Kaohoon Morning Brief – 9 May 2023

1) FSS expects SET Index to slow down from high surge yesterday

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move in a sideways to sideways-up trend, slowing down from a surge in yesterday’s session in response to the previous long holiday. The market will focus on the negotiation in the U.S. to raise the debt ceiling tonight as well as the CPI and PPI reports later this week. FSS recommended investors to focus on stocks with potential earnings in 2Q23 to 2H23.


2) Markets give 31% odds for Fed to cut rates in July

Expectations for the Federal Reserve’s interest rate hike is shifting toward rate cuts this year. The market now sees a 31% chance of a rate cut in July. Meanwhile, the base case shows three 25 bps rate cuts in 2023 with the first cut to begin in September.

As for the June meeting, markets saw an 85% chance of the Fed holding rates at their current level, according to CME’s FedWatch tool.

The expectations are different from the Bank of America’s forecasts that expect no rate cut this year.


3) Oil prices rose 2% on Monday as fears of recession eased

Oil prices soared on Monday as fears over the U.S. recession eased.

The international benchmark Brent crude rose 2.19% to $76.95 a barrel, while the U.S. West Texas Intermediate (WTI) increased 2.5% to $73.12 per barrel.

The shift on Monday shed some light to oil markets that were on a 3-week losing streak, weighed by fears of a recession in the world’s largest economy.