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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
Spot USD/THB last trades +0.070 at THB31.173, testing the neckline of the double top pattern charted recently. A clean break here would open up Apr 26 high of THB31.493 & Apr 12 high of THB31.575, with bulls cognisant of the golden cross formed a few days back. Conversely, bears look for a fall through Mar 26 low of THB31.060, towards the 50-DMA at THB30.890.
- The BoT unanimously decided to leave the main policy rate unchanged at the historical low of 0.50%, looking through multiplying coronavirus cases and resultant restrictions. However, they recognised fresh risks to the current growth outlook and said GDP may rise just 1-2% Y/Y (depending on when Thailand achieves herd immunity, which will affect reopening tourism) rather than 3% projected earlier.
- Worth noting that the BoT announcement came on the heels of a decent beat in Thai Apr CPI, which registered at +3.41% Y/Y after 13 straight months of deflation. Base effect, expiry of gov't utility subsidies and pork supply shortage boosted the headline index.
- Also on Wednesday, the gov't gave a preliminary nod to a new stimulus package, which includes extensions of two cash handouts programmes by a month, which would cost THB85.5bn as well as THB140bn in spending for co-payment & e-voucher schemes. PM Prayuth said that second-phase measures will be implemented "once the outbreak is contained possibly during July-December," will cost ~THB225bn, cover north of 51mn people and generate THB473bn in the economy.
- Worth noting that the cabinet also ok'd cuts in electricity and water charges for most users during May & June, which may weigh on the coming CPI readings.
- The BoT's consumer confidence gauge comes out later today, after business sentiment index released yesterday fell to 46.0 in Apr from 50.1. Looking further afield, focus moves to Friday's update on foreign reserves.
- USD/THB 1-Month NDF trades +0.015 at THB31.154 at typing, with the 50-DMA at THB31.082 providing firm support despite the recent formation of a double top pattern. Bulls keep an eye on yesterday's peak at THB31.263.
Fig. 1: Estimated Relationship Between Vaccination Path & Economic Expansion
Source: Bank of Thailand
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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