 and 9 indicate the progress of mega infrastructure projects which is positive, but may not be enough to counter negative global sentiment today.
Local issue
Policy rate kept at 1.5%. The Bank of Thailand’s Monetary Policy Committee (MPC) held policy interest rate unchanged at 1.5%, citing the country’s gradual economic recovery in light of public expenditures and tourism expansion. The committee also maintains its estimate of GDP growth this year at 3.1% but voiced concerns over heightening internal downside risks, particularly the drought impact, that could derail private consumption and investment. BoT estimates exports contracting this year by 2%. (Bangkok Post)
Policy rate kept at 1.5%. The Bank of Thailand’s Monetary Policy Committee (MPC) held policy interest rate unchanged at 1.5%, citing the country’s gradual economic recovery in light of public expenditures and tourism expansion. The committee also maintains its estimate of GDP growth this year at 3.1% but voiced concerns over heightening internal downside risks, particularly the drought impact, that could derail private consumption and investment. BoT estimates exports contracting this year by 2%. (Bangkok Post)
PPP gave a nod to Blue Line extension. The Public-Private Partnership (PPP) Policy Committee yesterday approved a 27-km extension of the Blue Line electric train, including Hua Lamphong stretching to Bang Khae and Bang Sue stretching to Tha Phra. The extension program will be financed under a net cost PPP model whereby the government will be responsible for land expropriation fees and the private sector will invest in the rail system and provide operation and maintenance. (Bangkok Post)
Global issues
The dollar fell against a currency basket for the first time in seven days on Wednesday, as investors consolidated gains and booked profits on a day with no major US economic data and as global stock markets were down. The dollar index shed 0.5% to 93.797, moving away from a two-week high of 94.356 set overnight. Against the yen, the dollar was down 0.8% at ¥108.45. The euro rose 0.5% against the dollar to US$1.1427. (Reuters)
USA
The dollar fell against a currency basket for the first time in seven days on Wednesday, as investors consolidated gains and booked profits on a day with no major US economic data and as global stock markets were down. The dollar index shed 0.5% to 93.797, moving away from a two-week high of 94.356 set overnight. Against the yen, the dollar was down 0.8% at ¥108.45. The euro rose 0.5% against the dollar to US$1.1427. (Reuters)
USA
Wall Street stocks tumbled on Wednesday amid disappointing corporate earnings, particularly from the consumer sectors led by Walt Disney, Macy's and Fossil. The DJIA suffered its worst day since February while the S&P500's declined, paring gains from a rally the day before driven by Amazon.com. (Reuters)
Treasury yields fell on Wednesday after the US government saw strong demand for its US$23bn auction of 10-year notes, the second sale of US$62bn in new coupon-bearing debt this week. Benchmark 10-year notes ended up 7/32 in price on the day to yield 1.74%, down from 1.76% on Tuesday. (Reuters)
Europe
European shares slipped on Wednesday as some weak earnings reports pushed the market lower after two days of gains. Among the worst performers was outdoor advertising group JC Decaux, which slumped 10% after a weak 2Q16 outlook led several investment banks to cut their ratings and price targets on the shares. (Reuters)
European shares slipped on Wednesday as some weak earnings reports pushed the market lower after two days of gains. Among the worst performers was outdoor advertising group JC Decaux, which slumped 10% after a weak 2Q16 outlook led several investment banks to cut their ratings and price targets on the shares. (Reuters)
Asia
Japan’s current account surplus largest since 2007: Japan's current account surplus stood at ¥2.98tn (US$27.50bn) in March due to falling imports on oil price declines and a hefty income surplus from overseas investment at the fiscal year's end. That compared with economists' median forecast for a surplus of ¥3.0tn in a Reuters poll, posting the largest surplus since March 2007. It was the 21st straight month of surplus. For the full fiscal year that ended in March, Japan's balance of payment logged a surplus of ¥17.98tn, the biggest in five years thanks to cheap oil and large income gains. (Reuters)
Japan’s current account surplus largest since 2007: Japan's current account surplus stood at ¥2.98tn (US$27.50bn) in March due to falling imports on oil price declines and a hefty income surplus from overseas investment at the fiscal year's end. That compared with economists' median forecast for a surplus of ¥3.0tn in a Reuters poll, posting the largest surplus since March 2007. It was the 21st straight month of surplus. For the full fiscal year that ended in March, Japan's balance of payment logged a surplus of ¥17.98tn, the biggest in five years thanks to cheap oil and large income gains. (Reuters)
The BOJ can still ease monetary policy substantially if inflation fails to pick up, Governor Haruhiko Kuroda said on Wednesday. (Reuters)
China bets on infrastructure, property: China’s local governments are relying on debt again to pump-prime their slack economies. This time they are focusing on infrastructure and property investments and not wasting money propping up over-capacity industries such as loss-making steel plants. 1Q16 investment in infrastructure and real estate surged 19.6% and 6.2%, respectively, providing a respite to the steel, cement, energy and related services sectors. China will invest US$11.9bn in aviation infrastructure this year alone. It has also approved a 27.4bn yuan high-speed rail project linking Beijing's new airport with Hebei province. Overall local government bond issuances in 1Q16 totalled 955.4bn yuan (Reuters)
Commodities
Oil jumped on Wednesday, with Brent up more than 4% for a second day in a row, after the US EIA unexpectedly said crude inventories fell the first time since March, adding to concerns over supply outages in Canada and Nigeria. Brent crude futures settled up US$2.08 (+4.6%) at US$47.60 per barrel. US crude futures rose US$1.57 (+3.5%) to settle at US$46.23. The US EIA said crude inventories fell 3.4mn barrels last week, compared with analysts' expectations for an increase of 714,000 barrels and the API’s build of 3.5mn barrels in preliminary data issued on Tuesday. (Reuters)
Oil jumped on Wednesday, with Brent up more than 4% for a second day in a row, after the US EIA unexpectedly said crude inventories fell the first time since March, adding to concerns over supply outages in Canada and Nigeria. Brent crude futures settled up US$2.08 (+4.6%) at US$47.60 per barrel. US crude futures rose US$1.57 (+3.5%) to settle at US$46.23. The US EIA said crude inventories fell 3.4mn barrels last week, compared with analysts' expectations for an increase of 714,000 barrels and the API’s build of 3.5mn barrels in preliminary data issued on Tuesday. (Reuters)
Gold rebounded from two-week lows on Wednesday as the dollar's rally paused and global shares fell, rekindling investors' appetite for the precious metal. Spot gold rose 0.8% to US$1,275.50 an ounce. US gold futures for June delivery settled up 0.8% at US$1,275.50 an ounce. The metal touched a low of US$1,257.25 on Tuesday, its weakest since April 28. (Reuters)
Copper prices rose on Wednesday as the lower dollar triggered a flurry of fund buying, while the market waited for clues to the strength of demand, particularly in top consumer China. Copper ended up 0.5% at US$4,708 a tonne. It hit US$4,663.50 on Tuesday, its lowest since April 12. (Reuters)
Source: aws.co.th / settrade.com
