Analyst Estimates SET Index to Soar above 1,750pts from Fed’s Rate Cut and Dovish Signal!

In the first day of the FOMC meeting on July 30, 2019, investors had yet to catch a signal regarding the interest rate cut from Fed Chairman, Jerome Powell.

It is highly expected that the Fed will cut interest rate by 25 basis points today, but the crucial point will be the next move after the rate cut.

An analyst sees that if the Fed announces interest rate cut without dovish signal, SET Index would move at a range of 1,690-1,750 points. On the other hand, if the announcement of interest rate cut comes with a dovish signal of possibly 50 basis point rate cut in the future, SET Index could rise to test the resistance level at 1,750 points.

The worse case scenario would be being “patient” by affirming that the U.S. economy is still solid. In this case, the US dollars would strengthen as well as bond yield while pressuring earning yield gap. SET Index would face a huge selloff that could plummet the index to 1,650-1,690 points.