Global bond selloff and foreign outflows push Thai 10-year yields higher
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Bank of Thailand holds rate at 1% The Bank of Thailand kept its policy rate at 1% to support the economy, with low inflation and weak SME lending. This keeps short-term yields low and signals no imminent rate hike, which supports bond prices and limits how high the 10-year yield can go.
This is the starting point for the period and sets the low-rate backdrop that anchors Thai yields.
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BOT Governor says rates can move either way The BOT Governor said the next move could be a hike or a cut, depending on data, and that low rates for too long carry risks. This keeps investors guessing but suggests no immediate tightening, which is mildly supportive for bond prices and keeps yields from spiking on policy fears.
It clarifies the policy stance and reduces the chance of a near-term rate hike, which matters for long-term yields.
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Global bond yields surge after weak US buyback A smaller-than-expected US bond buyback sent global yields soaring. Thailand's 10-year yield jumped 60 basis points to 2.29%, tracking the global move. This directly pushes TH-10Y.GB yields higher, as global yields set the reference for Thai long-term borrowing costs.
It is the main event that drove Thai 10-year yields sharply higher in this period.
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Foreign investors dump Thai bonds, outflows hit $635 million Foreign investors sold $635 million of Thai bonds in September, the most in six months, as US yields surged and rate-hike expectations grew. This selling pressure pushes Thai bond prices down and yields up, including the 10-year, as demand weakens.
It shows a concrete demand shock that directly lifts TH-10Y.GB yields.
Q3 2026
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Global bond selloff and foreign outflows push Thai 10-year yields higher
▼
Bank of Thailand holds rate at 1% The Bank of Thailand kept its policy rate at 1% to support the economy, with low inflation and weak SME lending. This keeps short-term yields low and signals no imminent rate hike, which supports bond prices and limits how high the 10-year yield can go.
This is the starting point for the period and sets the low-rate backdrop that anchors Thai yields.
▼
BOT Governor says rates can move either way The BOT Governor said the next move could be a hike or a cut, depending on data, and that low rates for too long carry risks. This keeps investors guessing but suggests no immediate tightening, which is mildly supportive for bond prices and keeps yields from spiking on policy fears.
It clarifies the policy stance and reduces the chance of a near-term rate hike, which matters for long-term yields.
▲
Global bond yields surge after weak US buyback A smaller-than-expected US bond buyback sent global yields soaring. Thailand's 10-year yield jumped 60 basis points to 2.29%, tracking the global move. This directly pushes TH-10Y.GB yields higher, as global yields set the reference for Thai long-term borrowing costs.
It is the main event that drove Thai 10-year yields sharply higher in this period.
▲
Foreign investors dump Thai bonds, outflows hit $635 million Foreign investors sold $635 million of Thai bonds in September, the most in six months, as US yields surged and rate-hike expectations grew. This selling pressure pushes Thai bond prices down and yields up, including the 10-year, as demand weakens.
It shows a concrete demand shock that directly lifts TH-10Y.GB yields.
News & notes movingTH-10Y.GB
ThailandUnited States
TH-10Y.GB▲
Foreign investors dump Thai bonds to the tune of 635 million dollars, the most in six months
Foreign investors net sold 635 million dollars of Thai bonds in September, the largest monthly outflow from the bond market since March, or the biggest in six months, amid a surge in US government bond yields and expectations of interest rate hikes that reduced the appeal of Thai debt. In the same month, foreign investors also net sold 781 million dollars of Thai equities. The selling pressure came as government bonds worldwide posted their worst quarterly performance since 2024, after oil prices hit 100 dollars a barrel. The yield spread between 10-year Thai government bonds and same-maturity US government bonds widened, with Thai bond yields sitting 298 basis points below US yields, close to a record high. Meanwhile, the baht swap market reflected expectations that Thai interest rates could rise by a total of about 42 basis points over the next 12 months, up from just 25 basis points expected at the end of August, as inflation pressure led investors to increase the weight they place on the chance that the Bank of Thailand will raise interest rates for the first time in three years.
Monica warns Thai private bonds risk failing to roll over
Analysts warn that Thailand's private bond market is facing the risk that new bond issues rolled over to repay maturing ones may fail, after Thai government bond yields rose in line with global yields. Companies with low credit ratings or no credit rating in particular may be unable to raise the full amount they seek, which could lead to more liquidity problems and defaults. The situation comes amid concerns over Thailand's economy, which is expected to grow no more than 2%, as the finance minister previously stated. Meanwhile, foreign investors have returned to selling Thai stocks more heavily. Yesterday the index fell to 1,559.01 points, down 35.29 points, on turnover of 121 billion baht. The main pressure came from bond yields above 5%, reflecting two concerns: the fiscal crisis of the US government, which must issue a massive amount of new bonds, and persistent inflation that keeps interest rates high for a long time. As a result, borrowing costs have surged across the board, with US mortgage rates jumping past 7-8%, causing households to slow consumption and businesses to slow borrowing to expand operations.
