Kaohoon Morning Brief – 15 December 2022

1) FSS recommends investor keeping eyes on ECB and BoE meetings after Fed hikes rates by 50bps

Finansia Syrus Securities (FSS) expected the SET Index to move sideways within 1,625-1,640 points to reflect mediocre Fed meeting outcomes. The tighter monetary policy and the prospect that inflation will remain high for longer than expected sent U.S. 2Y bond yield higher. However, the Dollar Index extended its losses. Upstream and midstream energy should see support from continued crude price recoveries for the third day.

Today, investors should keep an eye on ECB and BoE meetings. The consensus expected a continued policy rate hike of 0.5%. Next, the market focus would shift to an economic slowdown in the next 1-2 quarters to see how severe it would be.

FSS maintained its view that Asia would significantly outperform Europe and the U.S. In particular, China is gradually easing its restrictions. In Thailand, domestic consumption and tourism recovery would drive the economy. Also, the planned general election early next year would help offset exports, which risks a slowdown due to the global economy. FSS stated that it focused on investing in domestic and consumption plays.


2) US Fed hikes rates by 50bps and signals for higher levels to stay throughout 2023

On the final day of the Fed’s meeting, policymakers agreed to raise interest rates by 50 basis points, bringing it to a targeted range between 4.25% and 4.5%. The raise was in line with the market expectations, but Fed’s lifting its forecast for rates to peak at 5.1% caused concerns to the market.

Fed’s officials noted that they expected policy rates to stay at higher levels next year with no reductions until 2024.


3) US SEC aims to make some big structural changes in nearly two decades

The U.S. stock market will likely see its biggest changes in nearly two decades after the Securities and Exchange Commission on Wednesday voted to propose some adjustment to the market structure in order to boost transparency and fairness.

According to the SEC, the proposals include requirements of marketable retail stock orders to be sent to auctions before being executed as well as a new standard for brokers in display that they get the best possible executions for client orders and also a change in lowering trading increments and access fees on exchanges.