Kaohoon Morning Brief – 10 August 2023

1) FSS expects energy sector to support SET Index following a rise in oil and gas prices

Finansia Syrus Securities (FSS) expects Thailand’s SET Index to move in a sideways trend within the range of 1,520-1,540 points, seeing the energy sector still supporting the market, following an increase in oil and gas prices. The market is looking ahead to the release of U.S. inflation data for July with an expectation for a core CPI to increase 0.2% MoM and 4.8% YoY. If the reading comes in line or better than expected, it could post a positive sentiment to risk assets and the possibility for the Fed to hold rates in the next meeting.


2) China slams US on new order that limits tech investment of American companies

The tension between China and the U.S. flared up again as Beijing slammed President Joe Biden’s executive order that limits the investment of U.S. tech firms overseas.

The Chinese Commerce Ministry immediately made a strong response after the U.S. President signed the order to clamp down investment in China, specifically in the technology sector including semiconductors, quantum computing and certain artificial intelligence capabilities.

The extent of this executive order also covers Hong Kong and Macao.

Beijing stopped short of announcing a retaliation, but warned that it has the right to do so.


3) US headline inflation may come in hotter than expected

The market is expecting US consumer prices to rise 0.2% MoM and 4.8% YoY for July. However, the headline inflation may come in hotter than expected as energy prices edged higher in recent weeks.

Putting the energy prices aside, the market is focusing on shelter data, which is the largest component of core inflation as the housing market is heating up again, while rentals are also showing an uptick.

Currently, the cost of buying a house now is $2,700/month on average, a significant jump by 86% in three years. Renting a house now costs $1,850/month on average, up 25% in three years.