TH-10Y.GB · Monetary · Positive Thai government bond yields rose in line with global yields, with the main pressure from bond yields above 5%.
US-10Y.GB · Monetary · Positive US fiscal crisis requiring massive new bond issuance and persistent inflation keep US yields elevated, pushing the 10Y yield up.
Krungthai CIO recommends accumulating Quality Growth and North Asia tech stocks, eyes US-China summit
The investment strategy team at Krungthai Bank, or Krungthai CIO, said monetary policy uncertainty has eased after the Fed meeting and Dot Plot came in less hawkish than expected, supporting a gradual increase in exposure to risk assets. It recommends using market pullbacks to accumulate Quality Growth stocks as the core of the portfolio, and gradually building up High Beta stocks in the satellite portfolio, especially Technology and Semiconductor, which are supported by AI applications and AI compute, as well as the North Asia Technology group. It also advises diversifying risk through Healthcare, Energy and gold to cope with still-elevated bond yields and oil prices. Over the past week, the S&P 500 fell 0.1% and the Dow Jones dropped 1.7%, while the Nasdaq rose 0.7%. The 10-year US Treasury yield rose 2.9 basis points to 5%, and the 10-year Thai government bond yield fell 4.7 basis points to 2.30%. Gold rose 0.7% to around 4,379 dollars per ounce. Brent crude fell 0.7% to 103.87 dollars per barrel, while WTI rose 0.2% and remained above 100 dollars per barrel. Factors to watch this week include the meeting between US and Chinese leaders on September 24 to assess the direction of the trade truce and agreements on rare earths and AI technology, as well as Flash PMI readings for the US, Europe and major economies on September 23, and Thailand's export and import figures on September 25, 2026.
TH-10Y.GB · Monetary · Neutral Article reports the 10-year Thai government bond yield fell 4.7bp to 2.30%, a price move with no stated cause.
US-10Y.GB · Monetary · Neutral Article notes the 10-year US Treasury yield rose 2.9bp to 5% amid still-elevated bond yields, but gives no single causal driver for the move.
Bank of Thailand says Thai-US interest rate gap is not pressuring capital outflows, with net foreign inflows of 50 billion baht
The Bank of Thailand said the interest rate gap between Thailand and the United States is not creating pressure on capital flows or the baht. Surat Tanboon, a senior director at the Bank of Thailand's Monetary Policy Department, said the market has already absorbed and anticipated the interest rate gap trend, as reflected in the baht's stable movement. He also noted Japan's rate hike to 1.25%, which is not significantly far from Thailand's level, along with the Bank of Japan's 7-to-2 split decision, which was not unanimous, leading the market to reduce the weight it places on the next rate hike. The Bank of Thailand assesses that its policy rate of 1% remains appropriate for an economy recovering below its potential and unevenly, with inflation tending to rise on supply-side factors and expected to decline in 2027. External stability remains strong, with net international reserves of more than 300 billion US dollars, covering short-term external debt 2.8 times over. Since the start of 2026, capital flows have seen net inflows of about 50 billion baht into Thai assets, mainly into the stock market as well as the bond market. Although conflict in the Middle East caused some capital outflows, the outflows were relatively low compared with other countries in the region. The Bank of Thailand is therefore not concerned about capital flows.
USDTHB.FOREX · Monetary · Negative BOT says the rate gap is not pressuring the baht, which is stable with net foreign inflows of 50bn baht.
JP-10Y.GB · Monetary · Positive BOJ hiked to 1.25% with a 7-2 split, pushing JGB yields up.
TH-10Y.GB · Monetary · Neutral BOT keeps policy rate at 1% and sees inflation rising on supply factors; no clear directional signal for Thai 10Y yields.
