USD/THB Recovers Further, Cabinet Expected To Unveiled Today

USD/THB is tracking higher in the first part of trade, last at ~35.25, down 0.45% in baht terms versus closing levels from the end of last week. Some of this reflects a resilient USD backdrop since Friday's onshore spot close. All of the key EMAs sit below current USD/THB spot levels, the nearest being the 20-day EMA at 35.01. Current spot levels are close to the mid point of the recent range, 34.835 on the downside and 35.60 on the topside.

• Near term focus remains on political developments, with new PM Srettha stating the new cabinet is expected to be submitted today. Earlier reports suggested Pheu Thai would keep the key economic ministries, with Srettha potentially the Finance Minister.
• Still, with a diverse coalition in terms of the new government, there is uncertainty around policy formation, see this link for more details.
• Elsewhere, US-TH 2yr yield differentials are back close to June highs, last around +280bps, which is likely supporting the USD at the margins.
• Local equities are looking to break higher, the SET last around 1560. Offshore investors were modest net buyers of local shares last week (+$34.4mn), but this only unwinds a small of part of the outflows seen this month (-$322.4mn).
• On the data front, things are quiet until this Thursday when IP and BoP/trade figures print for July.