Expect the SET to trade higher today trailing Wall Street’s positive lead helped by a rebound in oil prices from four-month lows. The huge sell-off in JGBs this week on worries the BOJ has cut short of further bond buying expansion to stem the strong yen may provide support for risk assets, especially Asian equities. Locally, the government’s mega-infrastructure projects have continued to take shape with the latest being the inter-city 196KM highway worth Bt84.6bn kicking off yesterday. The Transport Ministry has vowed to launch a new mass transit line every year during 2016-20. The MPC kept rate unchanged and maintained accommodative monetary policy as expected.
Local issue
New motorway kicked off. Prime Minister Prayut Chan-o-cha on Wednesday kicked off construction on a new 196-kilometre inter-city tollway, Highway No.6, linking Ayutthaya, Saraburi and Nakhon Ratchasima provinces, worth Bt84.6bn. The new tollway is expected to be completed in 2019 with the official opening in 2020 (Bangkok Post)
New motorway kicked off. Prime Minister Prayut Chan-o-cha on Wednesday kicked off construction on a new 196-kilometre inter-city tollway, Highway No.6, linking Ayutthaya, Saraburi and Nakhon Ratchasima provinces, worth Bt84.6bn. The new tollway is expected to be completed in 2019 with the official opening in 2020 (Bangkok Post)
Ministry vows transit line expansion. The Transport Ministry has vowed to launch a new mass transit line every year during 2016-20, with ten more routes planned in Greater Bangkok. The first new Purple Line routing from Tao Pun to Bang Yai is set to launch this Saturday. The other lines include the Blue Line from Bang Sue to Tha Phra and from Hua Lamphong to Bang Khae will start running in 2018. (Bangkok Post)
Comment: The vow somewhat reassures us that the projects remain on track.
Policy rate kept unchanged. The Monetary Policy Committee (MPC) yesterday voted unanimously to leave the one-day repurchase rate at 1.5%, citing overall monetary conditions remained accommodative and conducive to the economic recovery. The rate has been kept at this level since Apr 2015. (Bangkok Post)
Comment: The decision was not a surprise and in line with the street’s prediction.
Global issues
US Treasury yields held steady on Wednesday as investors awaited a key US jobs report on Friday. US 30-year Treasuries prices were last down 2/32 in price to yield 2.289%, compared with 2.286% late Tuesday. Benchmark 10-year Treasuries prices were last down slightly to yield 1.539%, from a yield of 1.537% late Tuesday. (Reuters)
US Treasury yields held steady on Wednesday as investors awaited a key US jobs report on Friday. US 30-year Treasuries prices were last down 2/32 in price to yield 2.289%, compared with 2.286% late Tuesday. Benchmark 10-year Treasuries prices were last down slightly to yield 1.539%, from a yield of 1.537% late Tuesday. (Reuters)
The dollar gained on Wednesday, recovering from six-week lows in the previous session, as investors squared positions ahead of Friday's US non-farm payrolls report, data that should help determine the timing of the next interest rate hike. The dollar index rose 0.5% to 95.563. On Tuesday, the index hit a six-week low but was flat so far this week. (Reuters)
Economists polled by Reuters are looking for U.S. non-farm employment to have risen by 180,000 in July, while the unemployment rate is forecast to edge down to 4.8% from June's 4.9%. The official payrolls numbers are released on Friday. (Reuters)
USA
Wall Street shares rose modestly on Wednesday after a sharp rise in oil prices boosted energy shares, while better-than-anticipated data on the labor market raised the possibility of a rate hike this year and helped financial stocks. (Reuters)
Wall Street shares rose modestly on Wednesday after a sharp rise in oil prices boosted energy shares, while better-than-anticipated data on the labor market raised the possibility of a rate hike this year and helped financial stocks. (Reuters)
The US private sector added 179,000 jobs in July, beating estimates of 170,000. The report comes ahead of the more comprehensive national payrolls report on Friday. (Reuters)
