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Local institutions and foreign investors may have had it and started dumping stocks on Thursday, after the Thailand consumer confidence index of the University of the Thai Chamber of Commerce came in at 74.4 in June, compared to 75.6 in the previous month, its sixth consecutive month of declines. Weak consumer confidence came on the heels of worse-than-expected May factory output on Tuesday. The Industry Ministry of Thailand said that May output dropped 7.6% from a year earlier, the largest fall since March 2014. The number missed a Reuters poll forecast of a 4.8% decline.
The U.S. Department of Labor said on Thursday that the June jobs numbers came in with a 223,000 gain, below estimates of a 230,000 gain. The April and May numbers also got knocked down by a 60,000 revision. The labor force participation rate and average hourly earnings, the data that the U.S. Federal Reserve are focusing on, are weak. Based upon the data from the June jobs report, the U.S. Federal Reserve may have to think twice about raising the rate by September. The IMF and World Bank urged the Fed last month not to hike the rate until 2016. The Fed is risking losing their credibility if they decide to hike the rate, and it botches the U.S. and global economy next year.
Greece's Prime Minister Alexis Tsipras will be facing an unpleasant surprise with Sunday’s referendum if there is a “Yes” vote. Greece Finance Minster Yanis Varoufakis, already said on Bloomberg TV that he’ll resign if there is a “Yes” vote. Mr. Tsipras said late Thursday that he will travel to Brussels on Monday and sign the deal, regardless of the referendum vote outcome. There is no response from Brussels yet.
Based upon previous reactions from Brussels lately regarding Greece, one may say that everyone has had enough with Mr. Tsipras. From a risk management prospective, “don’t count on anything on Monday”.
From our technical viewpoint, the SET has been moving in a symmetrical triangle since February or March as the SET is now bouncing along the lower trendline support. The market is increasingly bearish as the SET closed today below the major trendline support. In the case of a further pullback, there are several short-term supports at the 1,480 level and at 1,469.11, or the 61.8% Fibonacci retracement level. In the event of a symmetrical triangle breakdown, the long-term supports are at 1,375.99, 1,307 and 1,110. If the SET breaks out to the upside, the head resistances are 1,649.77 and 1,674. |
