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CitiFX Retain Bullish Bias on THB Via Options

THB
  • CitiFX favour USDTHB put spreads and digitals to take advantage of a compressed risk reversals curve and a bullish bias on the THB.
  • They write that THB is down near 5%, despite 10y real rate being 40bps lower and US equities 10% higher. As a result, they maintain a bullish THB bias, with expected BoT policy cuts driving fixed income inflows, while Chinese tourism drives currency inflows.
  • They target USD/THB digital puts and put spreads as they trade at attractive levels and offer a decent risk reward on a THB rebound.

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