Expect the SET to trade higher today in line with sharp gains on most global bourses as jitters over Brexit in the short term eased with rising expectations of more monetary stimulus from several central banks to guard against adverse economic impacts in the longer term resulting from Brexit fallout. Most local or local-related factors today are positive especially the US State Department’s decision to upgrade Thailand from its worst list of human trafficking status which would help Thailand’s multibillion-dollar fishery industry.
Local issue
US to upgrade Thailand’s human trafficking status: The US has decided to remove Thailand from its list of worst human trafficking offenders in the US State Department's annual Trafficking in Persons (TIP) report, which is due to be released today. The action would put Thailand on a so-called "Tier 2 Watch List" and remove it from the rating for countries with the worst human-trafficking records, known as Tier 3. (The Nation)
US to upgrade Thailand’s human trafficking status: The US has decided to remove Thailand from its list of worst human trafficking offenders in the US State Department's annual Trafficking in Persons (TIP) report, which is due to be released today. The action would put Thailand on a so-called "Tier 2 Watch List" and remove it from the rating for countries with the worst human-trafficking records, known as Tier 3. (The Nation)
Comment: The move will help improve the Kingdom's international reputation, smooth relations between the two countries and help Thailand’s vital multibillion-dollar seafood industry, which is under close scrutiny by the EU for IUU Fishing allegations.
State moves on cable eyesore. The government authorities are finally embarking on a Bt51.7bn program to put 127 kilometers of overhead power lines and telecom & broadcasting cables into a single platform below ground on 39 roads in Bangkok, Samut Prakan and Nonthaburi, scheduled to be completed in 2020. The Metropolitan Electricity Authority (MEA) yesterday signed a memorandum of understanding for the project development with TOT Plc, the National Broadcasting and Telecommunications Commission (NBTC), the Bangkok Metropolitan Administration (BMA) and the Royal Thai Police. (Bangkok Post)
FPO optimistic on YoY growth in 2Q16. According to the director of the FPO’s macroeconomic policy bureau, GDP growth is expected to improve YoY, but QoQ growth still has to be evaluated further. The positive factors would be from accelerated fiscal disbursement by the government and tourism industry, offsetting the shrinkage in exports. FPO estimates the country’s economy to expand 3.3% this year. (Bangkok Post)
EDC system set to roll out in September. Private merchants registered with the Commerce Ministry’s Business Development Department will be required to install at least one electronic data capture (EDC) machine from September, in order to promote the national e-payment scheme. The first phase of EDC expansion will encourage firms, state agencies, and individuals registered with the VAT system to install the card payment machines while the second phase aims to help individuals who run businesses outside the VAT system to install machines. (Bangkok Post)
Global issues
Turkey on Wednesday said the Islamic State was behind a triple suicide bombing and gun attack that killed 42 people and 239 wounded at Istanbul's main airport on Tuesday. Turkey is part of a US-led military coalition against the Islamic State and home to around 3mn refugees from the five-year civil war in neighboring Syria. (Reuters)
Turkey on Wednesday said the Islamic State was behind a triple suicide bombing and gun attack that killed 42 people and 239 wounded at Istanbul's main airport on Tuesday. Turkey is part of a US-led military coalition against the Islamic State and home to around 3mn refugees from the five-year civil war in neighboring Syria. (Reuters)
US Treasury debt prices fell on Wednesday, with the 30-year yield flirting with all-time lows, as investors reduced bond holdings on a further rebound in stocks and commodities following a rout triggered by Brexit. Benchmark 10-year Treasuries were down 12/32 in price with a yield of 1.495%, up 3 basis points. (Reuters)
The US dollar slipped against the euro and sterling for a second straight day on Wednesday on potential profit-taking and a rebound in risk appetite stemming from reduced concerns surrounding Brexit. Sterling, which suffered its biggest one-day fall in modern history on Friday, was last up 0.7% against the greenback at US$1.3434. (Reuters)
USA
Wall Street shares recorded big gains for a second day on Wednesday as investors continued to scour for bargains resulting from the Brexit vote last week. Adding to the positive sentiment, US consumer spending rose for a second straight month in May. The S&P500 has recouped more than half of its losses from the two-day equities rout. Again, financial shares, which was beaten up the most in the wake of the vote, led all sectors upward. Energy shares surged, supported by higher oil prices. (Reuters)