INVX Says Surging Bond Yields Favor Life Insurers, BLA and TLI to Benefit, Recommends OUTPERFORM
InnovestX Securities (INVX) said rising bond yields in the third quarter to date will benefit life insurance companies through higher investment returns, stronger growth in endowment insurance premiums, and improved CSM and VNB. INVX maintained its OUTPERFORM rating on both BLA and TLI but prefers BLA due to its cheaper valuation and greater potential to benefit from rising bond yields. The 10-year Thai government bond yield rose 36 basis points quarter-to-date to 2.42%, in line with the rise in the 10-year US government bond yield to around 5%. BLA has an endowment insurance product proportion of about 60%, higher than TLI's roughly 45%, and is more sensitive to interest rates. In the first seven months of 2026, TLI's annualized first-year premiums fell 24% year-on-year, while BLA rose 10% year-on-year, compared with industry growth of 6% year-on-year. TLI's claims ratio fell 57 basis points year-on-year to 43.1%, and BLA's fell 563 basis points year-on-year to 50.2%. INVX expects TLI's profit to grow 11% in 2026 and 5% in 2027, while BLA is expected to grow 8% in 2026 and 6% in 2027. It forecasts a 2026 dividend of 0.69 baht per share for TLI, representing a dividend yield of 6.0%, and 1.33 baht per share for BLA, representing a dividend yield of 5.4%.
BLA.BK · Monetary · Positive Rising Thai and US bond yields lift BLA's investment returns, endowment premiums, CSM/VNB; INVX keeps OUTPERFORM and prefers BLA on cheaper valuation.
TLI.BK · Monetary · Positive Rising bond yields benefit TLI via higher investment returns and endowment growth; INVX maintains OUTPERFORM, though it prefers BLA.
TH-10Y.GB · Monetary · Positive Article notes the 10-year Thai government bond yield rose 36bp QTD to 2.42%, the yield itself rising.
US-10Y.GB · Monetary · Positive Article notes the 10-year US government bond yield rose to around 5%, the yield itself rising.
Krungthai CIO advises gradual accumulation of quality stocks, awaiting this week's FOMC meeting
The investment strategy team of Krungthai Bank, or Krungthai CIO, recommends that investors gradually accumulate quality stocks and take on risk in the short term by buying when prices pull back, while keeping some liquidity on hand to assess the interest rate outlook after this week's FOMC meeting. This comes as risk assets remain under pressure from the US 10-year bond yield, which jumped 19 bps to 4.97%, and oil prices holding above 100 dollars per barrel, with Brent and WTI crude surging 8.7% and 9.4% to 104.6 and 100.1 dollars per barrel respectively, driven by risks to oil shipments through the Strait of Hormuz. Meanwhile, the Thai 10-year bond yield rose 11 bps to 2.35%, and gold prices fell 1.8% to 4,349 dollars per ounce. Overall, most global stock markets declined, with the S&P 500 down 0.8%, the Nasdaq down 0.7%, and the Dow Jones down 1.6%, while South Korea's stock market moved in the opposite direction on the strength of memory and semiconductor shares. For investment strategy, Krungthai CIO continues to overweight equities relative to Neutral over the medium term and recommends gradually accumulating Quality Growth stocks, semiconductors, and North Asian stock markets, while diversifying risk in the Core Portfolio and using the Healthcare sector to reduce volatility in the Satellite Portfolio, as well as the energy sector to cope with persistently high oil prices. On fixed income, it recommends investing in short- to medium-duration instruments to reduce risk from bond yield volatility, while using gold to help diversify risk. If the Dot Plot from the FOMC meeting points to a year-end interest rate of 4.00–4.25%, investors can gradually increase exposure to high-risk assets, but if it sits at 4.25–4.50% or bond yields accelerate sharply, they should continue to hold liquidity and wait for the market to reprice valuations first. Key factors to watch this week include the FOMC meeting outcome on September 16, the Bank of England meeting on September 17, where rates are expected to stay at 3.75%, and the Bank of Japan meeting on September 18, where rates are expected to rise to 1.25%.
Kasikorn Research Center says global bond yields surged after US buyback fell short of expectations
Kasikorn Research Center stated that government bond yields surged worldwide after the US government announced a bond buyback plan of only 6 billion dollars, below market expectations of nearly 10 billion dollars. Dr. Kanchana Chokpaisarnsilp, research executive at Kasikorn Research Center Co., Ltd., said the impact on Thai bond yields may not yet be very clear, since Thailand's policy interest rate will remain steady at 1% for the foreseeable future. Thai 10-year bond yields rose to 2.29%, up 60 basis points; 7-year yields stood at 1.99%, up 57 basis points; 5-year yields stood at 1.69%, up 39 basis points; 3-year yields stood at 1.34%, up 16 basis points; and 2-year yields stood at 1.26%, up 12 basis points. The policy interest rate will limit short-term bond yields from rising much, but long-term bond yields such as the 10-year may surge in line with global market movements, which will in turn become a cost for businesses issuing bonds. Every borrower will face the same reference point in US bond yields, but how much more expensive borrowing becomes depends on the credit spread, with those rated poorly facing higher interest rates, posing a challenge for bond issuance in the remainder of the year.
