Expect the SET to trade in a tight range today after Friday’s weak US non-farm payrolls report cast doubt on Fed’s near-term rate hike. Investors now turn to Janet Yellen's speech later today for clues about the Fed’s next move. Falling oil prices will dampen energy shares again. Local factors today tilt towards the positive end. Continued increases in the number of tourist arrivals and the government’s financial support for SMEs and farmers through the BAAC are a boon to the involved groups of people and the overall Thai economy.
Local issue
Rising foreign tourists. Tourism and Sports Ministry disclosed international tourist arrivals to Thailand surged 12.5% YoY to 14.2mn in the first five months of this year for tourism revenue of Bt709bn, up 17.3% YoY. (Bangkok Post)
Rising foreign tourists. Tourism and Sports Ministry disclosed international tourist arrivals to Thailand surged 12.5% YoY to 14.2mn in the first five months of this year for tourism revenue of Bt709bn, up 17.3% YoY. (Bangkok Post)
Property tax to be considered tomorrow. The long-delayed draft bill on land and buildings tax will go to the cabinet for consideration tomorrow, said permanent secretary for finance Somchai Sujjapongse. The bill sets tax ceiling rates at 0.2% of appraisal value for land used for agriculture, 0.5% for residences, 2% for commercial uses, and 5% for undeveloped land, yet the actual levy rate will be announced later. The tax will be levied only on homes and land used for agriculture with appraisal price starting from Bt50mn and will be taxed on the amount exceeding Bt50mn. This law is expected to be effective in 2017. (Bangkok Post)
BAAC affirms Bt72bn targeted loans to SMEs. Bank for Agriculture and Agricultural Cooperatives (BAAC) believes it will be able to provide Bt72bn worth of special loans to SMEs covering 7,305 tambon under the “One Tambon, One Agriculture” program by 31 Mar next year. The bank had already approved loans worth Bt12.5bn under the program as of 31 May after its launch in February. The funding went to 2,701 agriculture SMEs in 2,701 tambon. (Bangkok Post)
BAAC helps pay premium to farmers. Bank for Agriculture and Agricultural Cooperatives (BAAC) and the government will jointly subsidize a premium for crop insurance of 40 baht a rai, covering 30mn rai of rice fields across the country, to farmers who are granted the bank’s loans. The BAAC will set ceiling areas for crop insurance coverage for each farmer later. (Bangkok Post)
Global issues
Weak US job reports: The US economy added just 38,000 jobs in May, well below the consensus estimate of 164,000 and the smallest gain since September 2010. The unemployment rate declined by 0.3 percentage point to 4.7% in May. Although Cleveland Federal Reserve President Loretta Mester said on Saturday that the latest disappointing US jobs number has not changed the overall economic picture and gradual rate hikes remain appropriate, traders significantly cut bets that the Fed will raise rates at its meetings in June and July. Investors will now turn to Fed Chair Janet Yellen's speech later today for clues about the central bank's next move. (Reuters)
US Treasury debt yields tumbled on Friday, as prices rallied after data showed the US economy created the fewest jobs in more than five years in May. US two-year note yields, the maturity most sensitive to Fed rate-hike expectations, dropped to two-week lows, while benchmark 10-year note yields slid to their lowest in about two months. (Reuters)
The dollar posted its largest one-day percentage fall against a basket of major currencies since February on Friday, after a weak US jobs report. The dollar index fell 1.6% to 93.989, its lowest since 12 May. That was the biggest one-day percentage drop for the index since 3 Feb. For the week, the dollar index fell by about 1.5%. (Reuters)
USA
Wall Street shares ended lower on Friday, led down by financial shares, after a surprisingly weak jobs report prompted doubts about the US economy and its ability to sustain a near-term interest rate hike. (Reuters)
Wall Street shares ended lower on Friday, led down by financial shares, after a surprisingly weak jobs report prompted doubts about the US economy and its ability to sustain a near-term interest rate hike. (Reuters)
Final US Markit service PMI came in at 51.3 in May, a slight increase from 51.2 in April. Final US Markit composite PMI was 50.9, improving from 50.8 in April. (Markit)
New orders for US factory goods recorded their biggest increase in six months in April. New orders for manufactured goods increased 1.9%, the largest increase since October, suggesting the sector was starting to stabilize. March's orders were revised to show a 1.7% increase instead of the previously reported 1.5% gain. April's rise was in line with economists' expectations. (Reuters)
Europe
European shares fell on Friday after much weaker US jobs data than expected, while Accor soared on reported plans by a Chinese rival to raise its stake in the hotel group. Europe's auto sector led the market down as reduced expectations of an imminent US rate hike weakened the dollar and sent the euro rallying to a four-week high. A stronger euro is a disadvantage for the export-oriented sector. (Reuters)
European shares fell on Friday after much weaker US jobs data than expected, while Accor soared on reported plans by a Chinese rival to raise its stake in the hotel group. Europe's auto sector led the market down as reduced expectations of an imminent US rate hike weakened the dollar and sent the euro rallying to a four-week high. A stronger euro is a disadvantage for the export-oriented sector. (Reuters)
Asia
Japan PM pushes "equal pay" to lift economy: PM Shinzo Abe has put tackling Japan's labour inequality at the centre of his policy agenda as the number of temporary workers hits a record high. With part-time and temporary workers now making up about 40% of the labour force, Abe vows to adopt an "equal pay for equal work" scheme, forcing firms to pay the same wage for workers doing the same job. (Reuters)
Japan PM pushes "equal pay" to lift economy: PM Shinzo Abe has put tackling Japan's labour inequality at the centre of his policy agenda as the number of temporary workers hits a record high. With part-time and temporary workers now making up about 40% of the labour force, Abe vows to adopt an "equal pay for equal work" scheme, forcing firms to pay the same wage for workers doing the same job. (Reuters)
China will be in focus this week with the following data due - FX reserves on Monday, trade data Wednesday and CPI & PPI on Thursday. The China import and export numbers will be the most important. (Reuters)
Commodities
Oil prices tumbled more than 1% on Friday, extending losses after weekly industry data showed US drillers added rigs for only the second time this year. Drillers added nine oil rigs in the week to 3 Jun, Baker Hughes said. The report rekindled fears that US shale drillers would return as prices flirted with US$50 a barrel. Brent crude futures ended down 40 cents at US$49.64 per barrel. US crude futures settled down 55 cents at US$48.62. For the week, prices fell 1.1%, its first weekly decline in four weeks. (Reuters)
Oil prices tumbled more than 1% on Friday, extending losses after weekly industry data showed US drillers added rigs for only the second time this year. Drillers added nine oil rigs in the week to 3 Jun, Baker Hughes said. The report rekindled fears that US shale drillers would return as prices flirted with US$50 a barrel. Brent crude futures ended down 40 cents at US$49.64 per barrel. US crude futures settled down 55 cents at US$48.62. For the week, prices fell 1.1%, its first weekly decline in four weeks. (Reuters)
Gold surged more than 2% and was on track for its biggest one-day jump in seven weeks on Friday after weak US payrolls data boosting expectations that the Fed will stand pat on interest rates. Spot gold was up 2.5% at US$1,240.70 an ounce, while US gold futures for August delivery settled up 2.5% at US$1,242.90 an ounce. (Reuters)
Source: aws.co.th / settrade.com
