Market Roundup 13 January 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,681.73 points, decreased 5.72 points or 0.34% with a trading value of 87 billion baht. The analyst stated that the Thai stock market closed lower in an opposite direction of regional markets from a selloff in DELTA and other big-cap stocks. Meanwhile, foreign investors slowed down their investment.
The analyst expected SET Index to move in sideways trend next week with a support level at 1,660 points and a resistance level at 1,695-1,700 points.


2) China exports shrink lower-than-expected in December, growing 7.7% in 2022

China’s exports and imports for December shrank less than the market’s expectations, reflecting that the overall outlook for trade in the world’s second largest country was still growing in 2022.

In December, exports in U.S.-dollar terms fell by 9.9% year-on-year (YoY), which was slightly better than a forecast of a 10% decrease by Reuters poll. Meanwhile, imports shrank by 7.5% YoY, which was also lower than Reuter poll’s forecast for 9.8%.

China’s strong exports have been buoying its economy in recent years, but economists expected trade to slow down over shrinking demand from the U.S. and Europe. The effect was shown in October 2022 when China’s exports started to fall, which was the first time since May 2020.

Still, China’s exports record a 7.7% growth in 2022, while imports notched a 1.1% growth.


3) Dollar Index loses 10% in 3 months as market anticipates Fed’s slower pace on rate hikes

The Dollar Index has been plunging since the fourth quarter of 2022 as the market continued to anticipate a slower pace of interest rate hikes by the U.S. Federal Reserve after inflation data showed signs of slowing down after hitting decades high of 9.1% in June 2022.

A basket of U.S. trade partners’ currencies dropped around 10% from its high at around 114 in late September to 102, hitting a seven-month low.

The euro was up 0.03% to $1.0849, reaching a fresh nine-month high earlier in the session. Meanwhile, sterling was last trading at $1.221, up 0.08% on the day.

Japan’s yen also surged 2.7% against the greenback overnight and rose about 0.2% further on Friday to 128.65 per dollar. Yen was up around 6% in three weeks since the Bank of Japan stunned markets by announcing a measure to widen its band of the 10-year bond yield target late last year.


4) Korea’s central bank raises rates to 14-year high

On Friday, the Bank of South Korea announced a 25 basis point increase to the policy interest rate, a move that had been widely anticipated and which many analysts had projected would signal the conclusion of a tightening cycle that had begun in 2021.

After discussion, the Bank of Korea’s seven-member monetary policy board voted to raise the policy interest rate to 3.50%, the highest level since late 2008.

The reaction of the financial markets was mild before the central bank governor’s news conference. Futures on 3-year Treasury bonds were trading 8 points higher than their previous close, and the won was 0.75% stronger versus the dollar.

With Friday’s decision, the current tightening cycle, which began in August 2021, has seen a total increase of 300 basis points.