Expect the SET to edge higher today supported by broadly positive local factors in light of fragile sentiment due to the neck-to-neck Brexit vote on Thursday. An opinion poll published on Tuesday showed the "Remain" campaign lead had shrunk. Yellen’s prudent tone further added to a cautious mood. Locally, the TCC’s optimistic view about the Thai economy in 2H16, the FTI’s confidence improvement in May and upbeat auto reports in May are very encouraging.
Local issue
Street anticipates unchanged policy rate. According to a Reuter poll, all 27 economists forecast the Monetary Policy Committee (MPC) to maintain one-day repurchase rate unchanged at 1.5% at their meeting today, in spite of slow economic recovery, as further cuts may have little impact to help domestic activity but instead add risks to financial stability. The street also believes the BoT is unlikely to move before a referendum on British membership in the EU tomorrow. (Bangkok Post)
Street anticipates unchanged policy rate. According to a Reuter poll, all 27 economists forecast the Monetary Policy Committee (MPC) to maintain one-day repurchase rate unchanged at 1.5% at their meeting today, in spite of slow economic recovery, as further cuts may have little impact to help domestic activity but instead add risks to financial stability. The street also believes the BoT is unlikely to move before a referendum on British membership in the EU tomorrow. (Bangkok Post)
TCC expects improvement in 2H16. The Thai Chamber of Commerce (TCC) estimates the economy would expand faster with a 3.3% growth rate in the latter half on the back of a 2.6% rise in exports and 0.9% inflation, while farmers would earn more income and the effects of stimulus measures take hold. Full-year economic growth for 2016 would be 3.2-3.5% while exports would expand by 0.8% and inflation would be at 0.4%. (Bangkok Post)
Farmers’ aid scheme for new season gets a nod. The cabinet yesterday approved a Bt45.6bn farmers’ assistance scheme for the 2016-2017 season. The scheme includes Bt1,000 a rai in cash handouts on a maximum of 10 rai per household to rice farmers, debt repayment suspension period of two years offered to BAAC’s customers whom borrow no more than Bt500,000, a farmers’ training program, as well as crop insurance subsidies provided jointly by the government and the BAAC. (Bangkok Post)
Confidence on Thai industries rose in May. Federation of Thai Industries said the Thai Industries Sentiment Index rose to 86.4 in May from 85 in April thanks to reduced concern over the drought, increasing orders of education-related products in May, coupled with government stimulus policies. The forward-looking industries sentiment index over the next three months also rose from 97.2 in April to 98.7 in May ahead of activities on government infrastructure investment. (Bangkok Post)
Auto output and sales rose in May. Federation of Thai Industries reported automobile production in May surged 24.7% YoY to 168,394 units. Domestic car sales in May improved 15.9% YoY to 66,019 units, while the export of finished cars in May edged up 11.9% YoY to 99,547 units with value soared 26.3% to Bt54.99bn thanks to a higher sales of PPV cars. (Bangkok Post)
Global issues
The latest poll showed the campaign for Britain to stay in the EU has lost some of its lead ahead of Thursday's referendum on EU membership. The telephone poll, which was conducted by Survation for spread-betting firm IG on Monday, put support for "In" at 45%, ahead of "Out" on 44%, IG said. Survation's previous survey, published late on Saturday, had shown "In" on 45%, 3 points ahead of "Out". (Reuters)
The latest poll showed the campaign for Britain to stay in the EU has lost some of its lead ahead of Thursday's referendum on EU membership. The telephone poll, which was conducted by Survation for spread-betting firm IG on Monday, put support for "In" at 45%, ahead of "Out" on 44%, IG said. Survation's previous survey, published late on Saturday, had shown "In" on 45%, 3 points ahead of "Out". (Reuters)
Yellen: Fed cautious on rates due to US hiring slowdown, Brexit: Federal Reserve Chair Janet Yellen gave regularly scheduled testimony on Tuesday to the US Senate Banking Committee and expressed general optimism about the economy and played down the risk of a recession. She acknowledged that US job hiring lost momentum of improvement in the last several months and said the Fed would be cautious about interest rate increases until it is clear the job market is holding up. She acknowledged that immediate risks, like the potential fallout from Britain's 23 Jun vote on whether to leave the EU, could darken the US economic outlook. (Reuters)
Top German court clears ECB's OMT bond buying scheme: Germany's Constitutional Court rejected on Tuesday a challenge of the ECB's emergency bond-buying scheme, clearing a never-used crisis fighting tool. Conceived at the height of Europe's debt crisis, the Outright Monetary Transactions (OMT) programme was launched as part of ECB President Mario Draghi's pledge to do "whatever it takes" to preserve the euro, giving the bank broad powers to buy the debt of financially strained members. (Reuters)
The dollar rose on Tuesday as investors sold the British pound and the euro on news that the gap had narrowed in the latest poll on Britain's referendum on EU membership. The euro fell 0.5% to US$1.1255, holding just above a session low of US$1.1243. The dollar index rose 0.45% to 94.031. (Reuters)
