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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
THB
USD/THB continues to track lower, the pair last in the 33.50/55 region. This is 0.40% firmer in baht terms and levels last seen in Feb 2023. The pair hit a trough in early 2023 just under 32.60. Baht is up nearly 1% for the past week, the best EM Asia performer in the past week.
- Local equities are rallying at the open, up over 1%. This follows yesterday's 2.84% gain for the SET. We are more than 10% above recent August lows. Yesterday offshore investors added $222.6mn to local equity markets yesterday. This was the best day of inflows since end 2022.
- Bloomberg notes a smooth political transition and hopes of fiscal stimulus have buoyed equity market sentiment. Severe underperformance relative to other markets in the past 12 months may also be driving allocation shifts.
- In any event there has clearly been some positive over to THB FX. Bond inflows have also been positive September to date.
- Official rhetoric around excessive THB gains will be a watch point, with the NEER back to early 2023 highs. The 20-day EMA on USD/THB is back at 34.44.
- The near term watch point for USD/THB will also be US NFP. Baht correlations have been around 58% with the US real 10yr yield over the past 6 months or so. USD/THB has been nicely correlated with the downshift in US-TH yield differentials in recent months, see the chart below.
Fig 1: USD/THB Versus US-TH 2yr Government Bond Yield Spread
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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