Global equity markets higher over the week ended June 5, 2015, with the MSCI AC World Index strengthening by 1.71 per cent. The US equity market posted a gain of 2.21 per cent over the week, as markets digest recently released US economic data. Japanese equities inched 1.26 per cent higher, while European equities posted a 1.52 per cent gain. The positive performance of these indices was mainly caused by the weakening of ringgit against their base currencies over the week.
In other regions, both emerging and Asian markets fared slightly better, with the MSCI Emerging Markets Index and the MSCI Asia ex Japan Index higher by 0.66 and 0.97 per cent respectively over the week. Taiwan and South Korea saw their respective equity markets declined by 1.69 and 0.19 per cent, while Hong Kong posted a gain, with the Hang Seng Index higher by 2.31 per cent. While China’s HSML 100 Index registered a gain of 1.78 per cent over the week, its local equity market continued its strong rally, with the Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index gaining 11.94 and 11.06 per cent respectively. Russia was the worst performing market under our coverage this week as the RTSI$ Index fell -1.98 per cent. Indian equities also incurred losses, as the Sensex index lost 1.6 per cent after the Reserve Bank of India announced its third interest rate cut of this year.
The bright spots in global equity markets over the week were Thailand and Brazil. In Thailand, the benchmark SET Index inched 3.06% higher while in Brazil, the Bovespa Index gained 4.06 per cent over the week despite industrial production falling for a third consecutive month.
Southeast Asia: Thailand’s consumer price index (CPI) down in May
Thailand’s CPI posted a surprise drop, decreasing by 1.27 per cent year-on-year (y-o-y), lower than the consensus estimates of a 1.1 per cent y-o-y and a prior 1.04 per cent y-o-y decrease. Contraction of CPI was mainly caused by a decrease in the price of transportation segment, which recorded a 6.36 per cent y-o-y decrease. It is also noted that transportation costs have declined for six months consecutively. In the release of May’s CPI data, a Commerce Ministry director general, Somkiat Triratpan told reporters that the recent “negative inflation” is rooted in lower energy prices and “not from the poor economy”. As inflationary pressures remained benign and disinflationary amidst a sluggish growth environment, any tightening in monetary policy in the near term remains low at this juncture.
US: May’s NFP data beats expectations
The US economy created 280,000 jobs in May, beating expectations as nonfarm payrolls registered its largest gain since December 2014. The gains occurred mainly in the Professional & Business Services, Leisure & Hospitality, and Healthcare sectors, which added a combined total of 167,000 jobs in May. However, employment in the Mining sector fell for the fifth consecutive month, trimming 17,000 jobs in May. Employment in other major sectors, including Manufacturing, Wholesale Trade, Information, and government, showed little change over the month. Average hourly earnings in May also rose more-than-expected by 0.3 per cent month-on-month. The unemployment rate rose slightly by 0.1 to 5.5 per cent, as more people entered the labour force seeking for employment. With the US economy off to a slow start in the first quarter, May’s data underscored the confidence of US businesses and reaffirmed our view that economic momentum continues to accelerate in the US economy.
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