All eyes on US Jobs data for clues to Fed direction

All eyes on US Jobs data for clues to Fed direction

Recap: US equity futures rose yesterday while European markets were mixed as investors monitored key euro zone economic indicators and awaited a US jobs report that could determine when the Federal Reserve will begin withdrawing its economic stimulus.

Most Asia-Pacific stocks edged higher while Chinese stocks declined on concerns over slowing growth. In Tokyo, the Nikkei soared to a three-decade high after embattled Prime Minister Yoshihide Suga said he would step down at the end of the month.

The SET index moved in a range of 1,621.42 and 1,657.79 points this week before closing yesterday at 1,650.33, up 2.4% from the previous week, in daily turnover averaging 106.62 billion baht.

Foreign investors were net buyers of 9.87 billion baht and brokerage firms bought 1.12 billion baht worth of shares. Retail investors were net sellers of 10.52 billion and institutional investors offloaded 474.68 million baht worth of shares.

Newsmakers: US economic growth in the third quarter is expected to ease to 2.9% from 6.5% year-on-year in the second quarter, say Morgan Stanley economists, as stimulus spending and a reopening-fuelled burst of activity cools.

  • The number of Americans filing new claims for jobless benefits fell last week, while layoffs dropped to their lowest in 24 years in August, suggesting the labour market was charging ahead even as new Covid infections surge.
  • US President Joe Biden's administration on Tuesday announced plans to open more than 80 million acres in the Gulf of Mexico for oil and gas exploration after a court ruled against the administration's pause in leasing.
  • Japanese Prime Minister Yoshihide Suga is stepping down after less than a year on the job. Mr Suga told members of the ruling Liberal Democratic Party he wouldn't take part in its leadership election later this month.
  • Chinese President Xi Jinping has announced plans to set up a new stock exchange in Beijing and more digital trade pilot zones under plans to expand the country's role as a global services hub.
  • China plans to propose new rules that would ban companies with large amounts of sensitive consumer data from going public in the US, sources say.
  • Beijing has begun a two-month campaign to crack down on commercial platforms and social media accounts that post finance-related information deemed "harmful" to China's economy.
  • The regional super-app Grab is launching an online supermarket in the Philippines as it tries to move beyond meal deliveries and ride-hailing to boost revenue.
  • Top Japanese aviation companies ANA and Japan Airlines are planning to launch commercial drone services to deliver medical supplies and daily necessities to people living in remote areas of Japan.
  • Singapore has joined the growing list of countries cracking down on Binance. The world's largest crypto exchange has been providing payment services to Singapore residents without an appropriate licence, the Monetary Authority of Singapore said on Thursday.
  • China's Sinopec Corp plans to spend 30 billion yuan (US$4.6 billion) on hydrogen energy by 2025 as part of its drive to become a carbon-neutral energy provider by 2050.
  • Forrest Li, the billionaire co-founder of Sea Ltd, the parent of Shopee and the gaming portal Garena, has become Singapore's richest person with a net worth of nearly US$20 billion, as shares of his company surged.
  • Southeast Asia, led by Indonesia, has added 70 million new online shoppers since the start of the pandemic, according to an annual report by Facebook and Bain & Co.
  • Hong Kong's government is facing growing pressure from businesses to open borders or risk losing talent and investment. But Chief Executive Carrie Lam has defended the three-week hotel quarantine, saying restrictions are needed to open up to the Chinese mainland.
  • Gold prices eked out small gains this week, buoyed by a weaker dollar to move above $1,810 an ounce, as investors awaited US jobs data to gauge how that might affect Fed plans to scale back stimulus.
  • The Thai economy in July was increasingly affected by Covid outbreak and related restrictions, but fiscal policy and exports lent some support, the Bank of Thailand said on Tuesday.
  • The public debt ceiling of 60% of GDP could be raised if deemed necessary, says the head of a government committee that's drawing up a 5-year debt management plan. Debt to GDP stood at 55.6% in July, up from 55.2% in the June, and is forecast to reach 58% by the end of fiscal 2021 on Sept 30.
  • Private investment declined in July as a result of the prolonged pandemic, but exports expanded for the fifth consecutive month, the Fiscal Policy Office said.
  • The manufacturing production index (MPI) in July increased by 5.12% year-on-year for the fifth consecutive month to 91.41 points, thanks to export growth.
  • The Federation of Thai Industries is working with government and academia on bio-, circular and green (BCG) economic development projects in five industries to help push Thai GDP to 4.4 trillion baht in six years.
  • The Bank of Thailand and the Thai Bankers' Association said on Friday they would offer more support measures for debtors affected by the coronavirus pandemic.
  • The Bank of Thailand has introduced a new debt consultation programme, Debt Doctor, to offer complete financial advice to pandemic-hit borrowers.
  • The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) on Wednesday raised its 2021 economic forecast to between a 0.5% decline and 1% growth, from an earlier range of minus 1.5% and zero.
  • The Revenue Department expects around 100 foreign e-service providers to register to pay value-added tax (VAT) in Thailand under a new law that took effect on Sept 1. So far, 69 foreign e-service operators have registered, including 20 giant online platform operators.
  • Shares of Siam Makro Plc surged 24% after the country's biggest operator of cash-and-carry stores announced a plan worth 218 billion to take control of the retailer Lotus from other affiliates of the Charoen Pokphand Group.
  • Tourism and Sports Minister Phiphat Ratchakitprakarn has defended the country's reopening plan, saying Bangkok and four other provinces -- Chon Buri (Pattaya), Phetchaburi, Prachuap Khiri Khan (Hua Hin) and Chiang Mai -- should be ready for vaccinated international visitors from October.
  • Pattaya hopes to introduce quarantine-free travel for foreign visitors on sealed routes to increase its appeal. Hua Hin is also looking to reopen on Oct 1 with a quarantine-free approach similar to the Phuket sandbox.
  • The Phu Nam Rom border crossing in Kanchanaburi reopened on Wednesday for transport of goods between Thailand and Myanmar. The government is in talks with neighbouring countries to reopen as many checkpoints as possible to boost cross-border trade, which has been healthy despite the pandemic.
  • Thailand should open up to Indian tourists after Covid infections on the subcontinent improved significantly, as pent-up demand is starting to flood into other countries, says the Tourism Authority of Thailand.
  • Rice exporters are growing concerned about the prospects for Thai hom mali rice because of expensive freight rates and higher supplies. A global container shortage has tripled freight rates to the US since before the pandemic.

