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AUSSIE 3-YEAR TECHS

(Z1) Off Recent Highs

US 10YR FUTURE TECHS

(Z1)‌‌ Support Appears Exposed

US TSY OPTIONS

BLOCK, 10Y Put Sale

Playing Straight Baht

THB

Spot USD/THB trades at THB30.23 at typing, just above neutral levels, with nothing to shock in the latest MonPol decision from the BoT.

  • The rate approached the 23.6% recovery of the Jul 20 - Dec 18 slide at THB30.25, which provides the initial layer of resistance. A clean break here would turn focus to Nov 24 high of THB30.43. Bears need a retreat under Dec 18 low of THB29.76 to regain control.
  • Thailand's central bank left its main interest rate unchanged at 0.50%, in line with consensus. The rationale behind the unanimous stand-pat decision was familiar, the MPC argued that it wanted to "preserve the limited policy space in order to act at the appropriate and most effective timing."
  • Following earlier hints to that effect, the BoT forecast a flatter growth profile, as it saw this year's GDP contraction at -6.6% Y/Y (prev. -7.8%) and projected next year's growth to be +3.2% Y/Y (prev. +3.6%).
  • Although the MPC communicated a sense of discomfort with THB strength (as outlined in our preview), it stopped short of announcing fresh measures to reign in currency appreciation. At the same time, the MPC noted that it may consider if further steps on the baht are needed.
  • Elsewhere, the BoT said it will allow SMEs hit by the Covid-19 pandemic to borrow from the soft loan package twice rather than once.
  • PM Prayuth will chair a meeting on Covid-19 situation in Samut Sakhon at the bottom of the hour and may announce further measures to curb the spread of infections.
  • Thailand releases its weekly update on foreign reserves on Friday.
MNI London Bureau | +44 203-865-3806 | krzysztof.kruk@marketnews.com