|
The SET index surged 2.18% for the week, up 19.79% for the year, to close on Friday at 1,542.94, led by big cap stocks including CP All PCL (SET:CPALL), up 59.24% for the year, and energy stocks, such as PTT PCL (SET:PTT) and PTT Exploration and Production PCL (SET:PTTEP), up 52.5% and 68.1%, respectively, for the year along with the Brent crude price, which was up 52.4% in 2016. The SET may continue to move in an ascending channel with the next head resistance at 1,552, as the index shrugged off the weak baht and is more correlated to the strength of the Brent crude price.
The FX hedging strategy to minimize foreign exchange risk may be unnecessary this year, as the USD/THB exchange rate came full circle, down just 0.57% for the year. The Bank of Thailand aggressively buying U.S. Treasury securities, about $20.1 billion since the beginning of the year until October, or a 51.4% increase in its holding, may have helped to keep the USD/THB currency pair from falling.
The USD/THB, which has been pushing the 36 baht resistance level since December 20, pulled back to close on Friday at 35.823 baht per dollar, down 0.35% for the week. The U.S. Dollar index (DXY), a measure of the U.S. dollar value relative to a basket of foreign currencies, closed at 102.29, down 0.64% for the week, up 3.59% for the year, after Mr. Obama announced new sanctions against Russia on Thursday.
The yield of Thailand 10-year government bonds tanked 7.85% for the week, up 7.14% for the year, to close at 2.7% on Friday. The 10-year yield jumped to 2.95% on Monday, where buyers stepped in. The yield spread between the Thailand 10-year bond and the benchmark U.S. 10-year Treasury Note, yielding at 2.446% on Friday, narrowed to 0.254 percentage points.
The WTI crude price gained 1.32% this week, up 44.9% for the year, to close at $53.72 per barrel on Friday, while the Brent crude spot price surged 3.01%, up 52.4% for the year, to close at $56.82 per barrel. The WTI crude price is bumping into a $53.96 resistance level, or 76.4% Fibonacci retracement, as the market is in a wait-and-see mode ahead of the OPEC and non-OPEC production cut of 1.8 million barrels per day (bpd), beginning in January 2017.
The EIA weekly U.S. oil inventory report on Thursday showed that domestic crude supplies rose by 614,000 barrels to 486.1 million barrels, excluding the Strategic Petroleum Reserve, in the week ending December 23, compared to The Wall Street Journal forecast for a stockpile decline of 1.2 million barrels. The American Petroleum Institute (API) inventory data on Wednesday showed a U.S. crude inventory increase of 4.2 million barrels.
Separately, the EIA said the weekly U.S. crude oil production dropped 20,000 bpd for the week ending December 23, to 8.766 million bpd. Weekly U.S. crude oil output has fallen about 8.78% from the peak level of 9.61 million bpd during the week ending June 5, 2015. Houston-based oilfield services company Baker Hughes Inc. said on Friday that the U.S. oil rig count inched up 2 to 525, compared to 316, when the rig count hit the low on June 6, 2016.
|