Chicago Federal Reserve Bank President Charles Evans said on Wednesday that one rate hike may be appropriate this year, despite his worry that inflation is still undershooting the US central bank's 2% target. (Reuters)
Growth in the US service sector remained muted in July, with activity rising at the weakest pace in the current five-month sequence of expansion. The seasonally adjusted Markit PMI Business Activity Index registered 51.4 in July (earlier ‘flash’ estimate: 50.9), which was unchanged from the figure recorded in June and above the neutral 50.0 threshold for the fifth consecutive month. (IHS Markit)
Fastest growth of private sector output since April: The final seasonally adjusted Markit US Composite PMI Output Index posted 51.8 in July, up slightly from the unchanged from the earlier ‘flash’ figure (51.5). The final reading was above that seen in June (51.2) and signalled the fastest expansion of private sector output since April. (IHS Markit)
Europe
European shares ended little changed on Wednesday as a rebound by the region's struggling banks and a rally in carmaker Fiat Chrysler helped offset losses among companies that reported poor earnings updates. (Reuters)
European shares ended little changed on Wednesday as a rebound by the region's struggling banks and a rally in carmaker Fiat Chrysler helped offset losses among companies that reported poor earnings updates. (Reuters)
Overall earnings trend in Europe remained negative: 2Q16 earnings on the STOXX600 index are down 18% from a year ago, according to data from Thomson Reuters StarMine. (Reuters)
The Bank of England is poised to cut interest rates for the first time since 2009 later on Thursday, as Britain's economy teeters on the brink of recession after the Brexit vote. (Reuters)
Asia
Japanese cabinet reshuffle: Japanese PM Shinzo Abe appointed a conservative ally as defence minister in a cabinet reshuffle on Wednesday that left most key posts unchanged, and he promised to hasten the economy's escape from deflation and boost regional ties. Abe has retained his righthand man, Chief Cabinet Secretary Yoshihide Suga, along with Finance Minister Taro Aso and Foreign Minister Fumio Kishida. (Reuters)
Japanese cabinet reshuffle: Japanese PM Shinzo Abe appointed a conservative ally as defence minister in a cabinet reshuffle on Wednesday that left most key posts unchanged, and he promised to hasten the economy's escape from deflation and boost regional ties. Abe has retained his righthand man, Chief Cabinet Secretary Yoshihide Suga, along with Finance Minister Taro Aso and Foreign Minister Fumio Kishida. (Reuters)
China stocks edged up on Wednesday, aided by a second day of gains for property shares and growing expectations of state-owned enterprise (SOE) reforms. Reports earlier this week showed home prices still rising rapidly in most of China's larger cities. (Reuters)
PBOC: Accommodative policy reaffirmed: China will use multiple monetary policy tools and maintain ample liquidity and reasonable growth in lending and overall credit in 2H16, said the PBOC. The central bank will maintain a prudent monetary policy and fine-tune it as necessary. China also will keep the yuan basically stable and continue with market-based interest rate reform. (Reuters)
Commodities
Oil prices jumped more than 3% on Wednesday, with US crude futures returning to above US$40 a barrel, after a larger-than-expected gasoline draw offset a surprise build in crude stockpiles in the US. US crude futures settled up US$1.32 (+3.3%) at US$40.83 a barrel. Brent crude rose US$1.30 (+3.1%) to settle at US$43.10. It hit a more than three-month low of US$41.51 the previous day. (Reuters)
Oil prices jumped more than 3% on Wednesday, with US crude futures returning to above US$40 a barrel, after a larger-than-expected gasoline draw offset a surprise build in crude stockpiles in the US. US crude futures settled up US$1.32 (+3.3%) at US$40.83 a barrel. Brent crude rose US$1.30 (+3.1%) to settle at US$43.10. It hit a more than three-month low of US$41.51 the previous day. (Reuters)
The price of gold dropped on Wednesday, retreating from a three-week high set in the previous session, after a rise in the dollar on the back of strong economic data. Spot gold fell 0.4% to US$1,357.96 an ounce. (Reuters)
Source: aws.co.th / settrade.com
