Kaohoon Morning Brief – 6 July 2023

1) KSS expects Fed signalling for more hikes will pressure the SET Index 

Krungsri Securities (KSS) expected Thailand’s SET Index to move between 1,500-1,520 points. Even with the positive sentiment from Saudi Arabia’s production cut and Russia’s exports curb, the Fed’s minutes that signalled for further rate hike to slow down inflation would weigh the market down, resulting in an outflow, which is negative to the equity market.


2) Fed expects to continue hiking rates to bring down inflation to target range

The U.S. Federal Reserve still believe that further tightening is necessary after decided to pause its hike cycle in June’s meeting to buy some time to assess the impact of its continuous rate hikes to the economy. 

Minutes from June’s meeting released Wednesday showed that most officials indicated that further tightening is likely. Some participants also wanted to move forward with rate hike even in June, citing that the progress of slowing down inflation was too slow in getting to a target range of 2%. Meanwhile, core inflation had not shown sustained easing since the beginning of this year. GDP would be subdued over the rest of 2023.

Fed’s officials still see mild recession later this year, followed by moderately paced recovery.

Fed’s terminal rate is unchanged at 5.4% after the release of FOMC minutes.


3) Meta will officially launch its text-based Threads today

Meta will officially release the “Threads” app on Thursday 7 ET time. A text-based Threads has been seen as the competitor to Twitter. 

“Threads is where communities come together to discuss everything from the topics you care about today to what’ll be trending tomorrow,” wrote the app description on App Store.