Thai shares are poised to trade higher today tracking solid gains on Wall Street and global bourses after Fed Chair Janet Yellen painted a positive picture of the US economy and assured gradual withdrawals of policy accommodation but gave little sense of immediate rate hikes. The latter underpins rising global risk appetite. Local factors today are also moderately favourable. The MOF’s proposed use of Article 44 to suppress loan sharks will help grass root people and benefit nano-finance operators. Meanwhile, the government’s additional Bt5.0bn subsidy to support provincial tourism is seen as another fiscal stimulus for regional economies.
Local issue
Section 44 on loan shark. The Finance Ministry has proposed using Section 44 powers to deal with loan sharks who charge higher interest rate than the law allows, said finance permanent secretary Somchai Sujjapongse. Further, the Ministry will instruct the Revenue Department to investigate whether loan shark operators have correctly paid income tax. Such move is a part of its efforts to rescue low-income earners from underground lenders. (Bangkok Post)
Section 44 on loan shark. The Finance Ministry has proposed using Section 44 powers to deal with loan sharks who charge higher interest rate than the law allows, said finance permanent secretary Somchai Sujjapongse. Further, the Ministry will instruct the Revenue Department to investigate whether loan shark operators have correctly paid income tax. Such move is a part of its efforts to rescue low-income earners from underground lenders. (Bangkok Post)
Comment: This should be a positive vibe for nano-finance operators such as MTLS (BUY, AWS 16 TP Bt25.50) and SAWAD (BUY, AWS 16 TP Bt57.00).
Bt5bn for tourism industry reform. The government yesterday approved a proposal to allot Bt5bn from the central budget for tourism industry reform. This new budget will fund community-based tourism development during 2016-2020 as a part of the state’s plan to develop five tourism clusters, as well as to raise income of villagers. This funding request will be submitted for cabinet approval later. (Bangkok Post)
Global issues
Yellen upbeat on economy: Federal Reserve Chair Janet Yellen said on Monday that the "positive economic forces outweighed the negative" after Friday’s dismal jobs report. Yellen emphasized that one should not attach too much to any single report. She highlighted possible risks, namely slowing demand and productivity, inefficient inflation growth and global risks, such as the Brexit. She said gradual interest-rate rises were likely warranted but did not give a timetable. Yellen's remarks were probably her last public comments before a policy meeting next week on 14-15 June. (Reuters)
Comment: Markets seem to have lowered expectations on a June and July rate hike.
The dollar was little changed against a basket of currencies on Monday as Fed Chair Janet Yellen’s remarks implied warranted rate hikes but no immediate actions with concerns about Britain's referendum on its membership in the EU. The dollar index rose briefly on Yellen's rate-hike comment before turning modestly lower. It was last down 0.1% on the day at 93.925. (Reuters)
US Treasury yields rose on Monday as investors evaluated whether a weak jobs report for May would make it less likely that the Fed will raise interest rates in the coming months. Benchmark 10-year notes fell 6/32 in price to yield 1.725%, up from a two-month low of 1.697% on Friday. (Reuters)
USA
Wall Street shares finished higher on Monday with S&P500 closing at a 7-month high as Fed Chair Janet Yellen painted a mostly upbeat picture of the economy but gave little sense of when a rate hike may be coming. Energy shares also boosted the market after oil ended higher. (Reuters)
Wall Street shares finished higher on Monday with S&P500 closing at a 7-month high as Fed Chair Janet Yellen painted a mostly upbeat picture of the economy but gave little sense of when a rate hike may be coming. Energy shares also boosted the market after oil ended higher. (Reuters)
Europe
European stocks edged up on Monday, helped by gains in major mining and oil company shares following weakness in the dollar prompted by Friday's weak US jobs data, since a weaker greenback makes commodities priced in the dollar term more affordable for consumers paying with other currencies. (Reuters)
Asia
PM Shinzo Abe is preparing a new assault on deflation. After postponing a hike in the country's consumption tax, the Japanese PM is about to launch a fiscal stimulus which could be worth between ¥5.0tn and ¥10tn (US$47bn to US$93bn). This fiscal stimulus is aimed at expanding the workforce and slow the aging of Japanese society. (Reuters)
Stocks in China edged lower on Monday as investors await a flurry of data in coming weeks to assess the health of the economy. However, losses were capped by growing hopes that MSCI will include Chinese shares in its emerging market index in a decision next week, which could spark foreign buying. (Reuters)
Chinese economic data in focus: Forex reserve data could be released today, with trade on Wednesday and inflation on Thursday. Loan and money data is expected any time from June 10-15 and activity data (investment, industrial output and retail sales) on June 12. (Reuters)
Commodities
Oil prices rose on Monday as attacks on Nigeria's oil industry and fresh draws in US crude stockpiles boosted prices even though gains were pared later on renewed expectations of a US interest rate hike. Brent crude futures were up 68 cents (+1.3%) at US$50.32 a barrel. Earlier in the session, it hit US$50.83, its highest since November. US crude futures rose 80 cents (+1.6%) to US$49.42, after an intraday high at US$49.90. (Reuters)
Oil prices rose on Monday as attacks on Nigeria's oil industry and fresh draws in US crude stockpiles boosted prices even though gains were pared later on renewed expectations of a US interest rate hike. Brent crude futures were up 68 cents (+1.3%) at US$50.32 a barrel. Earlier in the session, it hit US$50.83, its highest since November. US crude futures rose 80 cents (+1.6%) to US$49.42, after an intraday high at US$49.90. (Reuters)
Gold edged up to a two-week high and then retraced some gains on Friday, holding steady after Fed Chair Janet Yellen said she still expected gradual US rate increases. Spot gold was up 0.02% at US$1,244.31 an ounce, after rising to its highest since May 24 at US$1,248.40 an ounce. US gold futures for August delivery settled up 0.4% at US$1,247.40 an ounce. (Reuters)
Source: aws.co.th / settrade.com
