KBank Daily Update 7 December 2017

Transcription

1 KBank Daily Update 7 December 2017 Market highlight: The dollar will likely trade in a tight range ahead of the release of the non-farm payroll numbers this Friday. Economists expect non-farm payrolls to have risen by 200,000 in November. FX market mover: EUR/USD dropped by 0.25% to The euro dropped yesterday due to positive dollar sentiment this week. The US ADP employment supported dollar the dollar s strength. USD/THB barely inched with a 0.01% rise to 32.62%. The baht moved within a narrow range. Factors to watch today: Thai consumer confidence and Eurozone 3Q17 GDP (final estimate) Thai Stock Market 6-Dec Change US Market 6-Dec Change SET Index 1, Dow Jones 2, Market Turnover (Bt mn) 6, , S&P 500 2, Foreign Net Position (Bt mn) -3, , Dollar Index Thai Bond Market 6-Dec Change US 10 yr T-note (%) Total Return Index US 2yr T-note (%) Total Market Turnover (Bt mn) 1,7, , NYMEX crude ($/b) TGB Yield Curve 1m 3m 6m 1yr 2yr 3yr 5yr 7yr 10yr 12yr 1yr 18yr 6-Dec Change (bps) Interbank Rates 7-Dec 6-Dec BIBOR 1w 1m 2m 3m 6m 1yr Overnight (%) Dec Repurchase Rates 1-day 7-day 1-day 1m Spot Gold ($ /oz) change 6-Dec Dec THBFIX (pm) 1m 3m 6m 1yr LIBOR 1m 3m 6m 6-Dec Dec SWAP (THB/THB, Rates) 1yr 2yr 3yr yr 5yr 7yr 10yr 7-Dec Bid/Ask 1.25/ / / / / / /2.355 KBank counter rate Sight Bill Buying Selling Premium (1 month) (against THB) T/T T/T Export/Import USD / 2.8 EUR / 10. GBP / 6.3 JPY / KBank Technical Analysis 7-Dec 6-Dec Support Resistance Trend USD/THB (Onshore) USD/JPY EUR/USD EUR/THB JPY/THB Source: Reuters (ex counter rates); For latest counter rates: Disclaimer: For private circulation only. The foregoing is for informational purposes only and not to be considered as an offer to buy or sell, or a solicitation of an offer to buy or sell any security. Although the information herein was obtained from sources we believe to be reliable, we do not guarantee its accuracy nor do we assume responsibility for any error or mistake contained herein. Further information on the securities referred to herein may be obtained upon request.

2 Macro & Fixed Income Market US ADP employment Jan-1 Aug-1 Mar-15 Oct-15 May-16 Dec-16 Jul-17 ADP Employment Change (,000) -month moving average Daily performance Macro update: US ADP employment rose in line with the market s estimate. In the month of November, private payrolls rose by 190,000, following a 235,000 rise in October. This number matched the market s estimate. Specifically, factories added 0,000 jobs, the highest in almost 15 years. However, construction payrolls dropped by,000. As such, employment in the good producing sector rose by 36,000. Additionally, service payrolls rose by 155,000, following a 150,000 rise in October. Payrolls rose the most in the education and health services sector, as employment increased by 5,000. This was followed by the 7,000 payroll gains in the professional and business services sector. These latest numbers suggest that the US labor market remained resilient after the hurricanes. Overall, the US labor market continues to remain strong. The next numbers that will be closely watched will be the non-farm payroll numbers. Economists expect non-farm payrolls to have risen by 200,000 in November. Fixed income market: Thai government bond yields stayed unchanged. The 2-yr and 10-yr yield remained unchanged for 3 working days at 1.9% and 2.56%, respectively. US treasury yields declined. The 10-yr and 2-yr treasury yields dropped by 1 bps to 2.3% and 1.81%, respectively.

