THB: USD/THB Near Recent Highs, Lower Gold, Higher US-TH Yield Diffs Supporting
May-14 03:56
USD/THB tracks in the 33.30/35 region in latest dealings, up around 0.30% from end levels on Tuesday. We remain within recent ranges for the pair, with current levels around the 20-day EMA. Further north is the 50-day EMA, close to 33.58. We haven't breached this resistance point since mid April. Earlier May lows were close to 32.60 and remain some distance away.
- The baht has underperform this recent USD pullback but the divergence is not large from an historical standpoint. Some offset is likely coming from softer gold prices, which back to mid April levels. Baht is still up in May to date, but likely elsewhere in the region, gains have been pared.
- The BoT Minutes from the April policy meeting, where it cut rates by 25bps, highlighted a fairly modest economic outlook, while 2025 and 2026 inflation is expected to be below target in headline terms. The central bank also recognized the limited policy space the BoT, which may need to be preserved for future risks.
- Market pricing is for another 25bps cut in 6 months, while US-TH yield differentials are likely to remain dictated by US Tsy yield shifts. The 2yr spread has moved back in the USDs favor in the past few weeks, now back to +244bps, fresh highs since mid last year. This is another USD/THB support point.
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JGBS: Bear-Steepener, BoJ Gov Ueda Reiterates Policy Stance
Apr-14 03:34
After the Tokyo lunch break, JGB futures are stronger, +22 compared to the settlement levels, sitting in near the middle of today’s range.
- BoJ Governor Ueda reiterated his stance that he won’t have any preconceptions over the conduct of monetary policy after uncertainties have risen due to US tariff measures. The central bank will take appropriate policy steps by carefully examining the economy and inflation, Ueda said in response to questions in parliament. (per BBG)
- Cash US tsys are 2-4bps richer, with a steepening bias, in today's Asia-Pac session after Friday's heavy session. The big news over the weekend was President Trump's exemptions on smartphones, computers, and other electronics, though this has been downplayed over the weekend as a procedural step. They will be looking at the whole electronic supply chain.
- Cash JGBs are 1-8bps cheaper across benchmarks, with a steepener curve. The benchmark 20-year yield is 3.7bps higher at 2.365% ahead of tomorrow's supply.
- The swap curve has twist-steepened, with rates are 2bps lower to 2bps higher. Swap spreads are mixed.
- The local calendar will see Industrial Production and Capacity Utilization data later.
CHINA: Exporters Get Ahead of Tariffs.
Apr-14 03:17
- China’s exports in USD terms outpaced estimates for March.
- Up in USD terms +12.4%, the result dramatically exceeded +4.6% estimates and the -3.0% February contraction.
- Of broader concern is the decline in imports, which contracted -4.3% YoY outpacing the forecast of -2.1%.
- The trade balance unsurprisingly surged to USD$102.6bn.
- The export data no doubt is inflated as exporters looked to get ahead of the tariffs now announced and March may prove to be an anomaly.
- The decline in imports speaks loudly as to the general malaise for the domestic consumer, something that is expected to predict further monetary policy easing soon.
MNI: CHINA MAR EXPORTS +12.4% Y/Y VS MEDIAN +4.4% Y/Y: CUSTOMS
Apr-14 03:11
- CHINA MAR EXPORTS +12.4% Y/Y VS MEDIAN +4.4% Y/Y: CUSTOMS
- CHINA MAR IMPORTS -4.3% Y/Y VS MEDIAN +2.1% Y/Y: CUSTOMS
- CHINA MAR TRADE SURPLUS +$102.6 BLN VS MEDIAN +$74.4 BLN