US consumer spending rose for a second straight month in May on increased demand for automobiles and other goods. Consumer spending, which accounts for more than 2/3 of US economic activity, increased 0.4% last month, pointing to an acceleration in economic growth in 2Q16. Consumer spending in April was revised up to show it advancing 1.1% from the previously reported 1.0% jump. Last month's increase in consumer spending was in line with economists' expectations. (Reuters)Wall Street shares recorded big gains for a second day on Wednesday as investors continued to scour for bargains resulting from the Brexit vote last week. Adding to the positive sentiment, US consumer spending rose for a second straight month in May. The S&P500 has recouped more than half of its losses from the two-day equities rout. Again, financial shares, which was beaten up the most in the wake of the vote, led all sectors upward. Energy shares surged, supported by higher oil prices. (Reuters)
The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.2% in May after a similar gain in April. In the 12 months through May the core PCE increased 1.6% after rising by the same margin in April. The core PCE is the Fed's preferred inflation measure and is running below the US central bank's 2% target. (Reuters)
Europe
European shares rose on Wednesday, as jitters over Brexit eased, with higher oil prices and the chance of more monetary stimulus also helping markets. Equities were further supported by a drop in sovereign bond yields, with France's borrowing costs dropping to a record low amid expectations of further monetary stimulus to offset the negative impact of the Brexit vote. (Reuters)
European bond yields edged higher from near or below zero on Wednesday, as expectations grow that central banks will act to shore up confidence and the economy after Britain's Brexit vote. ECB President Mario Draghi said on Tuesday that the Brexit could reduce euro zone growth by a cumulative 0.3% to 0.5% compared to previous estimates over the next three years. (Reuters)
Asia
Japanese PM Shinzo Abe on Wednesday pledged to use all available policy tools to keep the wheels of the economy turning as financial markets were gripped by uncertainty in the wake of the Brexit. (Reuters)
Japanese PM Shinzo Abe on Wednesday pledged to use all available policy tools to keep the wheels of the economy turning as financial markets were gripped by uncertainty in the wake of the Brexit. (Reuters)
Japan's industrial output fell 2.3% in May in a sign companies could be worried that export demand is weakening. The fall was more than a median estimate for a 0.1% decrease forecast by economists. Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to rise 1.7% in June and increase 1.3% in July. (Reuters)
China rejects South China Sea ruling. An international court said on Wednesday it would deliver a hotly anticipated ruling in the Philippines' case against China over the South China Sea on 12 Jul, drawing an immediate rebuke from Beijing, which rejects the tribunal's jurisdiction. The US, which is a close ally of the Philippines and is concerned about China's expansive South China Sea claims, reiterated its backing for The Hague-based Permanent Court of Arbitration and urged a peaceful resolution of the dispute. (Reuters)
China defends FX policies after Trump’s attack: China's Foreign Ministry on Wednesday said the yuan's exchange rate was not the reason for unbalanced trade ties with the US, after Republican presidential candidate Donald Trump said he would label Beijing a currency manipulator. (Reuters)
Commodities
Oil prices surged 4% on Wednesday after a larger-than-expected drawdown in US crude inventories. The US EIA reported that crude stockpiles fell 4.1mn barrels last week, the sixth consecutive week of drawdowns, which was more than the 2.4mn barrels expected by analysts. Fading concerns over the Brexit, potential for an oil workers' strike in Norway and a crisis in Venezuela's energy sector were also supporting the rally. Brent crude futures settled up US$2.03 (+4.2%) at US$50.61 per barrel. US crude futures closed up US$2.03 (+4.2%) at US$49.88. (Reuters)
Oil prices surged 4% on Wednesday after a larger-than-expected drawdown in US crude inventories. The US EIA reported that crude stockpiles fell 4.1mn barrels last week, the sixth consecutive week of drawdowns, which was more than the 2.4mn barrels expected by analysts. Fading concerns over the Brexit, potential for an oil workers' strike in Norway and a crisis in Venezuela's energy sector were also supporting the rally. Brent crude futures settled up US$2.03 (+4.2%) at US$50.61 per barrel. US crude futures closed up US$2.03 (+4.2%) at US$49.88. (Reuters)
Gold rose on Wednesday as the dollar retreated although appetite for safe assets declined. Spot gold was up 1% at US$1,324.90 an ounce. US gold settled up 0.7% at US$1,326.90. (Reuters)
Source: aws.co.th / settrade.com
