STIR: $-Bloc Year-End Pricing Little Changed Over Past Week, Except CA’s Firming

Thailand’s manufacturing sector outperformed ASEAN excluding Singapore in March. Unlike most countries in the region, it posted an increase in activity growth with the index rising to 54.1 from 53.5, the highest since December. While March production and orders growth improved, the outlook deteriorated with the year ahead its most pessimistic in almost four and a half years. According to the S&P Global PMI, Thailand’s soft inflation position is yet to receive a boost from troubles in the Middle East with both input and output indices stable around the breakeven-50 level.

• Thailand subsidises fuel with a price cap but that has been increased due to the jump in global oil prices. However, there was also a reduction in government fuel excise. Therefore, it is unsurprising that the PMI showed input cost growth little changed on the month and producers actually marginally reducing selling prices, likely to be more competitive.
• The Future Output Index slumped over 13 points with respondents concerned about the impact of the Iran War on demand and prices.
• Strong orders growth drove production and increased capacity constraints with backlogs rising. However, staff levels fell marginally for the second straight month.
• The March manufacturing PMI is consistent with the ongoing recovery in production. The March release is late April. The Bank of Thailand’s business confidence measure for March prints later on Wednesday. 

Thailand S&P Global manufacturing PMI vs  production y/y% 3-mth ma

Source: MNI - Market News/LSEG/Bloomberg Finance L.P.

Headlines crossed a little while ago from the WSJ: "*UAE PREPARING TO HELP US OPEN HORMUZ BY FORCE: WSJ
*UAE LOBBYING FOR UNSC RESOLUTION TO AUTHORIZE ACTION: WSJ". See the full article at this link. 

• Risk sentiment is off earlier highs, with US equity futures paring gains back to 0.20-0.30%, while oil prices have ticked up. Both WTI and Brent are up over 1.5%. WTI is near $103/bbl.  
• The WSJ notes: "The U.A.E.'s participation in freeing the strait carries risks, including the potential for tension with Iran that could outlast the end of the war and damage to its critical infrastructure and economy."
• It adds: "The Emirati Foreign Ministry said there is "broad global consensus that freedom of navigation in the Strait of Hormuz must be preserved."
• This highlights that even if the US ceases hostilities with Iran, which has been hinted as coming from both US President Trump and Secretary of State Rubio in recent remarks, how and volumes in terms of trade and energy flows through the Strait of Hormuz may remain very uncertain.
• Note we have US President addressing the nation at 9pm Wednesday evening US time, with an update on the Iran conflict expected.  

• Just as the official PMIs surprised to the upside, the RatingsDog (private companies / exporters) declined in March from the month prior.  The RatingDog survey results have tended to be stronger than those from the official poll over the previous year as exports powered China’s economy.
• RatingDog Manufacturing fell to +50.8 from 52.1 - its fourth month of expansion.
• Output fell to 50.8 vs 53.6
• New orders were down from the prior month.
• This release is heavily influenced by the Lunar New Year (LNY) cycle, primarily through a seasonal rebound effect distorting data for the month after.  However smaller companies are feeling the impact of the war, as it drives up fuel and freight costs and disrupts global shipping routes and air travel. The fallout from the hostilities has also shown signs of spreading across the world economy..
• Policymakers have said that continued countercyclical policy support, faster rollout of major government investment projects and more targeted measures to ease financing burdens on small and medium-sized enterprises will be key to boosting orders, reviving production and underpinning a solid start to the 15th Five-Year Plan (2026-30) period.
• In a statement released after the first-quarter meeting of its monetary policy committee for 2026, the PBOC said it would continue to implement a moderately loose monetary policy, step up countercyclical and cross-cyclical adjustments, and improve coordination between monetary and fiscal policies to promote stable economic growth and a reasonable recovery in prices.  The China Daily is reporting today that given strength in other data, expectations for imminent policy relief should be delayed.