KBank Daily Update 28 August 2017

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2 KBank Daily Update 28 August 2017 Market highlight: The euro spiked against the dollar as top of ECB signaled a need of tightening monetary policy while Fed chair Janet Yellen avoided mentioning path of Fed rate hike. FX market mover: EUR/USD increased by 1.06% to The euro climbed after Draghi did state that the ECB will have to be patient on monetary policy at the Jackson Hole Symposium. USD/THB declined by 0.26% to The baht strengthened in line with most currencies as the dollar came under pressure after the Jackson Hole Symposium. Factors to watch today: Impact of Hurricane Harvey on global oil price and US trade balance Thai Stock Market 25-Aug Change US Market 25-Aug Change SET Index 1, Dow Jones Aug 25 21, Market Turnover (Bt mn) 46, , S&P 500 2, Foreign Net Position (Bt mn) , Dollar Index Thai Bond Market 25-Aug Change US 10 yr T-note (%) Total Return Index US 2yr T-note (%) Total Market Turnover (Bt mn) 1,258, , NYMEX crude ($/b) TGB Yield Curve 1m 3m 6m 1yr 2yr 3yr 5yr 7yr 10yr 12yr 14yr 18yr 25-Aug Change (bps) Interbank Rates 28-Aug 25-Aug BIBOR 1w 1m 2m 3m 6m 1yr Overnight (%) Aug Repurchase Rates 1-day 7-day 14-day 1m Spot Gold ($ /oz) 25-Aug change 25-Aug THBFIX (pm) 1m 3m 6m 1yr LIBOR 1m 3m 6m 25-Aug Aug yr 2yr 3yr 4yr 5yr 7yr 10yr 28-Aug Bid/Ask 1.325/ / / / / / /2.315 KBank counter rate Buying Selling Premium (1 month) (against THB) Sight Bill T/T T/T Export/Import USD /1.70 EUR /10.12 GBP /7.66 JPY /6.07 KBank Technical Analysis 28-Aug 25-Aug Support Resistance Trend Strategy USD/THB (Onshore) Sideway Down Sell USD/THB near support USD/JPY EUR/USD EUR/THB JPY/THB Sideway Down Sideway Down Sideway Down Sideway Sell USD/JPY near support Sell EUR/USD near support Buy EUR/THB near support Neutral 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.

3 Macro & Fixed Income Market US durable goods order Daily performance Daily performance Macro update: Top central bankers disappointed the investors at Jackson Hole Symposium. The investors expected Fed and ECB presidents to comment on their path of tightening monetary policy after inflation showed lower than expected. However, US Federal Reserve chair Janet Yellen did not address future monetary policy actions, instead she focused on the history of the crisis and what regulators have done in response. ECB president Mario Draghi said that significant monetary accommodation was still needed and that inflation was not yet converging to the central bank's target while he did not mention about euro strength as he did in the latest ECB policy meeting. EUR/USD thus spiked after Draghi s speech. US durable good orders signaled growth of business activities even through the number disappointed a market. US durable good orders fell 6.8%MoM SA more than expected 6.0% drop in July. It was even weaker than 6.4% growth in the previous month. A disappointed number was mainly from only 22 aircraft orders in July, sharply down from 184 in the prior month. However, non-defense capital goods orders excluding aircraft, a proxy for business spending plans, increased 0.4% last month after being unchanged in June. Shipments of core capital goods jumped 1.0% after an upwardly revised 0.6% increase in June. Business spending on equipment added 0.44%. This signaled that businesses are boosting spending despite uncertainty over the prospect of tax cuts. Fixed income market: Thai government bond yields dropped on Friday. The yield on the 2-yr government bond was unchanged at 1.49%, but the yield on the 10-yr government bond dropped by 1 bps to 2.47%. US treasury yields dropped after the Jackson Hole Symposium. The yield on the 10-yr treasury dropped by 3bps to 2.20%, while the yield on the 2-yr dropped by 2bps to 1.33%.

4 Bond Market Indicators Thai government bond yields Thai government bond yields spreads % Thai government bond implied curve shifts tenor, yrs /08/ % US government bond implied curve shifts tenor, yrs /08/2017 next 3 months next 6 months next 12 months

5 FX Market Current trend: Monetary policy makers at the Jackson Hole Symposium gave little indication about the future direction of monetary policy for this year. The dollar was sold off after the Fed chair continued to remain dovish, while Draghi also gave little indication about the ECB s next move. Moving on, the main focus this week will be on US labor market data. Essentially, the non-farm payroll numbers will be released at the end of the week and will bear importance. The market is of the view that this number will likely continue to point towards the strength in the US labor market. EUR/USD increased by 1.06% to The euro climbed after Draghi s comments at the Jackson Hole Symposium. Even though Mr Draghi failed to give any signals about the ECB s next move, his lack of remarks about the euro s strength led to the climb in the EUR/USD. Overall, his speech did not focus on monetary policy, but he did state that the ECB will have to be patient even though the economy has recovered. USD/JPY dropped by 0.20% to The yen strengthened against the dollar as the latter was sold off after the Jackson Hole Symposium. GBP/USD increased by 0.62% to The pound also strengthened in line with other currencies, as the dollar came under buying pressure. Asian currencies mainly strengthened as the dollar came under pressure after the Jackson Hole Symposium. The Fed chair failed to give any signals about the Fed s next move. Instead, she mainly spoke about US financial regulations post the 2008 crisis. As such, the market took this as a dovish sign from Janet Yellen. Apart from this, Mr Kaplan stated that the Fed should start the balance sheet normalization plan relatively soon. USD/CNY dropped by 0.14% to The yuan strengthened in line with other regional currencies. USD/THB declined by 0.26% to The baht strengthened in line with most currencies as the dollar came under pressure after the Jackson Hole Symposium.

6 Currency Movement Morning Closing rates Daily Consensus forecast Spot 25-Aug Aug-17 % Change 3Q2017 4Q2017 USD/THB** USD/JPY EUR/USD GBP/USD USD/CNY USD/SGD USD/IDR 13,333 13,349 13, ,327 13,370 USD/MYR USD/PHP USD/KRW 1,122 1,122 1, ,138 1,150 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

7 KBank THB NEER index As of 28 th August, 2017

8 KBank Rich / Cheap Model As of 28 th August, 2017

9 LB176A LB183A LB183B LB193A LB196A LB198A LB213A LB21DA LB233A LB236A LB24DA LB25DA LB267A LB27DA LB296A LB326A LB383A LB396A LB406A LB416A LB446A KBank Rich-Cheap Model bps (actual YTM vs. model) 15 3 mth avg Now Note: As of October 7 th, 2016