Expect the SET to fall today trailing losses on global bourses as weak China and UK manufacturing surveys, EU’s downgrades to the euro zone growth forecast and a surprise rate cut by Australia’s central bank rekindled fears of slowing global growth, dampening risk appetite and bolstering demand for safe haven assets, particularly the yen. Most local factors today are negative as well. Consumer confidence hit a 7-month low in April. Retailers are worrying about slowed retail trade and asking for more stimulus measures from the government.
Local issue
Consumer confidence hit 7-month low in April. Thai Chamber of Commerce (TCC) reported the consumer confidence index in April at 72.7 points, compared to 73.5 in March, falling for a fourth straight month and hitting a seven-month low. TCC cited that people remain cautious about the slower-than-expected economic recovery, widespread drought and low farm prices, along with the sluggish global economic recovery. (Bangkok Post)
Consumer confidence hit 7-month low in April. Thai Chamber of Commerce (TCC) reported the consumer confidence index in April at 72.7 points, compared to 73.5 in March, falling for a fourth straight month and hitting a seven-month low. TCC cited that people remain cautious about the slower-than-expected economic recovery, widespread drought and low farm prices, along with the sluggish global economic recovery. (Bangkok Post)
Retail industries expect stimulus measures from government. The Thai Retailers Association (TRA) expects retail industry to grow only 2.8% this year, compared to average growth of 8% p.a. in 2002-12 and 3% a year in 2012-14. The industry would be weighed by lower consumption by mid-to-low-income consumers who rely on agricultural income. TRA suggested several measures to the government to help buoy the industry, such as Village Funds for low-income consumers, and shopping-tourism policy making Thailand a real shopping destination to attract foreign traveler consumption. (The Nation)
Section 44 to fast-track Suvarnabhumi infrastructures. The government is now considering using Section 44 of the interim constitution to speed up the approval of a new runway at Suvarnabhumi airport, as well as Environmental Impact Assessment (EIA) progress for the airport project. (Bangkok Post)
Global issues
Safe-haven demand rises: US Treasury yields fell broadly on Tuesday to their lowest levels in nearly two weeks after weak Chinese data and a surprise interest rate cut in Australia raised concerns about the global economy, boosting demand for safe-haven US government debt. Yields of US Treasuries touched their lowest levels since April 20. Benchmark 10-year notes rose 20/32 in price to yield 1.798%, down from 1.865% on Monday and 1.941% last Tuesday. (Reuters)
Dollar firms on US rate talk: The US dollar moved higher after a Federal Reserve official pointed to the possibility of two interest rate hikes in 2016. The dollar index, which measures the greenback's strength against six major currencies, finished Tuesday's session up 0.3% after hitting a 15-month low earlier in the session, recording its first increase in seven days. (Reuters)
USA
Wall Street shares lost ground on Tuesday after weak economic data in China and Europe reignited worries about global growth, while oil prices dropped for a second day, dragging down energy shares. The biggest economic release this week is monthly US non-farm payrolls, due on Friday. Last week, US data showed tepid growth in 1Q16 GDP and a softening inflation. (Reuters)
Wall Street shares lost ground on Tuesday after weak economic data in China and Europe reignited worries about global growth, while oil prices dropped for a second day, dragging down energy shares. The biggest economic release this week is monthly US non-farm payrolls, due on Friday. Last week, US data showed tepid growth in 1Q16 GDP and a softening inflation. (Reuters)
The US could see two further interest rate rises this year but uncertainties abound including the impact on the US economy should Britain vote to leave the EU, Atlanta Fed President Dennis Lockhart said on Tuesday. On Monday, San Francisco Fed President John Williams reiterated his view that the US economy is ready for higher interest rates, but flagged the risk of broad-based declines in asset prices as a result. (Reuters)
Europe
European shares fell to a three-week low on Tuesday, with Commerzbank leading the decline after a slump in profits and mining stocks falling along with metals prices. (Reuters)
European shares fell to a three-week low on Tuesday, with Commerzbank leading the decline after a slump in profits and mining stocks falling along with metals prices. (Reuters)
The EU cut its economic growth forecast for the 19-country euro zone due to subdued inflation this year and warned of high external and internal risks to the bloc's economy. It cut its GDP growth estimate for the euro zone down to 1.6% for this year, from 1.7% in its February forecast, less than the 1.7% growth of 2015. The GDP is projected to expand 1.8% in 2017, down from a 1.9% in its previous forecast. (Reuters)
UK factory output contracted for the first time in three years in April as concerns about the global economy and troubles on the high street exerted a drag on activity. The Markit/CIPS survey manufacturing PMI stood at 49.2 in April, marking the first time output has contracted since March 2013. This was well below March reading of 50.7, and under the 50 level that divides growth from contraction. Economists expected the index to rise to 51.2. (The Telegraph)
Poll: Brexit votes lead: ICM poll this week shows 44% of the British population would vote to remain in the European Union while 45% would vote to leave. Last week the ratio was 46 Brexit vs 44 Bremain. Britain will hold a referendum on European Union membership on June 23. (Reuters)
Asia
Activity at China's factories shrank for the 14th straight month in April as demand stagnated, forcing companies to shed jobs at a faster pace, adding to questions over whether the world's second-largest economy is recovering. The Caixin/Markit Manufacturing PMI fell to 49.4 last month, below market expectations of 49.9 and recoiling slightly from March's 49.7. The index has been below the 50 point which marks expansion in activity from contraction since March 2015, though the rate of decline has eased recently, raising hopes that the sector's prolonged slump may be bottoming out. (Reuters)
Activity at China's factories shrank for the 14th straight month in April as demand stagnated, forcing companies to shed jobs at a faster pace, adding to questions over whether the world's second-largest economy is recovering. The Caixin/Markit Manufacturing PMI fell to 49.4 last month, below market expectations of 49.9 and recoiling slightly from March's 49.7. The index has been below the 50 point which marks expansion in activity from contraction since March 2015, though the rate of decline has eased recently, raising hopes that the sector's prolonged slump may be bottoming out. (Reuters)
The yen jumped to an 18-month high against the dollar on Tuesday, extending gains on persistent doubts the BOJ will intervene to stem a dramatic rise that has undermined attempts to reflate the economy. The yen has risen over 12% against the dollar so far this year. Further gains would intensify speculation of BOJ intervention sooner rather than later, as Japanese politicians have raised concerns about the yen's run-up. (Reuters)
Commodities
Oil prices fell for a second day on Tuesday, retreating further from the year's highs hit last week, as rising output renewed worries about the global glut of crude. Brent crude futures settled down 86 cents (-1.9%) at US$44.97 a barrel. US crude futures fell US$1.13 (-2.5%) to US$43.65. (Reuters)
Oil prices fell for a second day on Tuesday, retreating further from the year's highs hit last week, as rising output renewed worries about the global glut of crude. Brent crude futures settled down 86 cents (-1.9%) at US$44.97 a barrel. US crude futures fell US$1.13 (-2.5%) to US$43.65. (Reuters)
Gold turned lower on Tuesday, after nearing the prior session's 15-month top, as the US dollar moved higher after a Fed official pointed to the possibility of two interest rate hikes in 2016. Spot gold was down 0.4% at US$1,285.69 an ounce, off a session high of US$1,302. It reached its strongest level since January 2015 at US$1,303.60 an ounce on Monday. (Reuters)
Source: aws.co.th / settrade.com