TH-10Y.GB · Monetary · Negative Global bond yields surged after the US buyback fell short of expectations, pushing Thailand's 10-year yield up 60bp to 2.29%.
TH-5Y.GB · Monetary · Negative Thai 5-year bond yield rose 39bp to 1.69% in line with the global yield surge, though the steady 1% policy rate limits short-term rises.
Bank of Thailand Holds Rate at 1%, Says Recovery Uneven
The Monetary Policy Committee (MPC) unanimously voted to hold the policy rate at 1% per annum, stating that accommodative monetary policy along with targeted measures will support economic recovery, but it must monitor the situation in the Middle East, trade protectionist measures, and inflation risks. The MPC assessed that the Thai economy is likely to expand close to expectations, supported by the technology and AI cycle that has improved exports and private investment. However, private consumption will slow due to higher cost of living. Although government measures will temporarily boost consumption in the third quarter, it will slow in the fourth quarter and is expected to recover in 2027 as the cost of living declines. The MPC is also concerned about consumption being pressured by high living costs and household debt. Meanwhile, inflation is likely to rise temporarily due to energy prices and El Niño, but will return to low levels in the medium term.
FETCO Says 1% Interest Rate Still Appropriate, Economy and SMEs Not Ready for a Hike
The Thai Capital Market Business Federation (FETCO) stated that the policy interest rate of 1.00% remains appropriate. Although inflation has at times exceeded expectations, Thailand's economy is still recovering unevenly, and SMEs continue to face pressure from costs and credit. Mr. Paiboon Nalinthrangkurn, Chairman of FETCO, said that raising interest rates too quickly could further burden the business sector, especially SMEs that need support from monetary policy. The Monetary Policy Committee (MPC) voted on August 26, 2026, to keep the interest rate at 1.00% and assessed that the economy is still expanding at a low level. FETCO believes that for the remainder of 2026 and the first half of 2027, there is no pressure for Thailand to raise interest rates, and any consideration should distinguish between inflation driven by strong demand and that stemming from supply-side costs.
Bank of Thailand Governor: Low Economic Growth, Urgent Structural Reforms, Oversight of BNPL and Non-Bank Lenders
Mr. Veerathai Santiprabhob, Governor of the Bank of Thailand (BOT), stated at a seminar that the Thai economy is trending toward lower growth, with an expected expansion of only 2.3% this year, compared to 7% before 1997 and 5.3% after 1997. He noted that the current policy interest rate of 1.00% remains appropriate, but could be reduced by another 0.50% in the event of a shock. Meanwhile, the BOT is in the process of regulating BNPL loans, with plans to open a public hearing by the end of September and expects to issue new licenses in the fourth quarter of 2026. It is also overseeing Non-Bank lenders, which number over 3,600 entities across 24 categories, accounting for 75% of accounts and 55% of loan volume, compared to commercial banks and specialized financial institutions, which hold only 25% and 45%, respectively.
Asset Managers, Insurers, and Foreign Investors Net Buy Thai Bonds Worth 15.4 Billion Baht
Today, the Thai Bond Market Association reported that investors in the categories of asset management companies, insurance companies, and foreign investors made net purchases totaling 15,470 million baht. Asset management companies net bought 13,485 million baht, insurers net bought 1,945 million baht, and foreign investors net bought 40 million baht. Meanwhile, the total trading value for the day stood at 88,320 million baht. The yield on 5-year bonds closed at 1.7%, up 0.04%, and the yield curve shifted up by 2-5 basis points in line with US Treasuries, following higher global oil prices. In the auction results for government bonds, the LB365A series with a 10-year maturity and an issue size of 32,000 million baht achieved a yield of 2.1979%, which was 3 basis points higher than the market, with a bid-to-cover ratio of 1.13 times. For the LBA506A series with a 25-year maturity and an issue size of 8,000 million baht, the yield was 3.1726%, 4 basis points higher, with a bid-to-cover ratio of 2.26 times. Foreign investors saw a net inflow of 40 million baht, with no maturing instruments. On the external factors front, the US manufacturing PMI for August remained steady at 53.9, while the Joint Standing Committee on Commerce, Industry, and Banking revised up its forecast for Thai economic growth in 2026 to 2.1-2.5% and exports to 12-16%.
