Thailand’s SET Index closed at 1,387.62 points, increased 14.44 points or 1.05% with a trading value of 43.59 billion baht. The analyst stated that the Thai stock market increased, supported by a positive sentiment from foreign markets. The US Federal Reserve changed nothing on the dot plot, convincing the analyst that the central bank would carry out three rate cuts this year. The expectation caused the dollar to weaken, while bond yields declined to support risky assets. The Thai market was also supported by the purchase of electronic stocks.
The analyst expected the market to extend its gain tomorrow.
The US Federal Reserve on Wednesday maintained its benchmark rate at 5.25-5.5% as expected, but surprised the market by reaffirming its outlook for three rate cuts by the end of this year when economists and analysts were shifting toward only two cuts by December.
The Fed was quite optimistic about the US outlook as the Dot Plot indicated that there would be three cuts this year and three more cuts next year with a quarter percentage point of rate cut each time.
The Fed’s post-meeting statement was nearly identical to January’s as the Chairman Jerome Powell said that rate cuts will not be appropriate until officials have more confidence inflation is moving sustainably toward their 2% target.
The market is now pricing in about a 70% chance that the Fed will cut rates in June. Meanwhile, the updated forecast shows FOMC’s current projections are for rates to end 2024 between 4.50-4.75% down 0.75% from current levels. Also, the Fed is now expecting interest rates to end 2025 between 3.75-4%, which is above its December expectations of 3.5-3.75%.
Shaikh Nawaf al-Sabah, CEO of Kuwait Petroleum Corporation (KPC), stated via CNBC that the world could encounter a tanker fleet shortage if the crisis in the Red Sea carried on for another six months.
Since November 2023, the livelihood of commercial shipping companies has been a struggle, as Houthi militants attacked tankers in support of Palestinians in the link to the war in Gaza, which forced shipping fleets and tankers to turn their helms to the Cape of Good Hope and caused the cost and time for transportation to increase.
Al-Sabah elaborated that KPC followed its strategy and continued shipping through the Red Sea by picking proper routes on a daily basis, while also stating that the company was satisfied to have completed its deliveries to clients without any issues.
However, the concern was raised as he implied that not every oil producer or tanker was as well-prepared as KPC.
Meanwhile, Chevron CEO Michael Wirth stated that the tension in the Middle East was tenuous and that the situation could go in any direction. He affirmed that, with the current circumstances, Chevron would not move its ships to the Red Sea.
On Thursday, the Swiss National Bank (SNB) shocked the market by cutting its interest rate for the first time in nine years by 25 basis points to 1.50% after the country’s inflation decreased to 1.2% in February.
The move caused the Swiss franc to plunge sharply against the US dollar and hit an eight-month low against the euro.
The cut wiped out expectations from analysts polled by Reuters, which expected the central bank to hold its rates at 1.75%, while the SNB pointed out that the move would support economic activity in the country.