US Treasury yields rose to one-and-a-half week highs on Tuesday after the Treasury saw soft demand for a sale of five-year notes and as investors evaluated whether Britain will vote to remain in the EU on Thursday. Benchmark 10-year notes were last down 9/32 in price to yield 1.699%, up from 1.670% late on Monday. (Reuters)
USA
Wall Street shares rose on Tuesday, led by gains in technology shares as Fed Chair Janet Yellen was optimistic about the economy and played down the risk of a recession, while concern over the upcoming British referendum remained subdued. (Reuters)
Wall Street shares rose on Tuesday, led by gains in technology shares as Fed Chair Janet Yellen was optimistic about the economy and played down the risk of a recession, while concern over the upcoming British referendum remained subdued. (Reuters)
Europe
European shares rose on Tuesday as worries that British would choose to leave the European Union eased, although caution prevailed over what is expected to be a close vote. (Reuters)
European shares rose on Tuesday as worries that British would choose to leave the European Union eased, although caution prevailed over what is expected to be a close vote. (Reuters)
German investor sentiment improved unexpectedly in June, reflecting their confidence in the resilience of Europe's largest economy despite an uncertain global backdrop, a survey by think tank ZEW showed on Tuesday. ZEW said its monthly survey showed a rise in its economic sentiment index to 19.2 points in June from 6.4 the previous month. That compared with the Reuters consensus forecast for a fall to 4.7. (Reuters)
Asia
Campaigning for an election to Japan's upper house of parliament begins on Wednesday. PM Shinzo Abe's coalition is in no danger of losing power in the election but he needs a solid win to keep his LDP lawmakers in line and perhaps stay on another three years after his tenure as LDP president expires in 2018. Abe is casting the 10 Jul election for half the seats in the 242-member chamber as a referendum on his decision to delay a planned hike in an unpopular sales tax and his "Abenomics" recipe of hyper-easy monetary policy, spending and reform. (Reuters)
Campaigning for an election to Japan's upper house of parliament begins on Wednesday. PM Shinzo Abe's coalition is in no danger of losing power in the election but he needs a solid win to keep his LDP lawmakers in line and perhaps stay on another three years after his tenure as LDP president expires in 2018. Abe is casting the 10 Jul election for half the seats in the 242-member chamber as a referendum on his decision to delay a planned hike in an unpopular sales tax and his "Abenomics" recipe of hyper-easy monetary policy, spending and reform. (Reuters)
China's manufacturing sector activity contracted in June, indicating worsening conditions after official data for May showed signs of stabilisation. The Minxin Small and Medium Enterprise (SME) Index dropped to a four-month low of 43.2 in June compared with the previous month's reading of 45.8. (Reuters)
Defaults in China's domestic bond markets are likely to continue rising as corporate profitability remains under pressure and debt burdens increase, rating agency S&P Global said on Tuesday. The number of bond defaults in the year to date period has already exceeded the total for all of 2015, with more than 20 bonds in default after more than 10 issuers missed their interest or principal payments. (Reuters)
Commodities
Oil prices dipped on Tuesday on profit taking after a two-day rally, then rose in post-settlement trade after data showing a larger-than-expected draw in US crude stockpiles. Crude inventories fell by 5.2mn barrels last week, the American Petroleum Institute (API) said. The trade group's figures were triple the draw of 1.7mn barrels forecast by analysts. The US EIA will issue official stockpiles data on Wednesday. Brent crude futures settled down 3 cents at US$50.62 a barrel, after falling more than US$1 to a session low of US$49.46. The contract had gained 7% in the last two sessions. US crude futures' expiring July front-month contract closed down 52 cents (-1%) at US$48.85 a barrel. (Reuters)
Oil prices dipped on Tuesday on profit taking after a two-day rally, then rose in post-settlement trade after data showing a larger-than-expected draw in US crude stockpiles. Crude inventories fell by 5.2mn barrels last week, the American Petroleum Institute (API) said. The trade group's figures were triple the draw of 1.7mn barrels forecast by analysts. The US EIA will issue official stockpiles data on Wednesday. Brent crude futures settled down 3 cents at US$50.62 a barrel, after falling more than US$1 to a session low of US$49.46. The contract had gained 7% in the last two sessions. US crude futures' expiring July front-month contract closed down 52 cents (-1%) at US$48.85 a barrel. (Reuters)
Gold fell to a 10-day low on Tuesday as global shares rose and expectations that Britain could vote to leave the EU receded. Bullion extended losses after US Fed Chair Janet Yellen said global risks and a US hiring slowdown warrant a cautious approach to raising interest rate. Spot gold fell as much as 1.9% to a low of US$1,265.40 an ounce and was down 1.6% at US$1,269.80. US gold settled down 1.5% at US$1,272.50. (Reuters)
Source: aws.co.th / settrade.com