3 Bond Market Indicators Thai government bond yields % Jan-13 Sep-13 May-1 Jan-15 Sep-15 May-16 Jan-17 Sep-17 Thai government bond yields spreads bps Jan-13 Sep-13 May-1 Jan-15 Sep-15 May-16 Jan-17 Sep policy rate 2y 5y 10y US government bond yields spread 2-5 spread 5-10 spread 10-yr UST vs. S&P 500 % Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep Jan-1 Jul-1 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul yr Treasury yield, % 2yr Treasury yield, % (right axis) S&P Index 10yr Treasury yield, right

4 FX Market Current trend: The market is waiting for clearer progress on the US tax reform front, which is expected to support the dollar as the recent quantitative tightening program has not yet strengthened the dollar. Otherwise, the other currencies are expected to fluctuate within the narrow range and remained on an appreciation stance against the dollar. On the Thai monetary policy front, the BOT is expected to stay on pat as domestic demand remains weak. As for the USD/THB, the high current account surplus will likely slowdown the rise in the USD/THB. EUR/USD dropped by 0.25% to The euro dropped yesterday due to positive dollar sentiment this week. The US ADP employment supported dollar the dollar s strength. USD/JPY dropped by 0.28% to The yen appreciated against the dollar. GBP/USD declined by 0.36% to due to Brexit concerns. The UK only has 2 hours left to come up with a deal regarding the Irish border; this deal needs to be finalised by Friday. During this time, the UK government needs to find a mutual solution with the DUP party in order to avoid a hard border within Ireland. Otherwise, Brexit negotiations might not be able to move forward. Asian currencies depreciated against the dollar. The dollar index improved by 0.20% to close at yesterday. Based on ADP Research Institute numbers, US private sector employment normalized, with job gains of 190,000 in the month of November. This suggests that there was further strengthening in the US labor market. As a result, investors expect a continued drop in the unemployment rate this Friday. USD/CNY was unchanged. The exchange rate dropped somewhat by 0.01% to USD/THB barely inched with a 0.01% rise to 32.62%. The baht moved within a narrow range.

5 Currency Movement Morning Closing rates Daily Consensus forecast Spot 6-Dec-17 5-Dec-17 % Change Q2017 1Q2018 USD/THB** USD/JPY EUR/USD GBP/USD USD/CNY USD/SGD USD/IDR 13,59 13,50 13, ,500 13,520 USD/MYR USD/PHP USD/KRW 1,096 1,09 1, ,120 1,111 USD/TWD AUD/USD USD/CHF JPY/THB EUR/THB GBP/THB CNY/THB Source:Bloomberg and KBank** Market Strategists: Peerapan Suwannarat Tel: peerapan.s@kasikornbank.com Anchali Singh Tel: anchali.s@kasikornbank.com

6 KBank THB NEER index May-1 Sep-1 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan KBank NEER,base = Jan 1995, left Latest data point, left BOT NEER, base = 2012, right As of 6 th December, 2017

7 LB17OA LB183A LB183B LB191A LB193A LB196A LB198A LB206A LB213A LB21A LB21DA LB226A LB22NA LB233A LB236A LB2A LB2DA LB25DA LB267A LB26DA LB27DA LB283A LB296A LB316A LB326A LB366A LB383A LB396A LB06A LB16A LB6A LB66A KBank Rich / Cheap Model bps (actual YTM vs model) 3 mth avg Now As of 7 th November, 2017

8 Fixed Income Auctions for December 2017 Unit: million baht Monday Tuesday Wednesday Thursday Friday Total 1 CB17D19A : 20,000 TB18307A : 10,000 30,000 CB18308B : 30,000 CB18607B : 30,000 CB18D06A : 55, LB316A : 12, TB1831B : 10,000 BOT202A : 15, , CB18315C : 30,000 CB1861A : 30, LB26DA : 13,000 1 BOT198A : 50, , TB18321B : 10, CB18322B : 30,000 CB18621A : 30, LB66A : 12, , TB18328B : 10, CB18329B : 30,000 CB18628A : 30, ,000 Note: Auction schedule is based on information from PDMO and BOT; may be subject to changes. 7

9 LB176A LB183A LB183B LB193A LB196A LB198A LB213A LB21DA LB233A LB236A LB2DA LB25DA LB267A LB27DA LB296A LB326A LB383A LB396A LB06A LB16A LB6A KBank Rich-Cheap Model bps (actual YTM vs. model) 15 3 mth avg Now Note: As of October 7 th, 2016