TH-10Y.GB · Monetary · Negative Yield on 10-year bonds rose 3-4 bps in auction, reflecting higher yields due to global oil prices and US Treasury moves.
TH-5Y.GB · Monetary · Negative 5-year yield closed up 0.04% to 1.7%, following US Treasuries and higher oil prices.
Krungthai CIO: US Stocks Still Have Room to Rise, Recommends Continued Investment
The investment strategy team of Krungthai Bank (KTB) or the Krungthai Chief Investment Office (CIO) stated that the US stock market still has an upward trend, with the S&P 500 rising 0.5% and the Nasdaq rising 0.8% from the previous week. This follows NVIDIA's earnings, which reflected strong demand for AI infrastructure investment and continue to support the market, rather than a full risk-on mode, as the discount rate is still likely to remain high in line with US monetary policy direction. The 10-year US Treasury yield was highly volatile before declining 1.6 basis points after the Fed Chair reiterated inflation risks. Meanwhile, the 10-year Thai bond yield rose 1.7 basis points due to Fed repricing and fiscal risk concerns. Brent and WTI crude oil prices fell more than 5% and 4%, respectively, after supply concerns in the Strait of Hormuz eased. Gold declined 3.2% due to a stronger dollar and higher bond yields. Krungthai CIO recommends a 'Stay Invested' strategy, or disciplined continuous investment, through a core portfolio, while the satellite portfolio continues to focus on US stocks and the technology sector as quality growth stocks, given clear earnings prospects and the expansion of AI monetization into cloud, software, and cybersecurity, alongside healthcare to enhance stability and diversify earnings risk. For highly volatile stocks, it recommends gradually accumulating semiconductor stocks and increasing investment in North Asian technology, including the theme of power grid infrastructure. For China A-shares, it focuses on selective investment in strategic industries, while Vietnam is suitable for tactical investment, and holding gold to diversify against geopolitical and fiscal risks in the medium to long term. Key factors to watch this week include US labor market data to assess the Fed's policy direction, Broadcom's financial results to gauge the continuity of AI investment, and US PPI/CPI inflation figures ahead of the Federal Open Market Committee (FOMC) meeting in mid-September.
Bank of Thailand Holds Rate at 1% Unanimously, Says Cut Not Worth the Risk
The Monetary Policy Committee (MPC) voted unanimously to hold the policy interest rate at 1% per annum. The MPC secretary stated that cutting rates under current economic conditions might not be worth the cost, while raising rates in a fragile economy would also be inappropriate, amid risks from trade wars and inflation. Meanwhile, Krungthai COMPASS expects the MPC to keep rates at 1% throughout the year, citing risks of accelerating core inflation and the twin deficit problem. The Kasikorn Research Center views that the MPC is likely to hold rates at 1% through 2026 to support economic recovery. SCB EIC expects the MPC to hold rates until 2027, as the economy may grow only 2.1% next year. The Bank of Thailand governor denied that the MPC is committed to keeping rates unchanged for an extended period, saying the next decision could be either a hike or a cut, depending on data and economic outlook. Meanwhile, analysts from CIMB Thai pointed out that Thailand's economic risks are very high, and if inflation declines further, the MPC could resume rate cuts next year.
Withayak Rethinks Bank of Thailand's Role, Tackles Debt and Shadow Money, Says Stability Alone Isn't Enough
Withayak Ratanakorn, Governor of the Bank of Thailand (BOT), is pushing the central bank to step beyond traditional monetary policy and take a more active role in addressing Thailand's structural economic problems, from household debt and credit access to illegal money. In his first interview with Bloomberg News since taking office in October, he said that stability alone is not sufficient. If the economy deteriorates, people become poorer, and businesses gradually close, the central bank cannot claim these issues are unrelated to its duties. Under this approach, the BOT has set four key agendas: resolving household debt and non-performing loans (NPLs), increasing access to financial services, ensuring fairness in interest rates and fees, and tackling illegal money and corruption. Over the past 10 months, the BOT has implemented 15 projects and plans to launch another 5 in the final quarter, including stricter oversight of cash-heavy gold transactions. Meanwhile, Withayak has cut the policy interest rate by a total of 0.50 percentage points, bringing the current rate to 1%, among the lowest in the world. He denied that the BOT would hold rates at this level for an extended period, stating that it depends on data and a forward-looking approach. The relationship between the BOT and the Ministry of Finance under Withayak and Finance Minister Dr. Ekniti Nitithanprapas, who have been close friends since their university days at Thammasat University, has markedly improved. However, this approach has sparked debate over how much the central bank should involve itself in structural problem-solving. Former monetary policy committee members and former BOT deputy governors have questioned whether the BOT risks overstepping its core mandate. Withayak responded via Facebook that the responsibility for maintaining stability has not changed, but the threats to stability have changed, and asked what good it would do if the BOT achieved its stability goals while the economy continued to worsen, businesses closed, and people grew poorer.
