Expect the SET to trade lower today following negative leads from Wall Street and European bourses as concerns over the Brexit vote and the impact on the global economy and financial markets drove investors to safer assets like US Treasuries, bonds, the yen, Swiss franc and gold. Falling oil prices also pressure energy stocks. Local factors are mostly negative today. Consumer confidence dropped again in May while sugar drinks tax might jeopardize the just-recovering sugar industry, after several bad years, and sugar-cane farmers. The only bright spot is the bright prospects for Thailand for trade and investment in CLMV countries.
Local issue
Consumer confidence fell to 8-month low. A survey by the University of the Thai Chamber of Commerce (UTCC) yesterday reported that the consumer confidence index dipped down to 72.6 points in May from 72.7 in April, falling for the fifth-consecutive month and hitting an eight-month low. The decline was attributed to slower-than-expected economic recovery, severe drought conditions, low commodity prices, and weak exports. (Bangkok Post)
Consumer confidence fell to 8-month low. A survey by the University of the Thai Chamber of Commerce (UTCC) yesterday reported that the consumer confidence index dipped down to 72.6 points in May from 72.7 in April, falling for the fifth-consecutive month and hitting an eight-month low. The decline was attributed to slower-than-expected economic recovery, severe drought conditions, low commodity prices, and weak exports. (Bangkok Post)
Sugary drinks tax progressing. The Excise Department expects to decide on whether it will tax beverages with high sugar content within one month. Currently, a working panel set up by the Finance Ministry is studying how much consumption of such drinks is damaging health, the amount of sugar content and type of drinks that should be taxed, as well as tax impact on sugar-cane farmers, said director-general Somchai Pulsawas. (Bangkok Post)
Activities between Thailand and CLMV tipped to rise. Commerce Minister Apiradi Tantraporn said the Ministry plans to set up a trade and investment-promotion network and lead Thai business groups to explore trade and investment opportunities in CLMV, as the Ministry sees further potential for trade and investment among the region. Currently, the Ministry has commercial offices in CLMV nations to provide trade information and advisory services to Thai business operators pertaining to marketing, investment, business laws/regulations and business matching. (The Nation)
NOK (Bt8.00) yesterday issued a new tagline slogan “Smiling Across Asia” in a bid to revitalize its tarnished brand image and to reflect its wider network after partnership with seven other Asia-Pacific airlines known as The Value Alliance (VA). VA gives Nok Air an Asia-Pacific network, covering more than 160 destinations from 17 hubs with a collective fleet of 176 aircraft across the region. NOK intends to launch its first scheduled flights to southern China in November from its base at Bangkok's Don Mueang airport. (Bangkok Post)
Global issues
US Treasury yields fell to the lowest levels since February on Thursday as falling oil and stock prices and concerns over the Brexit referendum increased demand for safe-haven debt amid concerns about global growth. Thirty-year bonds ended up 23/32 in price to yield 2.48%, the lowest level since Feb. 11. Benchmark 10-year notes gained 8/32 in price to yield 1.68%, the lowest since 24 Feb. (Reuters)
US Treasury yields fell to the lowest levels since February on Thursday as falling oil and stock prices and concerns over the Brexit referendum increased demand for safe-haven debt amid concerns about global growth. Thirty-year bonds ended up 23/32 in price to yield 2.48%, the lowest level since Feb. 11. Benchmark 10-year notes gained 8/32 in price to yield 1.68%, the lowest since 24 Feb. (Reuters)
The dollar rose against other currencies on Thursday, supported by an unexpected drop in domestic jobless claims and a stronger-than-expected rise in wholesale sales in April, soothing some worries about US economic growth decelerating in 2Q16. The dollar index rebounded from five-week lows set on Wednesday. It was last up 0.5% at 94.063. The yen, which investors prefer in times of market uncertainty, reached a three-year peak against the euro and a five-week high versus the US dollar. (Reuters)
USA
