Thai shares are set to trade lower today following a lackluster performance on Wall Street overnight. Underwhelming corporate reports and economic data from the US and Europe in the last two weeks caused bearish sentiment and clouded the path of interest rate hikes although many Fed officials said investors were too pessimistic. Local factors are mixed today. While many Thai corporate results were upbeat in 1Q16 and investors’ sentiment has improved, the BOT’s and UTCC’s concerns over the adverse impact of the prevailing drought on the economy need to be reckoned with.
Local issue
Rising on investor sentiment. The Fetco Investor Confidence Index for the three months ahead in May (May – July) advanced for the third straight month by 6.86% to 102.74, from April's 96.14. The survey found the confidence of all investor types improved, led by foreign investor confidence surging 26.98% from the previous survey with optimism on government measures would revitalize the economy. Retail investors cited capital inflows as the main reason for their improved confidence. (Bangkok Post)
Rising on investor sentiment. The Fetco Investor Confidence Index for the three months ahead in May (May – July) advanced for the third straight month by 6.86% to 102.74, from April's 96.14. The survey found the confidence of all investor types improved, led by foreign investor confidence surging 26.98% from the previous survey with optimism on government measures would revitalize the economy. Retail investors cited capital inflows as the main reason for their improved confidence. (Bangkok Post)
UTCC lowers 2016 GDP growth forecast to 2.5-3.5%, down from 3.5-4.0%, on concerns about lingering drought, high debt burden, and a weaker global economic growth outlook dimming the exports sector. The economic outlook in 2017 would improve with 2.9-3.9% estimated growth supported by a recovering global economy that would push Thai shipments as well as the government’s investment in infrastructure and private investment. (The Nation)
Thailand's economic growth is expected to have cooled slightly in 1Q16 from 4Q15 as consumption slowed, offsetting the effects from government spending and improving tourism, a Reuters poll showed. GDP was forecast to have expanded a seasonally adjusted 0.6% in 1Q16 after 0.8% growth in 4Q15, when there was tax break spending and consumers rushed to buy cars ahead of tax changes in 2016. On an annual basis, growth was forecast at 2.8% in 1Q16, the same as in 4Q15. That would leave full-year growth at 3.0% for 2016. Growth last year was 2.8%, up from 0.8% in 2014. (Reuters)
Global issues
US Treasury prices fell on Thursday after a Federal Reserve official said the Fed should raise interest rates if data confirms a stronger jobs market and inflation outlook in 2Q16. Benchmark 10-year notes ended down 9/32 in price to yield 1.76%, up from 1.73% late on Wednesday. The yields have fallen from 1.94% on April 26. (Reuters)
US Treasury prices fell on Thursday after a Federal Reserve official said the Fed should raise interest rates if data confirms a stronger jobs market and inflation outlook in 2Q16. Benchmark 10-year notes ended down 9/32 in price to yield 1.76%, up from 1.73% late on Wednesday. The yields have fallen from 1.94% on April 26. (Reuters)
The dollar gained against the yen and euro on Thursday. The yen fell to a two-week low against the dollar, pressured by speculation that the BOJ could expand its monetary stimulus as soon as next month. The dollar rose 0.6% to ¥109.06, after earlier hitting a two-week peak of ¥109.39 and recovering from a 18-month low of ¥105.55 on May 3. The euro shed 0.4% to settle at US$1.1375 on Thursday. (Reuters)
USA
Wall Street closed mixed on Thursday, with gains in telecommunications and consumer staples helping make up for a tumble in Apple to a two-year low as worries festered about slowing demand for iPhones. A market rally from February lows petered out in the last two weeks amid underwhelming corporate reports and economic data that clouded the path of interest rate increases this year. (Reuters)
Wall Street closed mixed on Thursday, with gains in telecommunications and consumer staples helping make up for a tumble in Apple to a two-year low as worries festered about slowing demand for iPhones. A market rally from February lows petered out in the last two weeks amid underwhelming corporate reports and economic data that clouded the path of interest rate increases this year. (Reuters)