BOT Governor Rebuts Rate-Hold Speculation, Says Ready to Adjust Either Way Based on Data
Mr. Witai Rattanakorn, Governor of the Bank of Thailand (BOT), rebutted speculation that the central bank will keep the policy rate unchanged for an extended period, stating that the BOT is not committed to holding rates for any specific duration and that the next decision could be either a hike or a cut, depending mainly on economic data. In his first interview with Bloomberg News since taking office in October, Mr. Witai said there is not yet sufficient evidence to support a rate increase or cut, and future decisions will depend on inflation trends, the baht's value, and economic prospects. Meanwhile, all 23 economists surveyed by Bloomberg expect the BOT to keep the rate at 1%, with some seeing it held until the end of 2027. However, the BOT Governor noted that keeping rates low for too long carries risks, and the BOT may consider raising rates if inflation persists or the baht weakens sharply, while a new economic shock could prompt a cut. Regarding the baht, Mr. Witai said the BOT has been closely managing the foreign exchange market to reduce volatility, not to gain a trade advantage. The baht has depreciated about 4% against the US dollar since the start of the year but remains stronger than many regional peers, and has appreciated about 2% this month.
USDTHB.FOREX · Monetary · Negative BOT Governor signals possible rate hike if baht weakens sharply, but current stance is data-dependent and no immediate action; baht has depreciated 4% vs USD but appreciated 2% this month.
TH-10Y.GB · Monetary · Negative BOT Governor's comments suggest rates may stay low for longer, with no imminent hike, keeping yields subdued.
The Siam Commercial Bank's Economic Intelligence Center (SCB EIC) assesses that the Monetary Policy Committee (MPC) will maintain the policy rate at 1% throughout this year and is likely to keep it steady until 2027, as Thailand's economy is expected to grow only 2.1% next year and inflationary pressures will gradually ease. SCB EIC views that sufficiently accommodative monetary policy, coupled with targeted financial measures, will be appropriate to support the still-fragile economy. Meanwhile, rate cuts may not address the specific problems of households and SMEs facing tight financial conditions, and rate hikes are less necessary as inflation risks diminish. At its latest meeting yesterday (August 26), the MPC unanimously voted to hold the rate at 1.0%, viewing that level as accommodative and appropriate, despite headline inflation being lower than expected, but with a tendency to rise due to supply-side factors.
USDTHB.FOREX · Monetary · Neutral Thai central bank holds rate at 1%, likely supporting THB, but no clear directional signal for USD/THB.
TH-10Y.GB · Monetary · Negative Rate hold at 1% with no cuts expected until 2027 suggests stable but low yields, possibly keeping 10-year yield subdued.
SCB.BK · Monetary · Neutral SCB EIC expects MPC to hold rate at 1% until 2027, which may affect SCB X's net interest margin but is not directly discussed.
Thai Long-Dated Bonds in Demand as Low Inflation and Slowing Economy Flatten Yield Curve
Thailand's government bond yield curve is trending flatter after inflation slowed more than expected and the economy weakened, spurring buying of long-dated bonds. A Bloomberg survey expects the spread between 2-year and 10-year bond yields to narrow to about 74 basis points by year-end, from 98 basis points on Wednesday. Thai inflation in July stood at 1.95% year-on-year, down from 2.42% in June and 0.45 percentage points below economists' estimates, marking the biggest miss among Asian emerging markets. Meanwhile, Thailand's economy slowed sharply in the second quarter, further boosting demand for long-term bonds as markets assess that Thai interest rates are likely to stay low. Philip McNicholas, Asian sovereign debt strategist at Robeco, noted that Thailand's yield curve is unusually steep, making long-dated bonds attractive on a value basis and supporting the trend toward a flatter curve, especially if inflation continues to undershoot expectations. The trend could gain further support if the U.S. Treasury yield curve moves in the same direction, following Treasury Secretary Scott Bessent's announcement of a long-dated bond purchase program, which could help depress long-term U.S. yields. Citigroup strategists said Thailand's yield curve is currently steeper than that of the U.S., leaving room for further flattening, and that Thai long-dated bond auctions have seen increasing support since July. Earlier, Citigroup recommended a strategy expecting the spread between 2-year and 10-year Thai swap rates to narrow to 60 basis points from around 85 basis points currently.
