Kaohoon Morning Brief – 8 December 2022

1) FSS says lower oil prices pressure energy, but helps anti-commodity stocks

Finansia Syrus Securities (FSS) expected the SET’s sideways-down movement to continue. However, it should not decelerate from earlier. The Thai main index has crucial support at 1,610 points, which was good throughout November. It should see continued pressure from international factors due to concerns over the economic slowdown, which reflects in the U.S. 10Y and 2Y bond yields. The inverted yield curve persisted and increased to over 80 bps. Crude extended its losses. The WTI dropped to US$72 a barrel from US$80 a barrel last week. It pressures energy, particularly upstream and midstream. However, it helps anti-commodity, such as power and building materials, due to lower cost pressure. Also, it is a boon for consumption-related due to improved purchasing power. On the local front, the outlook remains healthy. Also, it has lower risks than international factors. FSS still focused on investing in domestic and consumption plays.


2) US bond yields fall to 3-month low amid economic concerns

U.S. bond yields fell to its lowest level in three months on Wednesday as investors were monitoring the impact to the economy from Fed’s aggressive rate hikes to tame inflation.

The 2-year Treasury yield dropped 10.2 basis points to 4.256% as of 3 p.m. Eastern. The 10-year Treasury yield fell 10.5 basis points to 3.407%, and the 30-year Treasury yield retreated 10.7 basis points to 3.414%.

At one point, the 2 and 10-year U.S. yield curve were the most inverted since 1981 with a spread of -84bps.

Meanwhile, Gold  rose 1.1% to $1,789.67 per ounce amid falling bond yields.


3) Hong Kong home prices fall to lowest level since 2017

Hong Kong’s home price index fell 2.4% on a monthly basis to 352.4 in October, marking the lowest level for the indicator since November 2017 as rising interest rates and a mass exit of expat workers drove down prices.