Low US inflation boosts confidence of investors

Investor confidence has risen sharply this week after US September inflation came in lower than expected, fuelling optimism that the Federal Reserve may cut interest rates at its meeting later this week.

- NUNTAWUN POLKUAMDEE

According to Asia Plus Securities (ASPS), US headline inflation in September rose by only 3% year-on-year and 0.3% month-on-month, leading markets to price in a 98.3% probability of a 0.25% rate cut — a move that has further encouraged fund inflows into risk assets globally.

Sentiment also improved on signs of progress in US-China trade talks, as well asin negotiations between Thailand and Cambodia, both of which could help ease regional tensions.

Foreign investors were net buyers of Thai equities last week, totalling 7.7 billion baht, reflecting renewed confidence in emerging markets.

However, analysts warn of possible “sell-on-fact” pressure after Oct 30 if trade talks between Washington and Beijing fail to deliver further breakthroughs, especially with US President Donald Trump’stariff hearing scheduled for Nov5.

Adding to the optimism, the recent Thailand-Cambodia peace accord, observed by Trump, was signed successfully and is expected to reduce border tensions.