Dad, where've you been all these years.

One of the most important weeks of the US economic calendar is here. The Fed meets for the next couple of days and on Wednesday will announce their decision on inflation and an increase to interest rates. All expectations are that rates will increase by a quarter point, which could be the last one in the current cycle. At the same time, it's US earnings reporting season and over 120 US companies will report their second quarter earnings this week, these will tell us whether there's a recession underway or whether businesses remain resilient.

There are many variables involved here but all things being equal, rates will increase by 0.25%, which markets have already priced in and the official rhetoric will point towards no further increases being planned. The result is that USD should strengthen slightly (against THB) and depending on the form of words used, equity markets should also begin to track upwards again. That's my best case scenario, rarely however is life that simple.

A 0.50% would be a major shock that would cripple equities and cause USD to surge, there doesn't seem to be any basis for this but one never knows with the Fed. News of no rate increase would also be a surprise and cause equities to surge, USD would probably lose value but after no rate increase last month, 0% would be improbable.

It's not always the actual percentage increase that has an effect, often it's the form of words used in the Fed Chair's statements afterwards, which markets will need time to digest, understand and agree upon.

If you're like me and are more interested in what happens in equities markets than in FOREX, you'll be hoping that the outcome allows equities and pension funds to take off, they've been in the doldrums long enough.

On the Thai side of the equation:

Customs exports (as opposed to tourism) showed a monthly decline year on year but a slower decline than was forecast, -6.4% against -7.3%. Crucially, imports were down over 10% which is not a good sign in terms of economic recovery but that did mean there was a trade surplus hence it is Baht positive. The six month picture however shows an overall decline of 5.4% and a trade deficit of 6.3%.....actually, not too bad at all.

Despite a long list of risks, the ministry remains confident that the year will end in positive territory, up by 1-2% overall.....what can be said, a fella's gotta stay positive, personally, I wouldn't want to bet my year end bonus on that.

There appears to be a ministry of positive reporting at work, every little bit of good news is spun to reflect how well things are going, solely as a result of in-country efforts. Pieces of less than good news are disguised as something odd going on somewhere overseas, in another country, nothing to do with us guv and we don't know the details! Big sigh.

My old farts pension is twiddling its thumbs in Kasikorn now until Thursday. Good job my other pension was paid in yesterday

The question of how USD and equities might respond to the latest interest rate rise was/is clouded and complicated by the Japanese YEN and it's recent gain against USD. It seems there's a chance that the Japanese Central Bank may tweak their economic policies which would cause YEN to strengthen. Doing so would make Japanese exports more expensive into the US markets, hence the reaction of US equities  to the news, which occured right around the same time as the interest rate rise was announced. A complex interwoven web.

Sopha took a trip to the bank today. She said not much else was open other than the banks. 90 day Thursday and I'm tasked with paying the bills.