Kaohoon Morning Brief – 10 October 2022

1) AWS expects SET Index to slow down ahead of Fed’s meeting and inflation report

Asia Wealth Securities (AWS) expected SET Index this week to move within the range of 1,530-1,625 points,seeing the possibility for the Thai stock market to slow down in concerns of the Fed’s aggressive rate hike for the fourth 75bps raise in November.

The analyst also raised expectations for the ECB to accelerate its benchmark rate to control the inflation in the Eurozone.

Meanwhile, Thai stock market will have a long holiday later this week before the announcement of the U.S. inflation report, which could lead to smaller trading volum.


2) Market is now pricing in for 75bps Fed’s rate hike in November

The strong job market in September raised the market’s probability for another 75 basis points U.S. Federal Reserve’s rate hike to 82% in November, then 50 basis points in December and another 25 basis points in February 2023, pushing the Fed’s funds rate to 4.5%-4.75% range.

Nonfarm payrolls increased 263,000 in September, slightly lower than the Dow Jones estimate for 275,000. Meanwhile, the unemployment rate was 3.5%, down 0.2 percentage point.


3) China’s services activity falls for the first time in four months

China’s services activity in September contracted for the first time since May as Covid-19 restrictions in the month pressure China’s already fragile demand and negative business confidence.

The Caixin services purchasing managers’ index (PMI) in September fell sharply to 49.3 from 55.0 in August.