Interest rates to stay at ‘extraordinary’ low levels, says Draghi. Interest rates have to stay at record low levels despite the resurgence in the eurozone economy because the upturn may not be sustainable, Mario Draghi told MEPs. “Despite a firmer recovery, and looking through the volatile readings in HICP inflation over recent months, underlying inflation pressures have remained subdued. Domestic cost pressures, notably from wages, are still insufficient to support a durable and self-sustaining convergence of inflation toward our medium-term objective,” said the president of the European Central Bank. (Telegraph, 30/5/17)
Fed’s Brainard: Rate hike likely appropriate soon, but slowing inflation could prompt rethink on hikes. Federal Reserve Governor Lael Brainard said Tuesday that an interest rate hike is “likely appropriate soon,” but slowing inflation could change that. Speaking at the New York Association for Business Economics luncheon on Tuesday, Brainard also said recent inflation numbers are lower than expected and there is little sign of wage inflation heating up. (CNBC, 31/5/17)
China’s non-manufacturing activity quickens in May. China’s non-manufacturing activity accelerated in May, official data showed Wednesday. The non-manufacturing purchasing managers’ index (PMI) came in at 54.5 this month, up from 54 in April, according to the National Bureau of Statistics (NBS). The index has been above 54 for eight consecutive months. A reading above 50 indicates expansion, while a reading below reflects contraction. (Xinhua, 1/6/17)
China’s non-manufacturing activity quickens in May. China’s non-manufacturing activity accelerated in May, official data showed Wednesday. The non-manufacturing purchasing managers’ index (PMI) came in at 54.5 this month, up from 54 in April, according to the National Bureau of Statistics (NBS). The index has been above 54 for eight consecutive months. A reading above 50 indicates expansion, while a reading below reflects contraction. (Xinhua, 1/6/17)
BOT is ready to manage the stronger THB. BOT’s governor Veerathai Santiprabhob said that the bank is ready to manage rapidly strong THB after the weaker USD due to Trump’s plan regarding tax reform and fiscal policy. Moreover, the strong growth of Thai economy in the 1Q17 also attracted the flow. This is to be noted the THB movement and other currencies are a concern. (Bangkok Biz, 31/5/17)
Cabinet nod for BTS Joint Venture concession to construct Pink and Yellow Line rail routes. The Cabinet on Tuesday approved the awarding of a concession to BTS Joint Venture group to build the Pink Line rail route from Kai Rai to Min Buri district and the Yellow Line route from Lat Phrao to Sam Rong, at a combined cost of Bt100 billion. The group comprises three listed companies: BTS Group Holdings, Sino-Thai Engineering and Construction, and Ratchaburi Electricity Generation Holding. Under the concession, the government will invest Bt50 billion in the two projects by laying out an annual average of Bt5 billion over 10 years, with the remainder to be invested by BTS Joint Venture. (The Nation, 31/5/17)
BOT expects growth in 2Q17 due to the drive from government investment, private consumption, and exports growth. However, private investment is still contracting. (Daily News, 1/6/17)
NBTC approves reduction in USO fee. The telecom sector will benefit from NBTC’s approval of a reduction in USO fee from 3.75% to 2.5% to reduce the burden on operators. This will be in effect as of June 1. (Thun Hoon, 29/5/17)
U.S. crude stockpiles slump as refining surges to record high: EIA. U.S. crude stocks fell sharply last week, driven by a surge in refining and exports to record highs, while gasoline inventories also dropped sharply ahead of the start of the summer driving season, the Energy Information Administration said on Thursday. The government data boosted oil prices, acting as a salve for the market’s ongoing concerns about a global glut. Crude inventories fell 6.4 million barrels in the week to May 26, far more than analysts’ expectations for a decrease of 2.5 million barrels. (R euters, 2/6/17)
BoT tracking offshore inflows. The Bank of Thailand is still closely monitoring offshore inflows after the baht appreciated to just shy of 34 to the US dollar. The central bank will also hold steady on its tapering measures for short-dated bonds next month. (Bangkok Post, 30/5/17)
Bo Stenberg
The baht broke 34 against the dollar today. Mai mee barn ha.
Praya
It’s time for criptocurrencies? Bitcoin booming, there are big money buying…. I never bought it but I guess it will be my greatest regreat….
Pon
A form of it sure.