The SET started off on the wrong foot on Monday as the index dove 1.03% in response to the Friday speech by Federal Reserve Chair Janet Yellen, saying that the U.S. Federal Reserve appeared to be confident that the central bank is on track to raise interest rates this year. 

More bad news for the Thai exporters from Japan after the Japan Ministry of Finance said on Monday that Japan's April exports rose 8% year-on-year, beating the 6% forecast polled by The Wall Street Journal and the Nikkei Business Daily, while imports fell 4.2%, missing the consensus of a 1% decline. According to Trading Economics, Thailand exported about U.S. $1.69 billion to Japan in April of 2015. Japan accounts for 10% of Thailand’s total worldwide exports.

Economists at Barclays in New York revised their estimate for U.S. second-quarter growth to 2.7% from 2.5% after a decent U.S. durable goods report on Tuesday, while the drama of the Greek debt seems to unending. The news sent the U.S. dollar surging against the major currencies and took the USD/THB along with it. The weak Thai baht and a surge in the Thailand 10-Year Government bond yield drove the SET down another 0.67%. The banking, energy, consumer-related and high-flying healthcare service stocks all got hammered.

The SET traded sideways for the rest of the week in light volume trading with more bad news from the Office of Industrial Economics Thailand on Thursday that Thai Industrial Production fell to a seasonally adjusted -5.30% in April, from -1.80% in March. Analysts had expected Thai Industrial Production to fall to -2.00% last month. 

In a report by the National News Bureau of Thailand on Friday, the Bank of Thailand (BOT) said that growth of private consumption dropped from 0.4% in March to -1.3% in April. The BOT is expected to do some more trimming of their GDP estimates of 3.8% during the meeting of their Monetary Policy Committee on June 10. Last week, Finance Minister Sommai Phasee said that the ministry revised the full-year 2015 GDP downward to 3.5%, from 3.7%, the third GDP downward revision this year as the Thai economy has struggled to regain traction. 

The USD/THB exchange rate ran up to an intra-day high of 33.92 baht per dollar on Wednesday, a fresh six-year high, before pulling back to close on Friday at 33.70 baht per dollar, up 0.66% for the week. The 10-year Thailand Government bond yield dropped 3.1% for the week to close at 2.81% on Friday. The yield spread between the U.S. 10-Year Treasury, yielding at 2.123%, and the Thailand 10-Year Government bond has narrowed to 0.687%. 

The SET closed on Friday at 1496.05, down 1.82% for the week and a gain of 1.76% year-to-date. This week, Krung Thai Bank [SET:KTB] cut its key lending rates and tanked another 2.15%, on top of a 6.03% tumble last week. Kasikornbank [SET:KBANK] had cut its key lending rates last week but its stock was still down another 2.25% this week. 

PTT pcl [SET:PTT], Thailand’s largest state-controlled fully integrated gas and oil company, tanked 3.32% this week, despite the crude oil price trading at the U.S. $60 per barrel level. There is a big debate amongst the U.S. hedge funds whether crude oil will move higher, or lower, from the U.S. $60 per barrel level. 

From our technical viewpoint, the SET is now back in a falling wedge pattern since the May 19 breakout was false. The 1,485 key technical resistance is now at risk as the SET could fall back to test the 1,468 level, the lower trendline resistance of the wedge. If the SET falls below the lower trendline resistance of the wedge, all bets will be off.

The headline risk when the SET opens on Tuesday is the second estimate of the first-quarter U.S. GDP, which came in at a negative 0.7% on Friday. Wall Street economists forecasted the first-quarter GDP second reading to contract 0.9%, compared to the initial reading of 0.2% growth. 

Greece, the ECB and IMF creditors are still talking, even though a debt payment and the expiration of its bailout program are on June 5 and June 30, respectively. It looks like keeping the debt crisis going on as long as possible is a good way to stop the euro from breaking out of the 1.14 dollars per euro level.