Kaohoon Morning Brief – 11 October 2022

1) FSS remains bullish on domestic and reopening plays despite SET Index trending down

Finansia Syrus Securities (FSS) expected the SET to extend its short-term sideways-to-sideways-down movement within 1,560-1,580 points (+/-) due to the upcoming long holidays. Also, the U.S. CPI for September is almost due. If it beats estimates, it will pressure the Fed to press on with its aggressive policy rate hikes. As a result, the Dollar Index and the U.S. bond yield surged again. Besides, the prospect of a global recession increases. It would pressure fund flows from risk assets at this time. In Thailand, investors should keep a close eye on the flooding situation. If it becomes severe and escalates, particularly near Bangkok, it will provide a risk. 

Next week, the market focus should turn to banks’ 3Q22 earnings season and the real sector’s earnings preview. Although they are generally unexciting since the rainy season is a low season, FSS maintained its bullish view of domestic and reopening plays in 4Q22 when tourism and spending resume their high season. Also, they should accelerate in 2023.


2) JPMorgan’s Jamie Dimon expects the US to face recession within 6-9 months.

JPMorgan’s CEO Jamie Dimon said the U.S. economy is currently looking better than the 2008 global financial crisis era when the world tips into recession, but what comes next in the future, including series of rate hikes, rising inflation, the unknown effects of quantitative tightening and Russia’s war in Ukraine could tip the U.S. economy into recession six to nine months from now.

Meanwhile, he mentioned that Europe is already in recession.


3) German bonds crash after announcement to support joint-debt issuances 

German bonds crashed with 10-year yields rising to the highest level since 2011 at 2.34% on Monday after the report of Germany’s Chancellor Olaf Scholz stepping in to support joint-debt issuances to give a cushion from the energy crisis as the freshly raised money is disbursed to struggling member states as loans, not grants.


4) US to push ahead of Russian oil price cap at this week’s meeting with IMF

U.S. Treasury Secretary Janet Yellen said that the Treasury will continue to push for imposing a price cap on Russian oil after OPEC+ announced an output cut by a whopping two million barrels per day. 

She said that the plan will be discussed with other world finance ministers at the annual meetings of the IMF and World Bank that run this week in Washington, D.C.