SINGAPORE, SINGAPORE -- (Marketwired) -- 07/08/13 -- In FXPRIMUS' ASEAN Market Review for 5 July, the brokerage firm highlights Thailand's weakening currency.
Thailand's inflation remained in a lower range in June, growing 2.25% YoY from the previous 2.27% in May. Lowering inflation plays one of the key benchmarks among the different types of assets in Thailand, adding confusion for investors if they use similar models compared to investing in other ASEAN countries.
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Source: Bloomberg, FXPRIMUS
The Stock Exchange of Thailand (SET) index followed the Morgan Stanley Capital International (MSCI) Asia ex-Japan index closely since the middle of March. This means domestic economic releases may continue contributing the LEAST impact to equities pricing, due to the "Federal Reserve's (Fed) Quantitative Easing (QE) Tapering" dominating the entire Asian sentiment, and besides the Chinese banking sector's liquidity conditions.
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Source: Bloomberg, FXPRIMUS
According to FXPRIMUS' Director of Business Development Mmario Singh, "Worries should continue until the end of the year unless fundamentals change in the U.S. or Euro Zone. However, I think the chance for those changes to appear aggressively could be relatively low. Portugal's recent 10-year yield's surge failed, bringing turmoil in the currency bloc again, and the latest rebound of Automatic Data Processing (ADP) payroll data suggests that recovery in the U.S. market continues on track. Having said that, the word "adjustment" which Ben Bernanke used in June's Federal Open Market Committee (FOMC) meeting could be read more as "tapering" instead of adding stimulus. Hence, the Baht has barriers to edge higher against the Greenback."
Sovereign bonds in Thailand, with the upside inflation risk eased according to the latest few readings, outperformed other sovereign bonds, such as in Indonesia and the Philippines, as subdued inflation still allows local officials to act further if needed.
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Yesterday, the consumer confidence index in Thailand fell to 81.6 in June from 82.5 in May, as the Finance Minister lowered the growth target in 2013 on concern for a possible delay in infrastructure projects.
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