Wall Street shares lost ground on Thursday after three days of gains as oil prices fell and global growth worries drove investors to more defensive and high-dividend stocks and safer assets like bonds. (Reuters)
Wall Street shares lost ground on Thursday after three days of gains as oil prices fell and global growth worries drove investors to more defensive and high-dividend stocks and safer assets like bonds. (Reuters)
US jobless claims unexpectedly fell last week, pointing to sustained strength in the labor market despite a sharp slowdown in hiring last month. Initial claims for state unemployment benefits declined by 4,000 to a seasonally adjusted 264,000 last week. Economists forecast initial claims rising to 270,000 in the latest week. Claims have now been below 300,000, a threshold associated with a strong job market, for 66 straight weeks, the longest streak since 1973. (Reuters)
US wholesale inventories recorded their largest increase in 10 months in April with rising wholesale sales, suggesting inventories could be a boost to economic growth in 2Q16. Wholesale inventories increased 0.6% in April. Inventories for March were revised up to show a 0.2% gain instead of the previously reported 0.1% rise. Economists had forecast wholesale inventories nudging up 0.1% in April as stocks of machinery and farm products rose. Sales at wholesalers jumped 1.0% in April after advancing 0.6% in March. With sales increasing solidly for a second straight month, it would take wholesalers 1.35 months to clear shelves, down from 1.36 months in March. (Reuters)
The US economy is on track to grow 2.5% YoY in 2Q16 following the latest data on wholesale sales and inventories, the Atlanta Federal Reserve's GDPNow forecast model showed on Thursday. The latest GDP estimate was unchanged from the pace calculated on 3 Jun. Following the latest inventory readings, the drag on 2Q16 GDP from inventory investment was reduced to 0.23 percentage point from 0.27 percentage point, the Atlanta Fed said. (Reuters)
Europe
European shares fell for a second straight day on Thursday weighed down by continued weakness among financial sector stocks, the recent strength of the euro, weak non-oil commodities as well as caution ahead of a UK vote later this month on whether to remain in the EU. (Reuters)
European shares fell for a second straight day on Thursday weighed down by continued weakness among financial sector stocks, the recent strength of the euro, weak non-oil commodities as well as caution ahead of a UK vote later this month on whether to remain in the EU. (Reuters)
Asia
BOJ won't rule out more easing: BOJ Deputy Governor Hiroshi Nakaso warned of lingering global economic uncertainty and signs of weakness in private consumption, signaling the central bank's readiness to expand monetary stimulus if needed to hit its inflation target. (Reuters)
BOJ won't rule out more easing: BOJ Deputy Governor Hiroshi Nakaso warned of lingering global economic uncertainty and signs of weakness in private consumption, signaling the central bank's readiness to expand monetary stimulus if needed to hit its inflation target. (Reuters)
China and Taiwan financial markets are closed today for a national holiday (Tuen Ng Day). The markets will resume trade on 13 Jun. (Reuters)
Commodities
Oil prices settled down on Thursday, snapping a three-day rally after notching another 2016 high, as a strong dollar sparked profit-taking in crude futures by investors. Continuous threats by militants against Nigeria's oil industry and fear of more security incidents that could hit supplies worldwide, however, limited losses in crude. Brent crude futures settled down 56 cents at US$51.95 a barrel. US crude futures fell 67 cents to settle at US$50.56. (Reuters)
Oil prices settled down on Thursday, snapping a three-day rally after notching another 2016 high, as a strong dollar sparked profit-taking in crude futures by investors. Continuous threats by militants against Nigeria's oil industry and fear of more security incidents that could hit supplies worldwide, however, limited losses in crude. Brent crude futures settled down 56 cents at US$51.95 a barrel. US crude futures fell 67 cents to settle at US$50.56. (Reuters)
Gold extended its rally to a three-week high on Thursday, supported by falling US Treasury yields and world equity markets, and the outlook for US interest rates. Spot gold was up 0.6% at US$1,269.66 an ounce, after rising 0.8% to US$1,271.31, the highest since May 18. US gold futures for August delivery settled down 0.8% at US$1,272.70. (Reuters)
Source: aws.co.th / settrade.com