US jobless claims increased 20,000 to a seasonally adjusted 294,000 last week, the highest level since late February 2015. It was the third consecutive week of increases in first-time applications for jobless benefits. Economists had forecast initial claims slipping to 270,000 in the latest week. Despite the jump, claims have now remained below 300,000, a threshold associated with a healthy labor market, for 62 straight weeks, the longest stretch since 1973. (Reuters)
US import prices increased 0.3% in April after a similar gain in March. The rise last month reflected a pick-up in oil prices and the dollar's depreciation. (Reuters)
Rosengren: Fed needs to hike rates if data call for: The Federal Reserve should raise interest rates again if data from 2Q16 confirms the US labor market is near full strength and inflation is on track to accelerate, Boston Fed President Eric Rosengren said on Thursday. The comments by Rosengren, a voting member this year on the Fed's rate-setting committee, point to growing pressure within the US central bank to raise rates in the coming months. (Reuters)
Europe
European stocks fell on Thursday, weighed down by some disappointing earnings updates, while Bayer and BASF dropped on reports they could be interested in buying Monsanto. (Reuters)
Asia
Talk of more stimulus measures from the BOJ increased after prominent Japanese academic Takatoshi Ito said on Thursday that Japan's central bank may expand monetary stimulus either in June or July. Ito has close ties to BOJ Governor Haruhiko Kuroda. (Reuters)
Talk of more stimulus measures from the BOJ increased after prominent Japanese academic Takatoshi Ito said on Thursday that Japan's central bank may expand monetary stimulus either in June or July. Ito has close ties to BOJ Governor Haruhiko Kuroda. (Reuters)
Nissan Motor has agreed to buy a 34% stake in Mitsubishi Motors Corp, taking de facto control with a US$2.2bn bet that bails out its smaller, scandal-hit rival. The deal is a lifeline for Mitsubishi Motors, which is mired in its third scandal in two decades and has had US$3bn wiped off its market value after confessing to manipulating fuel economy data. (Reuters)
Beijing's announcement of a 4.7tn yuan (US$724bn) transport infrastructure investment plan over the next three years to boost its economy and ease fears of a possible shift in economic policies (Reuters)
Chinese commercial banks' NPL ratio rose to 1.75% at end-March compared with a 1.67% at the end of 2015. The banking sector's outstanding NPLs stood at 1.39tn yuan (US$213.55bn), up from 1.27tn yuan a quarter earlier. Chinese commercial banks' capital adequacy ratio was 13.37% at end of 1Q16. (Reuters)
Chinese steel and iron ore futures fell drastically on Thursday, as the country's exchanges unveiled more measures aimed at dampening the type of speculative trading behind a powerful rally last month. Rebar, or reinforced steel used in construction, closed down 3.6% at 2,074 yuan (US$319) a tonne on the Shanghai Futures Exchange, pulling further away from a 19-month high of 2,787 yuan reached on April 21. On the Dalian Commodity Exchange, the most-traded iron ore contract slumped 3.4% to 373 yuan a tonne, down 25.7% from its April peak. Shanghai hot rolled coil dropped 3.1% and Dalian coke, another steel raw material, fell 1.8%. (Reuters)
Commodities
Oil prices rose 1% on Thursday, with US crude hitting six-month highs as investors weighed a forecast for tighter global supplies against signs of another storage build at the hub for US crude futures. Brent crude futures settled up 48 cents at US$48.08 per barrel. US crude's West Texas Intermediate (WTI) futures rose 47 cents to settle at US$46.70. It hit a six-month high of US$47.02. (Reuters)
Oil prices rose 1% on Thursday, with US crude hitting six-month highs as investors weighed a forecast for tighter global supplies against signs of another storage build at the hub for US crude futures. Brent crude futures settled up 48 cents at US$48.08 per barrel. US crude's West Texas Intermediate (WTI) futures rose 47 cents to settle at US$46.70. It hit a six-month high of US$47.02. (Reuters)
Gold fell on Thursday as a strengthening dollar prompted some buyers to cash in gains after its biggest daily rise this month. Spot gold was down 0.6% at US$1,269.76 an ounce. The metal had touched a 15-month high last week at US$1,303.60, before slipping back below US$1,300. US gold futures for June delivery settled down 0.3% at US$1,271.20. (Reuters)
Source: aws.co.th / settrade.com
