THAILAND: Eyes On Constitutional Court As It May Set Date For PM's Hearing
Pheu Thai Party (PTP) officials dismissed the possibility of suspended Prime Minister Paetongtarn Shinawatra stepping down before the Constitutional Court delivers a verdict that could remove her from office. On the contrary, one of the party's MPs called on the Court to delay its decision amid ongoing crises facing Thailand. This comes as the Court convened for a regular meeting today amid expectations that it might set the hearing date.
- The Constitutional Court typically holds its meetings on Wednesdays but it has not provided any updates on the case on and after August 6. Ex-Election Commissioner Somchai Srisuthiyakorn wrote on Facebook that this was likely due to five judges being abroad between August 4-9, but today's meeting might bring some progress on the matter.
- Local media reports confirmed that the Court convened for a regular meeting today. According to Somchai, it could set the date for a hearing in Paetongtarn's case, likely for August 20 or 27. Alternatively, if the Court deems the evidence submitted so far insufficient, it could also request further information from relevant agencies or summon witnesses.
- Earlier this morning, People's Party (PP) leader Natthaphong Ruengpanyawut called on the Prime Minister to step down voluntarily, which would terminate the proceedings. However, Thai Enquirer reported that PTP officials denied any resignation plans on Paetongtarn's part, with Acting PM Phumtham Wechayachai stressing that there is no backup plan for her removal.
- Just yesterday, Pheu Thai MP Cherdchai Tantisirin urged the Constitutional Court to delay its decision by six months to allow Paetongtarn to deal with the border crisis with Cambodia, the developing tariff situation, and other burning domestic issues. He said that if Paetongtarn is ousted, PTP's Chaikasem Nitisiri would probably be endorsed as prime ministerial candidate.
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EQUITIES: An Unusually Busy Start to Quarterly Earnings Season
As noted above, quarterly earnings season kicks off in earnest today, and it's an unusually busy start to the quarter. 9.4% of the S&P 500's market cap is set to report, with the usual early focus on big banks and financials. Our full quarterly earnings schedule found here, including EPS, revenue expectations and full timings: https://mni.marketnews.com/44tWRA8
Highlights are:
- TUES: JP Morgan, Citigroup, BNY Mellon, Wells Fargo, Blackrock
- WEDS: Johnson & Johnson, Bank of America, Morgan Stanley, Goldman Sachs
- THURS: General Electric, Netflix, PepsiCo
- FRI: American Express, 3M, Charles Schwab
Tariffs remain a key buzzword in corporate reports. Heavy industry including General Electric, Snap-On and 3M which be watched for possible impacts, Markets will be particularly focused on any signs of frontloading of corporate purchases, the rate at which firms will passthrough costs to the consumer, and the expected impacts of tariffs on the bottom-line for consumer staples.
GILTS: Goldman Sachs: Outperformance Delayed
Commenting on last week’s price action, Goldman Sachs wrote “yields have yet to reverse the prior week’s underperformance, which we think is a reflection of a narrower path to gilt outperformance. Despite significant front-end rate relief, 10-Year (and long-end) gilts are hovering around the same levels vs. the start of the year”.
- Going into summer, they expect “little news on fiscal policy as parliament goes into recess. A slowdown in issuance and potential relief from the BoE’s next QT decision offers a relatively benign backdrop for the coming months, and with 10s30s reaching fresh local highs, the risk reward is improving for long-end curve flattening”.
- Goldman continue to think “the clearest pathway to lower yields will come from further disinflationary progress and incremental loosening of the labour market, and thus from the front-end”.
- They continue to recommend receiving December MPC-dated OIS, with this week’s data having the potential to drive fresh dovish repricing.
- Meanwhile, they suggest that “the upcoming Mansion House speech is unlikely to provide a major impulse to gilts, with a reemphasis of the fiscal rules, or hints at potential fiscal consolidation potentially a slight positive”.
NOK: Moves To Top Of G10 Leaderboard As Equities and Oil Extend Higher
NOK moves to the top of the G10 leaderboard. No obvious headline trigger for the move but it comes alongside a fresh extension higher for oil and equity futures. NOKSEK is now up 0.5% on the session to 0.9490, its highest since July 7. However, a move beyond the July 3 high at 0.9542 is required to reinstate a bullish theme.
- Initial support is the July 7 low at 0.9377, clearance of which would expose the June 26 low at 0.9329.
- A reminder that Norwegian June inflation was slightly higher than expected last week, but was still consistent with expectations for a quarterly pace of Norges Bank cuts continuing in September, in our view.
- This week’s Norwegian data calendar is essentially empty, leaving focus on cross-asset dynamics to dictate NOK rates and FX.
- A reminder that NOK liquidity tends to dry up in the summer months with many participants on holiday, which can exacerbate intraday volatility.
