Thai shares look set to trade in a narrow ranged today, tracking modest performances in most global bourses after strong rallies for several days this week. The main focus moves to major central banks’ actions, starting with the likely rate cut and more QE from the BOE later today and more stimulus from the ECB later in the month to shield against the negative impact of the Brexit. Expectations are also increasing for Beijing and Tokyo to come up with both monetary and fiscal measures to boost their economies after downbeat economic data. Locally, Moody’s lowered its assessment of Thailand’s economic strength to a still high score but kept other ratings unchanged so it is only slightly negative.
Local issue
Moody’s concerns over Thai economy. Moody’s Investors Service has lowered its assessment of Thailand’s economic strength to “high (-)”, from prior “high”, saying below-trend growth over the last two years indicates that the country is facing emerging competitiveness issues that weigh on the long-term outlook for GDP growth and also signals heightened political risks. Moody's estimates Thailand would achieve GDP growth of 2.8% in 2016 and 3.0% in 2017. However, Thailand’s sovereign credit rating of Baa1 and stable outlook are both kept unchanged, demonstrating strong fiscal position and low external vulnerability, as well as favorable funding conditions. (Moody’s/Bangkok Post)
Moody’s concerns over Thai economy. Moody’s Investors Service has lowered its assessment of Thailand’s economic strength to “high (-)”, from prior “high”, saying below-trend growth over the last two years indicates that the country is facing emerging competitiveness issues that weigh on the long-term outlook for GDP growth and also signals heightened political risks. Moody's estimates Thailand would achieve GDP growth of 2.8% in 2016 and 3.0% in 2017. However, Thailand’s sovereign credit rating of Baa1 and stable outlook are both kept unchanged, demonstrating strong fiscal position and low external vulnerability, as well as favorable funding conditions. (Moody’s/Bangkok Post)
Headway on EEC. According to the Industry Ministry permanent secretary, the committee is gearing up to conclude Eastern Economic Corridor (EEC) draft by next week and it will be submitted for cabinet approval next month. The Ministry also estimated the EEC would attract up to Bt550bn in investment to the eastern region over the next five years following its launch this year. (Bangkok Post)
Global issues
US Treasury prices gained on Wednesday after a two-day selloff raised yields enough to lure buyers, and also helped the US government sell long-dated debt to strong demand. Benchmark 10-year notes ended up 14/32 in price to yield 1.468%, down from 1.513% on Tuesday. (Reuters)
The US dollar fell on Wednesday as risk appetite receded after big moves earlier in the week. The dollar fell 0.3% against the yen to ¥104.39. It hit a session low overnight of ¥103.95. (Reuters)
USA
Wall Street shares edged up on Wednesday, with the DJIA and S&P500 setting record highs, as investors expected less contraction in 2Q16 earnings from the trough in 1Q16 and upbeat earnings for the rest of the year. Focus has turned to Thursday's meeting at the BOE, widely expecting more stimulus to shield the economy from the fallout of the Brexit. (Reuters)
Wall Street shares edged up on Wednesday, with the DJIA and S&P500 setting record highs, as investors expected less contraction in 2Q16 earnings from the trough in 1Q16 and upbeat earnings for the rest of the year. Focus has turned to Thursday's meeting at the BOE, widely expecting more stimulus to shield the economy from the fallout of the Brexit. (Reuters)
US economy shows few signs of sustained inflation pressure, according to Fed’s latest Beige Book. Economic activity increased at a modest pace in most regions from mid-May through the end of June. Consumer spending was generally positive with some signs of softening. Employment continued to grow modestly. Several districts reported strong demand for skilled labor. Overall loan demand increased, while consumer lending unchanged. (CNBC, Reuters)
Europe
European stocks edged lower on Wednesday after four straight sessions of gains to leave a benchmark regional index near its highest level in more than two weeks, with a drop in oil and gas shares weighing on the market. (Reuters)
European stocks edged lower on Wednesday after four straight sessions of gains to leave a benchmark regional index near its highest level in more than two weeks, with a drop in oil and gas shares weighing on the market. (Reuters)
Asia
China's exports fell more than expected in June as global demand remained weak and as the Brexit clouds the outlook for one of Beijing's biggest markets. Imports also shrank more than forecast. Exports fell 4.8% YoY in June and were down 7.7% YoY in 1H16. Imports dropped 8.4% YoY. That resulted in a trade surplus of US$48.11bn in June, against forecast of US$46.64bn and May's US$49.98bn. Economists had expected June exports to fall 4.1%, matching May's decline, and expected imports to fall 5%, following May's 0.4% dip. (Reuters)
Japan: “no helicopter money”: Chief Cabinet Secretary Yoshihide Suga said Japan was not considering "helicopter money," a policy in which the central bank finances government spending to stimulate the economy. (Reuters)
Japan's government on Wednesday cut its forecasts for consumer prices and economic growth, a blow to the BOJ’s efforts to achieve 2% inflation with its QQE scheme. The government expects the CPI to rise 0.4% in the current fiscal year ending in March 2017, down from a 1.2% increase projected in January. It also forecast the CPI to rise 1.4% for fiscal 2017, well below the 2% target. The downgrade reflects weak economic growth, slumping oil prices and a strong yen. Markets are expecting the BOJ will cut its inflation forecasts and expand its already massive stimulus QQE scheme at a July 28-29 rate review. (Reuters)
Japanese Emperor Akihito intends to step down in coming years, public broadcaster NHK said on Wednesday. The 82-year-old monarch, who has had health problems in recent years, expressed his intention to the Imperial Household Agency. His heir is Crown Prince Naruhito, aged 56. (Reuters)
Commodities
Oil markets tumbled more than 4% on Wednesday, erasing most of the previous session's gain, as a raft of bearish US inventory data heightened concerns about a global glut. The US EIA said crude inventories fell 2.5mn barrels last week, less than a 3mn-barrel drop forecast in a Reuters poll. Brent crude settled down US$2.21 (-4.6%) at US$46.26 a barrel. US crude fell US$2.05 (-4.4%) to close at US$44.75. (Reuters)
Gold rose 1% on Wednesday, recovering from its lowest level in nearly two weeks, as prospects for further economic stimulus helped to bolster investor appetite while the dollar remained flat. Spot gold was up 0.8% at US$1,342.41 an ounce. (Reuters)
Copper surged through US$5,000 a tonne on Wednesday to its highest since late April as its imports to top consumer China remained solid in June and as investors bet Beijing will stimulate its economy further. LME copper jumped as high as US$5,032 a tonne, its strongest since 29 Apr, before ending at US$4,938 (+1.4%). (Reuters)
Source: aws.co.th / settrade.com
