Thai Bonds, Baht Rise This Week as China Slowdown Concern Eases

Thailand’s 10-year government bonds snapped a three-week decline and the baht rose as data from China eased concern Asia’s largest economy is slowing.

The 10-year yield fell to the lowest level in more than a week and the baht rebounded from the weakest in a month as China, Thailand’s biggest export market, yesterday reported overseas shipments rose 5.1 percent in July, after a 3.1 percent drop in June. Thailand’s parliament passed the first reading of an amnesty bill yesterday for political prisoners and those facing charges related to government protests after a 2006 coup that toppled then-prime minister Thaksin Shinawatra.

“China’s data lifted sentiment in the market,” said Pareena Phuangsiri, a Bangkok-based analyst at Kasikornbank Pcl. “The fact that there’s no intensity in the political situation so far also gave a short-term boost, but investors will still be cautious about the situation.”

The yield on the 3.625 percent sovereign bonds due June 2023 dropped 10 basis points this week to 3.93 percent as of 9:30 a.m. in Bangkok, according to data compiled by Bloomberg. The rate, little changed today, was at its lowest level since July 29.

The baht advanced 0.1 percent for the five days from Aug 2. and for today to 31.23 per dollar, according to data compiled by Bloomberg. It touched 31.49 on Aug. 7, the weakest level since July 8. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, declined five basis points, or 0.05 percentage point, to 6.2 percent today, erasing this week’s rally.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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