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TD Securities: Buy INR/THB


TD Securities write “the macro picture suggests more short-term pressure is likely to build on THB.”

  • “Brent crude may revisit the triple digit mark at some point which spells trouble for Thailand's current account balance given their status as a big net oil importer.”
  • “Positive carry from this trade adds to the allure (3.9% annualized implied by forwards), with INR screening as one of the highest positive carry signals among EM relative to the low-yielder nature of THB.”
  • “India's capital inflows are also picking up which should underpin INR strength while the climb in bond yields from RBI's surprise bond sale plan should help to attract further inflows from a carry perspective.”
  • “In the current global macro environment this trade should generally perform in a risk-off/rates higher environment as THB underperforms the relative stability of INR.”
  • As such, they recommend long INR/THB at THB0.4371 (via 3-month NDF, reference THB0.4330), spot target THB0.4560 (Nov'22 levels) in the next 3 months, with a stop loss set at THB0.4261 (100dma).
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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