Kaohoon Morning Brief – 30 June 2022

1) FSS expects SET Index to move sideways-down without positive drivers

Finansia Syrus Securities (FSS) expected the SET Index to move in sideways-down trends in the range of 1,580-1,585 points as the market lacks new positive drivers. The main focus of the market remains on inflation rates that could stay longer at a higher level, resulting in potential aggressive rate hikes from central banks, which could lead to recession next year, especially the U.S. and European countries.

The analyst recommended investors to monitor the inflation rate in 3Q22 for any declining signals. Meanwhile, the economic recovery momentum is moving in a positive trend for Thailand from the reopening to boost its tourism industry.


2) Powell to prevent inflation from hurting US economy in the long run

The Federal Reserve Chairman Jerome Powell said at an ECB forum on Wednesday that the Fed would not allow inflation to take hold of the economy in the long run while adding that a soft landing is possible, though it will be quite challenging. However, the chairman noted that the process to get inflation lower will involve some pain.

Overall, Powell noted that the U.S. economy is in a strong shape and hopes for growth can remain positive as the U.S. economy can withstand monetary policy moves.


3) China factory activity rises in June

China’s official manufacturing Purchasing Managers’ Index for June was at 50.2, snapping three months of decline after the Chinese authorities lifted lockdown restrictions in Shanghai that led to a recovery in production and new orders.

The factory activity in June rose from 49.6 in May, but fell short from a Reuters poll that expected the PMI to come in at 50.5.