Kaohoon Morning Brief – 17 February 2023

1) KSS expects weak movement range amid rising US producer price and strong job market

Krungsri Securities (KSS) expected Thailand’s SET Index to move in a weaker range between 1,650 – 1,645 points as investors remain cautious on the Fed’s rate hike that is expected to stay longer, while anticipating that there will be three more rate hikes for the remaining of this year to 5.25-5.50% as US PPI for January rose 6.0% YoY as well as strong job market. This led to strong US dollar and bond yield, which is a negative factor for investment at the current stage.


2) Producer prices rose in January

U.S. Producer Price Index (PPI) cooled down on an annual basis but at a slower pace in January, coming in at 6%, according to the Bureau of Labor Statistics, compared to 5.4% expected.

On a monthly basis, the PPI rose 0.7% in January after a drop of 0.2% in December and a 0.4% expected by economists. Meanwhile, core PPI, which strips out volatile food and energy prices, was up 0.5% MoM after a 0.3% rise in December. The annual core PPI slowed to 5.4% from December’s 5.8%.


3) Singapore’s exports plunge sharply in January

Singapore’s non-oil domestic exports continued to fall by 25% in January from a year ago, marking its fourth consecutive month of contraction. The decline was much lower than the 20.6% year-on-year fall in December 2022 and compared with expectations by a Reuters poll for a 22.0% fall.

The Straits Times index pared earlier losses with a gain of 0.38%. Meanwhile, the Singapore dollar depreciated by 0.17% to 1.34 against the US dollar.