Kaohoon Morning Brief – 22 May 2023

1) FSS expects SET Index to continue moving downward amid concerns over political issues

Finansia Syrus Securities (FSS) expected Thailand’s SET Index to move in a sideways to sideways-down trend on Monday with  a crucial support level at 1,500 points as the technical data pointed to a bad outlook after the index could not stand its ground above 1,520 points last week. The uncertainty in forming a coalition party still weighs on the market. The analyst recommended investors to focus on domestic plays and stocks that have individual catalysts. Accumulative point should be around 1,500 points.


2) Biden and McCarthy will continue their talks over debt ceiling on Monday

US Treasury Secretary Janet Yellen reaffirmed the crucial situation of its debt obligations, marking June 1 as the “hard deadline” for the Congress to raise the debt ceiling or risk defaulting on its obligations that could bring the global economy into crisis.

President Joe Biden and House Speaker Kevin McCarthy are expected to meet in person at the White House on Monday to resume negotiations around the debt ceiling.

McCarthy told reporters that he had a “productive” call with Biden on Sunday, and they will catch up on Monday.


3) China’s central bank keeps benchmark lending rates for nine-straight month

China on Monday maintained its benchmark lending rates in May for the ninth month, in line with market expectations, amid a weakening yuan and widening yield differentials. Economic data for China pointed to slowing down after a short-lived surge as the economy came out of zero-Covid policy.

The 1-year Loan Prime Rate (LPR) was kept at 3.65% and the 5-year LPR was kept at 4.30%.

Despite risks of capital outflow that could continue hurting the weakening yuan, some analysts expected the Chinese central bank to lower the amount of cash banks must set aside as its next policy move.