SCB expects baht in 32.70-32.95 range after MPC holds rate
SCB Financial Markets assesses that the baht will move within a range of 32.70-32.95 baht per dollar today. The baht held steady after the MPC voted to keep the interest rate at 1.00%, but weakened overnight in line with the stronger US dollar index, following the core PCE inflation figures coming in at 0.2% month-on-month and 3.3% year-on-year, as expected by the market. Meanwhile, durable goods orders for July increased by 1.1%. Crude oil prices fell after reports that Iran and Oman reached a revenue-sharing agreement regarding the Strait of Hormuz, and the House of Representatives approved the 400 billion baht emergency loan decree with a vote of 285 to 141, to address the energy crisis and restructure the country.
BAY expects BOT to hold rate at 1% for several quarters
Bank of Ayudhya (BAY) revealed that the baht moved steadily near 32.72 baht per dollar after the Monetary Policy Committee (MPC) unanimously voted to keep the policy rate at 1.00% per year, as the market expected. It also assessed that the MPC will maintain the low rate for several more quarters to support still-weak domestic demand. The MPC noted that economic expansion is benefiting from the upcycle in technology and AI, but remains low and uneven, with the economy expected to grow 2.3% and 1.8% in 2026 and 2027, respectively. While exports and private investment expanded better than expected, private consumption was below expectations, and general inflation pressures in 2026 and 2027 are expected to be lower than previously assessed. BAY expects the MPC to hold the rate at 1.00% for several quarters ahead, as economic growth below potential and weak domestic demand will limit the pass-through of higher cost prices. The next MPC meeting is scheduled for October 28, 2026.
CAAT says Q2 passengers fell 25% on Middle East war and high fuel prices
The Civil Aviation Authority of Thailand reported total passenger volume in the second quarter of 2026 at 31.79 million, down 25.04% from the previous quarter, comprising 14.65 million domestic passengers and 17.13 million international passengers. Total flights came to 211,532, down 18.71%, while air cargo expanded 1.23% to 421,513.04 tonnes, supported by exports of agricultural products and fresh fruit. The conflict in the Middle East led to the suspension of 1,896 flights from Thailand to the Middle East, a loss of 637,121 seats of passenger capacity, and a 6.21% decline in Thailand-Middle East routes to 5,827 flights. Thailand-Europe routes rose 4.68% to 5,952 flights. Persistently high Jet A-1 fuel prices are pressuring airline costs. The CAAT has therefore approved an international route fuel surcharge ceiling to reflect actual costs, while instructing relevant agencies to increase the domestic air navigation service charge reduction from 25% to 30%, cut aircraft parking fees by 50%, and extend payment deadlines for landing and parking charges by one month per instalment. The CAAT confirmed it will not raise the domestic fare ceiling and will oversee passenger rights protection measures under Civil Aviation Board Regulation No. 101. Meanwhile, the Monetary Policy Committee voted unanimously to keep the policy rate at 1.00% per annum, amid a trend of headline inflation in 2026 rising to an average of 2.9% and the economy expanding by only 1.5%, risking stagflation alongside inflation.
TH-10Y.GB · Monetary · Negative Policy rate kept at 1.00% amid rising inflation and weak growth, suggesting stagflation risk which may pressure bond yields.
KTB points to long-dated bond opportunities as Fed holds rates and gold dips to $4,400
Poon Panichpibool, money and capital market strategist at Krungthai Global Markets, Krungthai Bank, said the Bank of Thailand may keep rates unchanged throughout this year and next, but Thai 10-year bond yields have fallen to 1.90% to 2.00%, a fair value zone, making them less attractive. He recommends gradually buying only when yields rise, and views Thai 20-year bonds as more interesting in terms of yield curve steepness, though investors must accept higher volatility. Meanwhile, US 10-year yields eased to 4.65% after the producer price index came in below expectations, but risk-on sentiment and Middle East uncertainty limited the decline. KTB continues to recommend gradually buying long-dated US and Thai bonds when US 10-year yields climb above 4.50%, expecting the Fed to hold rates in 2026 before cutting twice in 2027. The dollar moved sideways with no clear direction, with the DXY index hovering around 99.9 points. Gold futures for December 2026 delivery on COMEX slipped further toward $4,400 per ounce on profit-taking and Middle East uncertainty.
