Expect the SET to rise strongly today bolstered by positive factors both overseas and in the local market. Globally, a robust July US jobs report has lifted confidence in the strength of the US economy despite boosting the chance of a Fed rate hike this year. On the local front, Thai voters approved a junta-backed constitution in a referendum on Sunday which paves the way for an election next year. Although uncertainty over parliamentary politics seems to decline as a result, which investors like, it remains to be seen whether out-of-parliament politics will from now on calm down or not. The MOF’s confidence that 2Q16 GDP growth should be more than 1Q16’s 3.2% has confirmed the BOT’s earlier comments and is very encouraging.
Local issue
Yes votes taking lead on charter referendum. The unofficial result from the Election Commission (EC) with 94% of the votes counted posted that 61.4% of the votes supported the draft while 38.6% of the votes opposed it. Meanwhile, on the extra question asking whether voters should allow the Senate to join the House of Representatives in choosing the prime minister, 58.1% voted for it, compared to 41.9% who rejected it. (Bangkok Post)
Yes votes taking lead on charter referendum. The unofficial result from the Election Commission (EC) with 94% of the votes counted posted that 61.4% of the votes supported the draft while 38.6% of the votes opposed it. Meanwhile, on the extra question asking whether voters should allow the Senate to join the House of Representatives in choosing the prime minister, 58.1% voted for it, compared to 41.9% who rejected it. (Bangkok Post)
Comment: The results were in line with the polls carried out before the referendum. The counting will resume this morning.
Finance Ministry upbeats Q2 GDP. Finance Minister Apisak Tantivorawong believe Thailand’s 2Q16 GDP would expand higher than the first quarter's growth rate of 3.2%, with an estimated growth of 3.4% driven by ramped-up state spending and stimulus measures. (Bangkok Post)
Comment: This is in line with the Bank of Thailand’s recent view expecting 2Q16 economic growth to surpass 1Q16. Note that NESDB is due to announce the country’s April-June economic reading on 15 Aug.
Tax incentives considered for border. The Finance Ministry is considering to provide tax incentives to traders and operators who put consumer goods and machinery sought by neighboring countries up for sale in border towns, which would be subject to lower income tax, value-added tax and customs duty. Thai individuals are allowed to buy products to be sold in border towns with a cap of 20,000 per month per person to prevent non-border towns from being affected. Preliminarily, the border locations in the plan would be established in provinces that have special economic zones (SEZs). (Bangkok Post)
Rayong rail project on fast track. The Transport Ministry has put the 193-km Bangkok-Rayong high-speed rail project on the fast track for consideration by public-private partnership (PPP) committee this month. The project is worth Bt153bn and is set to boost development of the Eastern Economic Corridor (EEC). After consideration, the bid is expected to take place next year. (Bangkok Post)
Global issues
US Treasury yields jumped on Friday, with yields on bonds maturing in 10 years and less set to post their biggest daily rise since mid-May, after a stronger-than-expected July employment report boosted expectations for another Federal Reserve interest rate hike this year. US 10-yield hit more than one-week highs of 1.589% while yields on shorter-dated maturities hit their highest levels in a week. US 5-year note yields were last up nearly 11 basis points, marking the biggest rise. (Reuters)
The dollar rallied across the board on Friday after data showed US employment increased more than expected in July and wages picked up. The dollar index rose 0.5% to 96.212, recovering from last week's poor showing when it fell 2% for its worst weekly performance since April. (Reuters)
USA
Wall Street shares recorded their best day in a month on Friday, with the S&P500 and Nasdaq closing at record highs after a second straight month of robust US non-farm payrolls report for July boosted optimism that economic growth is accelerating. (Reuters)
Wall Street shares recorded their best day in a month on Friday, with the S&P500 and Nasdaq closing at record highs after a second straight month of robust US non-farm payrolls report for July boosted optimism that economic growth is accelerating. (Reuters)
US nonfarm payrolls rose by 255,000 in July, far outpacing a forecast for a gain of 180,000 by economists. The June employment number was also revised to 292,000 from 287,000. While the unemployment rate remained unchanged at 4.9%, it held below the 5% mark associated with full employment. (Reuters)
The probability of a hike doubled to 18% for September after the jobs report and rose to about 46% for December, according to CME Group's FedWatch tool. (Reuters)
Atlanta Fed upgrades US 3Q16 forecast to 3.8% on Friday in the wake of the latest data on payrolls and the trade balance. The latest 3Q16 GDP estimate was slightly faster than the 3.7% figure calculated on Thursday. (Reuters)
Europe
European shares rose on Friday, helped by better-than-expected US jobs data and solid earnings from companies including cement making group LafargeHolcim, but Royal Bank of Scotland slumped after weak results. (Reuters)
European shares rose on Friday, helped by better-than-expected US jobs data and solid earnings from companies including cement making group LafargeHolcim, but Royal Bank of Scotland slumped after weak results. (Reuters)
Asia
Japan's current account surplus stood at ¥974.4bn (US$9.55bn) in June due to an expansion in the trade surplus. The current account surplus was smaller than economists' median forecast for a surplus of ¥1.06tn in a Reuters poll. (Reuters)
Japan issued a new protest to Beijing on Saturday after Chinese coastguard ships and about 230 fishing vessels sailed close to what Tokyo considers its territorial waters around disputed islets in the East China Sea, Japan's foreign ministry said. (Reuters)
China's regional economies showed a marked divergence in performance in 1H16, with provinces reliant on steel making and mining reporting weak or no growth but some larger cities thriving. The northeastern steel-making province of Liaoning reported its economy shrank by 1% YoY in 1H16, the only province in China to report a contraction. Meanwhile, the southwestern metropolis of Chongqing reported growth of 10.6%, the best in the country. The nationwide growth was 6.7% in 1H16. (Reuters)
Commodities
Crude oil prices ended little changed on Friday as short-covering returned in late trading, after some weakness earlier in the session as the US dollar rose on robust US jobs data. US oil rig count went up for 6th straight week, according to Baker Hughes. Brent crude's front-month settled down just 2 cents at US$44.27 per barrel. The September front-month contract in WTI crude, settled down 13 cents (-0.3%) at US$41.80 per barrel, after falling nearly 2% earlier. (Reuters)
Gold fell as much as 1.7% on Friday, as the dollar rose after US data showed employment increased more than expected in July, raising the probability of an interest rate hike from the Fed this year. Spot gold fell to a one-week low of US$1,336.46 an ounce and was settled down 1.7% at US$1,338.25. It was on track for its weakest session since July 12 and set to finish the week down 0.9%. (Reuters)
Source: aws.co.th / settrade.com
