Asia Pacific markets are mixed; Election results in Thailand in focus, is getting stronger

The Thai baht rose on Monday, rising 0.6% to 33.73 against the US dollar, as it looks like Thailand’s opposition parties will be the biggest winners in Sunday’s general election.

The baht is hovering at its strongest level since February earlier this year when it was trading below the 33.5 threshold.

Refinitiv data showed that the currency witnessed its weakest point as recently as October last year, as the US Federal Reserve continued its tightening cycle to above 38.3 against the dollar, the weakest Thai currency since August 2006.

The Thai currency bucked the weakness seen in the forex market among Asian currencies on Monday, with the Japanese yen weakening 0.06% to 135.79 against the US dollar and the onshore Chinese yuan relatively flat.

The medium-term economic outlook for Thailand “may see increased risks of populist economic policies that may raise questions about fiscal discipline in the future,” Siti economist Nalin Chochuthitham said in a note on Sunday.

– Jihe Lee

Economic data releases and the G7 summit in Japan will be the highlights of this week in the Asia Pacific region.

On Monday, Thailand’s GDP for the first quarter will be released in the morning. Economists at Goldman Sachs expect the economy to grow 1.8% qoq as consumption picks up and inventories rebound amid slowing factory activity.

China releases a slew of economic data on Tuesday: industrial production, retail sales, fixed asset investment growth, as well as the unemployment rate. Compared to the low base seen in April last year, market watchers largely expect economic indicators to reflect a pickup in growth.

Economists polled by Reuters had forecast industrial output would grow 10.1 percent year-on-year in April, after a 3.9 percent expansion the previous month. They are also seeing retail sales rise 20.1% in the month after the economy saw a 10.6% jump in March.

The RBA meeting minutes as well as the first quarter wage price index will be released on Wednesday and Thursday respectively.

New Zealand will unveil its annual budget for this year on Thursday, which its finance minister described as focused on returning to a “more sustainable fiscal position”.

The Philippine central bank will meet and is widely expected to keep its policy interest rate unchanged at 6.25% on Thursday, especially after the economy saw a slight drop in inflation earlier this month.

If the central bank pauses the rate hike cycle, it will be the first since March 2022.

– Jihe Lee

European bank stocks are poised to outperform automakers for the foreseeable future, according to UBS.

The investment bank highlighted three structural changes that could lead to big gains for bank stocks over their auto counterparts, despite the similarities in their economic cycles.

CNBC Pro subscribers can read more about these three reasons here.

– Ganesh Rao

Bank of America strategists have named the 10 European stocks they believe are currently undervalued and can provide significant investment returns.

These picks, which the investment bank refers to as the “Beat Factor Top 10,” consist primarily of industrial and financial companies.

According to the investment bank, one stock is projecting an upside of more than 60% over the next 12 months.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Seventeen stocks in the S&P 500 reached new highs on Friday, with many of them trading at all-time highs. Food companies were among the prominent names.

New 52-week highs for the S&P 500:

• O’Reilly Auto traded at an all-time high leading up to its initial public offering in April 1993
• PulteGroup traded at an all-time high leading up to its initial public offering in 1972
• General Mills was trading at an all-time high when it began trading on the New York Stock Exchange in 1928
• Pepsico’s trading is at an all-time high dating back to the merger of Pepsi-Cola with Frito-Lay in 1965 to form Pepsico
• Solar first traded at levels not seen since September 2008

Meanwhile, there were 11 stocks that hit 52-week lows:

• Match Group trading is at an all-time low dating back to its November 2015 IPO
• The Organon traded at an all-time low dating back to its spin-off from Merck in June 2021

– Chris Hayes, Sarah Maine

Consumers became more pessimistic in May as persistently high inflation and problems in the banking industry weighed on sentiment.

The University of Michigan survey of consumers showed a reading of 57.7 for the month, down from 63.5 in April and below the Dow Jones consensus estimate of 63.

The one-year inflation forecast has now fallen to 4.5% but has risen in the five-year forecast to 3.2%, which is equal to the highest level since June 2008.

– Jeff Cox

Bitcoin is on track to end the week down 10.6%, making it its worst week since Nov. 11, in the days after the FTX crash, according to coin metrics.

It was last trading down more than 1% at $26,416.31. Earlier, it reached a low of 26,138.19%, the lowest since March 17. The crypto asset fell all week as investors weighed a host of negative developments, including:

• A false warning indicating that the US government is moving Bitcoin for a possible sell-off, triggering a wave of long liquidations;
• network congestion and high fees, which led to Binance pausing bitcoin withdrawals;
• Market makers Jump and Jane Street announced a decline in cryptocurrency operations in the US, under the pressure of regulatory crackdowns and adding to the existing cryptocurrency liquidity problem,
• Uncertainties surrounding the US debt ceiling and Federal Reserve policy.

Bitcoin finished lower or less than 1% high over the past six days. This in and of itself can influence mood, said Yuya Hasegawa, a cryptocurrency market analyst at Japan’s bitcoin exchange Bitbank.

– Tanaya McHale

More interest rate increases may be needed if economic data does not show more convincing signs that inflation is falling, Federal Reserve Governor Michelle Bowman said Friday.

“If inflation remains high and the labor market remains tight, then additional monetary policy tightening is likely to be appropriate to achieve a sufficiently constrained monetary policy stance to reduce inflation over time,” Bowman said in prepared remarks for the speech in Frankfurt, Germany.

Although consumer and producer price indices this week showed that the annual pace of inflation eased slightly in April, the central bank official said those numbers, along with last week’s non-farm payrolls report, “did not provide consistent evidence that inflation It’s on a downward trajectory.”

– Jeff Cox