Kaohoon Morning Brief – 7 March 2023

1) KSS expects weak movement in SET Index amid outflows to US bonds

Krungsri Securities (KSS) expected Thailand’s SET Index to move between 1,600-1,615 points. However, the analyst stated that even with Wall Street closed higher yesterday, while crude oil prices rose above $80/bbl due to an estimate for tight supply and an oversold situation in the Thai market, foreign flows would continue to leave the market amid rising US 10-year bond yield and concerns over Fed’s raising rates would pressure the index to fluctuate.


2) China forecasts 5% economic growth in 2023

At the 14th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China aims to expand its economy by around 5% in 2023. The target was at the bottom range of an earlier report by Reuters citing people familiar with the matter that the government was considering an expansion target between 5-6%. Meanwhile, Beijing set its 2023 defense budget to rise by 7.2%, remaining single-digit for the 8th year.


3) Expectations for Fed’s rate cuts this year are gone

During last week, the terminal rate for the U.S. Federal Reserve’s policy rates topped 5.50% and any expectations of a rate cut in the second half of this year were gone.

Also, last week strong economic data and hawkish Fed speakers pushed 50 basis points rate-hike odds for March and May higher. The current odds for a 50bps rate hike on March 22nd had increased to 30.6%.

The market expected two more hikes after March, and rate cuts would start in February 2024 with an expected Fed Funds Rate of 4% at year-end 2024.


4) Tesla cut prices of Model S and X in US

Tesla cut the starting prices of its two priciest models; Model S and Model X in the U.S. to stoke demand.

The Tesla Model S will now start at $89,990, according to the price shown on the company’s website, representing a 5% discount from where they were priced previously. Meanwhile, the Model X will start at $99,990, dropping  the price by 9%.