Kaohoon Morning Brief – 16 February 2023

1) FSS expects short recovery as markets pricing in Fed’s rate hike outlook

Finansia Syrus Securities (FSS) expected a short recovery in Thailand’s SET Index within the range of 1,640-1,655 points following the trading momentum that investors started to pricing in Fed’s rate hike outlook that should peak at 5.25-5.50%. Meanwhile, retail sales data in the U.S. for January rose 3% over month and 6.4% on an annualized basis, which were largely higher than expectations, strengthening confidence in the market.


2) Japan’s trade deficit hits all-time high in January

Japan reported its worst trade deficit of 3.5 trillion yen (approx. $26 billion) for January, increasing by 59% compared to the 2.2 trillion recorded in the same period of 2021.

Exports rose 3.5% higher at 6.55 trillion yen on an annualized basis, however, imports soared 17.8% to just over $10 trillion.


3) Oil prices gained on Thursday despite higher crude inventory in US

Oil prices edged higher in the morning session of Asian trading hours on Thursday despite the report of a surge in the U.S. crude inventory, while the International Energy Agency (IEA) upgraded its demand outlook.

The international benchmark Brent crude rose $0.43 or 0.50% to $85.81 per barrel. The West Texas Intermediate (WTI) rose $0.45 or 0.57% to $79.04 a barrel.

U.S. crude oil stocks rose by 16.3 million barrels last week to 471.4 million barrels, which was the higher level since June 2021, according to the data released by the Energy Information Administration. However, the analysts said that the build in inventory would have no impact on oil prices as the larger-than-expected increase was largely due to a data adjustment.

Meanwhile, IEA’s expected oil demand to rise by 2 million barrels per day (bpd) this year, up 100,000 bpd from the previous forecast of 101.9 million bpd made last month, with China making up 900,000 bpd of the increase.