Kaohoon Morning Brief – 28 June 2022

1) FSS expects SET Index to continue edging higher with limited upside around 1,600pts

Finansia Syrus Securities (FSS) stated that the SET Index could move in sideways to sideways-up trends today after being able to maintain above 1,580 points yesterday. However, the upside would be limited as the index moves toward 1,600 points. The market is easing on the Fed’s rate hike, expecting no recession from the move. The analyst recommended investors to monitor the U.S. economic data such as employment rate and June’s inflation before the next meeting on 26-27 July that the market expected a 75 basis points raise.


2) S&P cuts US 2023 GDP forecast and unemployment will rise

The S&P expected that the economic momentum will likely protect the U.S. economy from recession in 2022. While maintaining 2022 GDP growth forecast at 2.4%, the S&P lowered 2023 GDP forecast from 2.0% to 1.6%, saying that it is hard to see the economy walking out of 2023 unscathed amid supply-chain disruptions worsening as the weight of extremely high prices damage purchasing power and aggressive Federal Reserve policy increases borrowing costs.

The S&P also expected the labour market, which has had a strong recovery from the Covid-19 pandemic, will struggle as Fed hikes continue. The unemployment rate was expected to rise from 3.6% last month to 4.3% by the end of 2023 and more than 5% by the end of 2025.


3) BOJ is buying more debt than ever to hold its yield curve for 10-year bond

The Bank of Japan now holds more than 50% of all Japanese government bonds for the first time ever as the central bank has been buying up more than four times as much debt as it has ever purchased to defend its yield curve control range for the 10 year bond.

According to Nikkei Asia, BOJ may have been saddled with as much as 600 billion yen ($4.4 billion) in unrealized losses on its government bond holdings earlier this month.


4) Crypto hedge funds Three Arrows Capital just defaulted on  $670 million loan

Three Arrows Capital, one of the most prominent crypto hedge funds, has just defaulted on a $670 million loan.

In the statement issued on Monday, the fund said that it failed to repay a loan of $350 million in the U.S. dollar-pegged stablecoin and 15,250 bitcoin worth about $323 million of the current trading prices at that time.