Kaohoon Morning Brief – 17 August 2023

1) KSS expects rate hike concerns to weigh on Thai stock market

Krungsri Securities (KSS) expected Thailand’s SET Index to weaken and move within the range of 1,515-1,510 points as the uncertainty of the Fed’s decision on rate hikes as inflation remained above 2% target overwhelmed the domestic catalyst of the upcoming PM vote on August 22, 2023. Moreover, concerns of economic slowdown in China also pressured the market as well.


2) Fed could hike rates further as inflation persist

Federal Reserve officials stated that more rate hikes could be necessary in the future as the central bank expressed concern on the pace of inflation.

“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” wrote the minutes from July’s meeting.

The minutes also showed that most officials were worried that the inflation fight is far from over, which could mean that they have to tighten its policy further.

The Fed hiked its policy rates in July to 5.25%-5%, the highest level in more than 22 years.


3) China says it will work to achieve 5% growth target this year

China’s Premier Li Qiang said that Beijing is working to achieve its growth target of 5% this year despite recent data that showed the economy is slowing down in the world’s second largest economy.

Beijing recorded 5.5% economic growth in the first half of this year, a 4.5% increase from the first quarter and 6.3% in the second quarter.

Li called for expanding domestic demand and boosting consumption in the country.