Kaohoon Morning Brief – 12 July 2022

1) FSS expects SET Index to move sideways as investors wait for U.S. inflation

Finansia Syrus Securities (FSS) stated that it expects the SET to continue moving sideways within 1,548-1,570 points. The market still lacks fresh catalysts, and investors are waiting for the U.S. inflation for June. It is due Wednesday night and would influence the Fed’s rate increase at the meeting in July. According to the latest data, the Dollar Index increased to 108, the highest in 20 years. It pressured the Thai baht to weaken above Bt36 a dollar again.

Generally, global equity market rallies remain limited due to the stubborn inverted yield curve, reflecting concerns for a recession in 2023. However, FSS still views that the SET would outperform its peers due to its upward economic trend, which diverges from others. This week, the spotlight is on banks’ 2Q22 earnings season. FSS stated that it still sees crucial support at 1,500-1,520 (+/-). If the index decreases to the said level, it will present an opportunity for accumulation. In this regard, the securities company still focuses on investing in necessity-related value plays and reopening stocks.


2) Euro drops to 20-year low amid concerns of recession from energy crisis

The euro slid to a 20-year low on Monday, coming closer to parity against the dollar on Monday amid concerns that the energy crisis will drag economies of European countries into recession. Meanwhile, the dollar strengthened ahead of anticipation of the Fed’s aggressive rate hike than its peers.

Russia shutdown its operations of the Nord Stream 1 pipeline for its annual maintenance. Nord Stream 1 is the European Union’s biggest pipe for importing gas from Russia. The closure runs from July 11 through to July 21.


3) Twitter says Musk’s attempt to terminate deal is invalid

Twitter said that Elon Musk’s effort to terminate the deal is invalid and wrongful, saying that Twitter has breached none of its obligations under the Agreement. The law firm hired by Twitter said that the deal with Musk remains in effect.

“As it has done, Twitter will continue to provide information reasonably requested by Mr. Musk under the Agreement and to diligently take all measures required to close the transaction,” Twitter’s lawyer wrote.