Kaohoon Morning Brief – 1 June 2023

1) FSS expects SET Index to move within 1,520-1,545 range as market watches Senate passing debt bill

Finansia Syrus Securities (FSS) expected the SET Index to move in a sideways trend within the range of 1,520-1,545 points as the market is looking ahead to the Senate to pass the debt ceiling bills. The energy sector could be pressured by falling oil prices after the report of weaker-than-expected economic data from China, raising concerns on the demand side. The analyst recommended investors to monitor the OPEC+ meeting for directions of oil prices.


2) US Houses pass debt ceiling bill

The U.S. House of Representatives passed a bill to raise the debt limit and control government spending late Wednesday night, sending it to the Senate only days before the U.S. default deadline on Monday.

The bill was approved by a vote of 314 to 117 in the Republican-controlled House and now moves to the Democratic-controlled Senate, which must pass it and submit it to President Joe Biden before the country runs out of money to pay its bills in June.


3) Fed’s governor Jefferson leans toward a rate skip in June

The Federal Reserve Governor Philip Jefferson is leaning towards a rate hike “skip” in June, but pointing out that a decision to hold policy rate at a coming meeting should not be interpreted to mean that the central bank has reached the peak rate for this cycle. 

The statement prompted a quick reversal of market expectations for another rate hike as the U.S. central bank weighed their decisions against still strong inflation data.

He noted that skipping a rate hike would allow them to have more time to assess the economy and holding rates in June does not mean hikes are done.

The market is now pricing in just nearly 28% chance of a rate hike in June after Jefferson’s statement.