Coming up: Britain will release August construction activity on Monday. The Reserve Bank of Australia will announce its interest rate decision on Tuesday and Germany will release September economic sentiment. Also due the same day are revised euro zone second-quarter GDP and Chinese trade data for August.

  • Japan will release second-quarter GDP on Wednesday. The US will release July job openings and the Bank of Canada will announce its interest rate decision.
  • The European Central Bank will announce its latest policy decisions on Thursday. Britain will release July manufacturing and industrial production and trade figures on Friday. Canada will release August employment data.

Stocks to watch: UOB Kay Hian Securities recommends communication stocks and REITs as defensive plays amid growing market concern about weak second-half earnings. It recommends gradually accumulating communication stocks such as ADVANC, DTAC, FTREIT and WHART, utility stocks such as GULF, GPSC, EGCO, RATCH, EASTW, WHAUP and TTW, and food and agriculture stocks such as TVO, TU, CPF, GFPT and TWPC. It also recommends speculation on shipping stocks such as PSL, TTA and RCL, and packaging groups such as SCGP and BGC.

Yuanta Securities recommends stocks of firms that have raised their forecasts or had target prices adjusted after second-quarter earnings announcements, but are still cheap, such as SCC, SYNEX and SC. Stocks expected to benefit from the easing of lockdowns with relatively low prices include AMATA, BAM and WHA.

Technical view: Capital Nomura Securities sees support at 1,621 points and resistance at 1,660. Thanachart Securities sees support at 1,632 and resistance at 1,668.

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