ASEAN Equity Strategy: From Tailwinds Back to Headwinds

研报英文原文证据摘录

ASEAN Equity Strategy: From Tailwinds Back to Headwinds

e inflation running around 3%ar, and support job gains, tightening

labor markets and sustaining consumer spending—reducing the odds of rate

cuts and challenging the Fed’s transitory narrative on inflation. Higher 1H26

inflation and a recent hawkish tilt in FOMC rhetoric have prompted a shift in

markets, which now price policy rates to rise roughly 30bp by the year-end.

JPM’s forecast is for a more gradual turn toward a Fed hike in 2027. Incoming

news has not altered our views, but the balance of risks is shifting in the

direction of an earlier hike than expected. The convergence of higher-for-

longer interest rates, safe-haven demand from geopolitical conflicts, and

structural U.S. "exceptionalism" is fueling a strong US dollar, driving the DXY

to trade above the 101 mark. A stronger USD has predominantly been

associated with weaker ASEAN equities (median 12% decline when the

broad USD strengthened by at least 5% over the past 20 years). In this

environment, countries with twin deficits and reliance on portfolio flows

would likely see a big impact on flows and investor confidence. Sectors with

USD income (materials, manufacturing exporters) should be more resilient.

• Emerging catalysts for Thai Equities. We are turning more constructive on

Thai stocks, driven by (1) strong momentum in the AI investment theme and

(2) broadening of corporate earnings growth recovery. Our US strategists

continue to remain constructive on AI infrastructure development. The

extension of capex in datacenters supports the Thai electronics sector's

earnings outlook and upside in the near term. In addition, the economy should

also see more earnings upside led by public investment and the knock-on

impact on domestic demand.