Bonds gain, baht steady
- Published: 24 Oct 2013 at 10.46
- Online news:
Government bonds rose, pushing the 10-year yield to the lowest level in three months, as the central bank prepares to cut its economic forecasts. The baht was little changed.
The economy may grow 3.5% to 4% this year and 4% to 5% in 2014, Moody's Investors Service said in an Oct 22 note.
The Bank of Thailand (BOT) will announce its revised forecasts for gross domestic product and exports tomorrow, the monetary authority said on Oct 16. Manufacturing in China, Thailand's biggest export market, expanded more than anticipated this month, according to a preliminary reading from HSBC Holdings Plc and Markit Economics on Thursday.
"The market is a bit wary before the BOT announcement, even though we got positive PMI data in China," said Nalin Chutchotitham, a Bangkok-based analyst at Kasikornbank Pcl.
The yield on the 3.625% bonds due June 2023 fell three basis points, or 0.03 percentage point, to 3.808% as of 9.15am in Bangkok, data compiled by Bloomberg show. That is the same level reached on Oct 18, which was the lowest since July 23.
The country does not have a cash shortage and the central bank is absorbing about 600 billion baht (US$19.2 billion) of excess cash from the overnight market, BOT Governor Prasarn Trairatvorakul said on Tuesday. A recovery in export markets may support growth in 2014, Moody's said. China bought 11% of Thai shipments in the first half of 2013, government data showed.
The baht traded at 31.167 per dollar in Bangkok versus 31.151 on Oct 22, according to local prices compiled by Bloomberg. Financial markets were closed on Wednesday for a holiday.
One-month implied volatility, a measure of expected moves in exchange rates used to price options, dropped 11 basis point1, or 0.11 percentage point, to 6.36% from Oct 22.