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Market Trend

The Major Economies' Recovery Was Slow. Hence, the Panel Industry Was Impacted Negatively.
Published Aug.07 2015, 11:13AM (GMT+8)

According to WitsView's latest statistics data, Market Confidence Index (MCI) declined 660.4 points, from 5060.9 points to 4400.5 points during the period from July 3rd to August 7th, 2015. The labor participation rate of the United States decreased from 62.9% in May to 62.6% in June; consequently, the unemployment rate declined to 5.3%, which is the new low for the past seven years. The US average hourly earnings remained unchanged, $24.95. Currently, even though the unemployment rate declined, the labor force in the job market was not fully utilized and the inflation rate was still too low. Many investors have paid close attention to the Federal Reserve's decision on the interest rate. The U.S. Federal Reserve chief Janet Yellen implied on July 15th and 16th that this year, the Fed will raise interest rate as planned; she believed that the Fed will slowly modify upwardly the Federal Fund Rate. The US' inflation rate in June increased 0.1% compared with what in May; however, this was still far from the Fed's goal, 2%. To reach the goal, the US government still needs to work on the job market. The relationship between the Greek government and its creditors was improved. Even though on July 5th, the Greek voters overwhelmingly denied international creditors' request; however, on July 10th, the Greek parliament passed the Greek primary minister's financial reform package and on July 13th, reached a bailout deal with international creditors. The Greek government used the short term finance provided by the Eurogroup to pay 4.2 billion Euros of debts due to the European Central Bank (ECB) and repaid the totality of its arrears to the IMF, equivalent to EUR 2.06 billion. Greece is therefore no longer in arrears to the IMF. The Greek government has officially requested the third bailout plan for paying the debts and avoiding Greece's finance collapse. 

China's National Bureau of Statistics announced in July that in June, CPI grew 1.4% YoY, slightly higher than the market's expectation, 1.3% YoY. The growth rate has been lower than 2% for ten consecutive months. The following factors, CPI growth and the policies of lowering the deposit reserve rates and lowering the interest rate by the People's Bank of China (PBC) on June 28th, made the inflation rate in June for China came to 1.4%, increasing 0.2% compared with the previous month's 1.2%. Although the CPI has become stable gradually, the benchmark data have been low. Consequently, the total demand has been still stable but not strong, the inflation rate has been relatively low. In the short term, China government still continues implementing its Quantitative Easing policy. Japan announced the CPI of June 2015 was 103.8, grew 0.4% YoY. The Japanese CPI has grown for 25 consecutive months. IMF has warned that Japan should not rely on the currency policy too much, and has been discouraged by the slow pace of Japanese economic structure reform. Currently, the Japanese inflation rate is totally supported by the currency exchange rate factor. If the Japanese central bank wants to reach the 2% inflation rate goal that was set in the past, it needs to implement further Quantitative Easing policies and makes the Japanese Yen to depreciate further.
The four major economies were better off than the previous month; however, the economic recovery momentum was not strong, and rather stagnating. Hence, the global panel industry was influenced. WitsView pointed out that in Q2, NB's end-market demand was weak; therefore, the market procurement momentum was not strong, declining 10% YoY. As for the TVs, even though TVs' sales grew slightly 8% YoY; however, the inventory levels have been increasing. Influenced by the European market, liquid crystal displays shipment declined largely 16% YoY. Lack of certainty in emerging markets' economies, the overall weak market demand, and accumulating inventories together add pressure to the panel industry for the 2Q15. Consequently, the peak season will cool down.

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