THB: USD/THB Supported Sub 31.70, Trump To Speak To Thai/Cambodian Leaders
USD/THB tracks near 31.75 in latest dealings, up from earlier lows of 31.67. We are still up around 0.20% in THB terms so far today, amid broader USD weakness post the FOMC outcome. Higher gold prices may also be helping at the margin, although THB gains have outperformed in recent sessions. Early Sep lows were at 31.61, which could be a downside focus point for the pair, albeit one that may draw attention from the authorities. A clean break lower could see the low 31.00 region targeted, last seen in 2021. On the topside the 20-day EMA is back in the 32.10/15 region.
- News flow focus remains on renewed Thailand/Cambodia fighting, although broader financial market fallout is not evident for FX markets yet. The SET equity index is largely range bound in Dec so far. (offshore investors added to local equity holdings in the first part of this week).
- US President Trump stated he will speak to the leaders of both countries to get peace re-instated along the border area. For Thailand, economic fallout could come from slower tourism inflows (this is a seasonally strong period of inflows), or whether it impacts US-Thailand trade discussions.
- The data calendar just has FX reserves data tomorrow, then focus next week is on the BoT decision, where risks of a rate cut are seen.
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JGBS AUCTION: 30-Year JGB Auction Results
The Japanese Ministry Of Finance (MoF) sells Y 525.8bn 30-Year JGBs:
- Average Yield (%): 3.166 (prev. 3.248)
- Average Price: 100.52 (prev. 99.27)
- High Yield (%): 3.183 (prev. 3.259)
- Low price: 100.25 (prev. 99.10)
- % Allotted At High Yield (%): 8.4507 (prev. 41.4864)
- Bid/Cover: 3.1248x (prev. 3.4110x)
JGBS: Twist-Steepener At Lunch Ahead Of 30Y Auction Results
At the Tokyo lunch break, JGB futures are stronger, +8 compared to settlement levels.
- Japan Sep trade and current account balance data were stronger than forecast, particularly on the current account side. In unadjusted terms, we printed ¥4483.3bn, versus ¥2456.6bn projected and ¥3701.4bn prior. In seasonally adjust terms, we were at ¥4347.6bn for the current account, close to double the consensus projection and prior outcome. This is the best outcome for at least a few decades.
- Cash JGBs are 2.5bps cheaper to 1bp richer across benchmarks, with a steepening bias. The benchmark 30-year yield is 2.5bps higher at 3.166%, 20-25bps below its cyclical high.
- This month’s 30-year JGB auction features an outright yield 20-25bps below its cyclical high, approximately the same level as last month’s issuance.
- The 10s30s yield curve is around 15bps flatter than the previous auction and 25bps below its cycle peak at 170bps.
- On a relative value basis, the 30-year bond is at a richer valuation versus last month, based on the 20-/30-/40-year butterfly spread.
- The previous 30-year JGB auction delivered mixed results. The low price fell short of dealer expectations of 99.15. However, the cover ratio increased to 3.4110x from 3.30806x. On the other hand, the auction tail shortened significantly to 0.17 from 0.18, indicating an improvement in bidding strength.
JGBS AUCTION: 30Y Supply Faces A Similar Yield But A Flatter Curve
The Japanese Ministry of Finance (MoF) will today sell Y700bn of 30-Year JGBs. The MoF last sold 30-year debt on 7 October 2025.
- This month’s 30-year JGB auction features an outright yield 20-25bps below its cyclical high, approximately the same level as last month’s issuance.
- The 10s30s yield curve is around 15bps flatter than the previous auction and 25bps below its cycle peak at 170bps.
- On a relative value basis, the 30-year bond is at a richer valuation versus last month, based on the 20-/30-/40-year butterfly spread. Nevertheless, the 30-year is still holding some of the dramatic cheapening seen in May, which took the 30-year to its most discounted level in over 20 years.
- Investor sentiment toward longer-dated global bonds remains uncertain.
- Against this backdrop, today’s 30-year auction will serve as a real test of investor appetite. Ultra-long maturities remain a soft spot in the market, and their performance will be key in determining whether recent volatility continues.
- Results are due at 0335 BST / 1235 JT.
