Market analysts and investors now expect the US Federal Reserve to hold the key interest rate at 4.25-4.50% at its May meeting after US President Donald Trump ordered a 90-day suspension of reciprocal tariffs.
Following Trump's announcement, the market believes there is a more than 80% chance that the Fed will hold rates, up from a 50% likelihood previously, said Asia Plus Securities (ASPS).
On Wednesday the US central bank released the minutes from its March 18-19 Federal Open Market Committee (FOMC) meeting that hinted it may hold rates steady if inflation remains high. However, if economic growth slows and unemployment rises, a rate cut could be considered, the brokerage said.
"The global markets including Thailand rebounded after the US announced a 90-day delay in implementing reciprocal tariffs," ASPS said in a research note.
However, Washington raised tariffs on Chinese imports from 104% to 125%, effective immediately, in response to China's move to hike tariffs on US imports from 34% to 84%, also effective on April 10.
The European Commission announced a three-phase tariff response for US goods, starting with a 25% duty on items such as poultry, grains, clothing and metals.
"The trade war eroded investor confidence for five straight months, dragging the Thai stock index down more than 25% as of April 9, while the Stock Exchange of Thailand's capitalisation fell below the country's GDP," noted the brokerage.
ASPS predicts countries with larger trade surpluses with nations other than the US may have a better chance in trade negotiations with the US, such as Malaysia, Indonesia, Switzerland, South Korea, Vietnam, Thailand and China.
"Thailand is still affected by US base import tariffs of 10%," noted the brokerage, adding that every 1% decrease in exports to the US is expected to lower Thailand's GDP by 0.11%.
ASPS's stock picks include: WHA Corporation (WHA), Amata Corporation (AMATA), KCE Electronics (KCE), Delta Electronics (DELTA), SCG Packaging (SCGP), Thai Oil (TOP), PTT Global Chemical (PTTGC), Airports of Thailand (AOT) and Siam Cement (SCC).
