Kaohoon Morning Brief – 1 March 2023

1) Thai stock market outlook

Krungsri Securities (KSS) expected the Thai stock market to move between 1,610 – 1,630 points. The analyst expected concerns regarding Fed’s aggressive move on rate hikes to combat inflation to pressure the market, especially after the US ISM Manufacturing Prices Paid Index for February rose to 51.3, and the 10-year Bond Yield was edging toward 4%. Still, the analyst expected depreciation in USD could slow down a selloff of foreign flow. Meanwhile, the market has entered an oversold territory, which could give the Thai market a bounce back.


2) German CPI for Feb rose more than expected

Inflation in Europe proved to be more persistent than expected as the German preliminary consumer price index (CPI) for February rose 0.8% on a monthly basis, compared to an increase of 0.6% expected. Meanwhile, prices also rose 8.7% from last year, compared to 8.5% expected.

Goldman Sachs earlier revised up its prediction for the European Central Bank’s next interest rate hike, expecting that the central bank would lift a rate by 50 basis points at the meeting in May. As a result, the terminal rate would peak at roughly 3.75% by June.


3) Manufacturing activities in US slowed down for fourth-straight month

The final data of the S&P Global Manufacturing PMI for the US in February 2023 was revised lower to 47.3 from an earlier data of 47.8, and compared to 46.9 in January. This showed that manufacturing activity in the U.S. continued to slow down for the fourth consecutive month while also recording contractions in output and new orders amid weak domestic and international demand. ISM data also showed a huge jump in prices paid to 51.3, compared to 46.5 expected.

Meanwhile, employment rose at the highest pace in five months as business confidence was the second-strongest since May 2022, coming in at 47.70, compared to 47.40 earlier.