Baht Goes Offered, Energy Ministry Considers Cap On Refinery Margins

Spot USD/THB trades +0.150 at THB34.635 amid broader aversion to take risk. The rate is narrowing in on THB34.682, which limited gains on May 18. A clean break here would bring May 13 high of THB34.783 into play. Bears need a fall through Jun 6 low of THB34.300 before setting their sights on May 30 low/May 5 low/round figure of THB34.048/34.018/34.000.

• The Energy Ministry is considering imposing a cap on the price of oil sold by domestic refiners in a bid to curb inflation. A panel within the ministry is working on ways to reduce refinery margins, which have risen to THB5/litre recently from the usual average of THB2/litre.
• Note that Thailand's CPI inflation accelerated in May to its fastest pace in almost 14 years and rising energy prices were one of the main drivers.
• The opposition is preparing to file a no-confidence motion against PM Prayuth and nine of his ministers next Wednesday. A source told the Bangkok Post that this will be the last no-confidence debate before the government's term expires in March 2023.
• Thailand's data docket will be very thin in the coming days, with little outside of regular updates on BoT foreign reserves coming up.