CIMB THB Weekly Fixed Income Commentary for 08 May 2015

Attached is the weekly market highlights for May 08, 2015:

Market Roundup

• A week after the surprise BoT rate cut to spur the Thai economy, THB weakened against the USD to hover around 33.558 today from below 32.600 before the MPC meeting. The weak THB and as UST yields rose last week (before the NFP release) lifted THB govvies yields and IRS rates. And as govvies yields rose more than IRS, bond-swap spreads closed unchanged to wider.
• However, losses were pared last Friday due to domestic support (continued safe haven flows) but foreigners remained net sellers (to the tune of Bt14.7 billion last week). We don’t anticipate any correction in swap rates yet this week whilst we see UST yields to hover at higher levels.