Market Roundup
- Last week, Thai Government Bonds closed mixed and rangebound, even last Friday when volume traded surged and the baht continued to weaken. By last Friday, players were mostly trading shorter to medium tenor papers (with yields down just 1-3bps) as sentiment was guarded ahead of the weekend’s Greek talks.
- Daily traded volume of THB govvies rose to Bt3.5 billion last Friday whilst USD/THB closed at 33.785 but has weakened towards 33.879 this morning as the Greece talks broke down. Foreign investors were net buyers of a relatively small Bt981 million worth of THB bonds last week. Meantime, domestic economic conditions remained subdued, as exports dropped for the fifth consecutive months at the rate of 5%, while imports declined by near 20% in May. Also last week, the government sold Bt7.0 billion of long tenor bonds LB616A. Bid-cover was strong at 3.46 times whilst average yield was 4.1137%.
- In the short term period, we expect mild support to continue and see strong resistance for the 10-year Thai govvies at 3.20%.
- The coming week will also see cautious sentiment ahead of heavy macro indicators releases. These include trade balance and BOP numbers and the June CPI release. Continued subdued Thai economic numbers will thus maintain support for Thai govvies.
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