Thai Bond Trading Value Surges 145%, Foreign Net Buying at 9.56 Billion Baht
The trading value of Thai bonds this week rose by about 145% from the previous week to 474.315 billion baht, with net buying of 510 million baht in short-term bonds and net buying of 9.949 billion baht in long-term bonds, while bonds held by foreign investors matured worth 900 million baht, resulting in a net foreign capital inflow of 9.559 billion baht. Government bond yields fell by 1 to 3 basis points amid lower-than-expected Thai inflation and a strong US PMI index.
TH-10Y.GB · Monetary · Negative Lower-than-expected Thai inflation and strong US PMI lead to falling government bond yields, implying lower policy rates.
KTB recommends accumulating long-term US and Thai bonds, expects two Fed rate cuts in 2027
Poon Panichpibool, money and capital market strategist at Krungthai GLOBAL MARKETS, Krungthai Bank, said the US 10-year bond yield is moving around 4.68 percent, supported by risk-on sentiment and expectations of Fed rate hikes, but capped by hopes for US-Iran ceasefire talks that are pressuring energy prices. He maintained a recommendation to gradually buy long-term US and Thai bonds when the US 10-year yield rises above 4.50 percent, as the Fed is expected to hold rates in 2026 before cutting twice in 2027, in the second and fourth quarters, contrary to the latest Dot Plot and market expectations. The Bank of Thailand is likely to hold rates throughout this year and next. Meanwhile, the Thai 10-year bond yield has fallen to 1.90 to 2.00 percent, which is a fair value zone, reducing its attractiveness. He recommends buying only when yields rise, and views 20-year Thai bonds as more interesting but requiring acceptance of high volatility. On currencies, the dollar strengthened amid risk-on sentiment and better-than-expected US economic data, pushing the DXY index toward the 100 level. Gold prices remain above 4,100 dollars per ounce, pressured by a stronger dollar but supported by ceasefire hopes and buy-on-dip demand.
US-10Y.GB · Monetary · Negative Expectations of Fed rate cuts in 2027 and current yield around 4.68% suggest yields may decline, but near-term risk-on sentiment supports yields.
TH-10Y.GB · Monetary · Negative Thai 10-year yield has fallen to 1.90-2.00%, considered fair value, reducing attractiveness; yields may stay low.
USDTHB.FOREX · Monetary · Positive Dollar strengthened on risk-on sentiment and better US data, pushing DXY toward 100, implying USD strength vs THB.
GOLD · Monetary · Neutral Gold pressured by stronger dollar but supported by ceasefire hopes and buy-on-dip demand; mixed signals.
KTB.BK · Monetary · Neutral KTB strategist's bond and rate views may influence bank's investment portfolio, but no direct impact on bank's operations.
Thai bond trading value drops 63% this week to 193.585 billion baht
Thai bond trading value this week, from July 27 to 31, 2026, with three business days, stood at 193.585 billion baht, down about 63% from the previous week. Average daily trading value was 64.528 billion baht. Of this, 43%, or 83.442 billion baht, were bonds issued by the Bank of Thailand, mostly with remaining maturity of no more than six months. Government bonds accounted for 80.216 billion baht, or 41%, while corporate bonds saw trading value of 12.26 billion baht, or 6%. Government bond yields fell by 1 to 4 basis points, tracking US Treasury yields after the United States and Iran temporarily halted attacks. Foreign investment flows saw a net inflow of 10.282 billion baht, with net buying in short-term bonds of 11.745 billion baht and net selling in long-term bonds of 555 million baht.
Bank of Thailand Opens Doors to IAA for First Time in 10 Years, Discusses Economic Direction and Monetary Policy
The Bank of Thailand opened its doors to the Investment Analysts Association for the first time in a decade to discuss the economic direction and monetary policy. Governor Vitai Ratanakorn revealed that the meeting on July 30 covered macroeconomic overview, economic growth trends, inflation, and the policy interest rate direction. The Bank of Thailand signaled a more accommodative monetary policy to support economic recovery, while accelerating structural solutions, particularly household debt and adjusting the financial institution regulatory framework to be more flexible. Discussions also covered financial system stability and tackling gray capital, with the Bank of Thailand presenting ongoing plans and measures to curb illegal funds and reduce long-term impacts on the economy.
TH-10Y.GB · Monetary · Negative Bank of Thailand signals more accommodative monetary policy, implying potential rate cuts, which would lower bond yields.
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