Market Roundup 7 August 2023

1) Thai stock market overview

Thailand’s SET Index closed at 1,532.51 points, increased 2.05 points or 0.13% with a trading value of 46 billion baht. The analyst stated that the Thai stock market fluctuated, falling into a negative territory in the morning session, but bounced back to more than 10pts gains in the afternoon as investors monitored the statement from the political shift. The market was boosted by the banking sector and big-cap stocks that benefited from political issues. The analyst expected the market to extend its gain tomorrow but with a limited upside.


2) Thai headline inflation rises less than expected in July, increasing by 0.38%

The annual headline inflation rate in Thailand increased less than expected in July, the Ministry of Commerce reported on Monday, thanks to reduced energy prices from a high base a year earlier.

July’s consumer price index (CPI) rose 0.38%, compared to a Reuters poll expectation of 0.64% and June’s 0.23% rise.

For the third month in a row, headline CPI fell short of the 1% to 3% range set by the Bank of Thailand.

The core CPI increased by 0.86% in July from the same period last year, which is lower than the 0.90% increase predicted by the survey and the 1.32% increase seen in June.

The commerce ministry maintained its forecast of 1% to 2% annual average headline inflation, adding that it is expected to revise its projection for this year’s price increase in September.

Poonpong Naiyanapakorn, a ministry official, told a press conference that the country’s inflation is likely to rise marginally in August due to a rise in food prices caused by drought and an increase in energy prices.


3) Cleveland Fed sees US inflation rising, prompting to continue raising rates

The Cleveland Federal Reserve is expecting the U.S. Consumer Price Index to rise in July and August, which could fuel the central bank to raise interest rates further.

The latest update of inflation forecast by the Federal Reserve of Cleveland saw U.S. inflation rising from 3.0% in June to 3.42% in July and 3.89% in August. Meanwhile, core inflation is expected to rise from 4.8% in June to 4.92% in July before edging down to 4.75% in August.

The forecast was higher than the market consensus that sees CPI rising 3.3% in July, while core CPI is seen at 4.7%.

According to CME FedWatch Tool, 86.50% of the market expects the Fed to maintain rates at 5.25-5.50% and only 13.50% believes that the Fed will raise rates by another 25 basis point in the next meeting in September.

The probability for the Fed to maintain rates in November declines to 69.1%, while 28.11% sees a quarter-percentage rate hike and 2.70% expects to go beyond with 50bps hike.