KSS says US Treasury buybacks push bond yields down, supporting a stronger baht

MacroDigital Finance
โดย Kaohoon·US·Read original
Summary · why it matters

Krungsri Securities Public Company Limited, or KSS, said the US Treasury is preparing to increase the size of its long-dated government bond buybacks to at least 4 billion US dollars per operation, focusing on bonds with maturities of 10 to 20 years and 20 to 30 years, starting from 9 September 2026 onwards. The measure caused the yield on 30-year US government bonds to fall by 0.07%, while the 10-year yield fell by 0.04%, alongside a weaker US dollar and a recovery in global risk assets. KSS views this bond buyback as a measure to support liquidity and manage the average maturity of debt securities rather than as quantitative easing, because the US Treasury is using short-term Treasury bill issuance as the main funding source for buying back long-term bonds. These factors pushed the dollar index down to its lowest level in one month, while the baht strengthened to trade around 32.80 to 32.90 baht per US dollar, reflecting conditions that favour foreign capital inflows into Asian and Thai equity markets. In the medium to long term, the Thai economy should also benefit from foreign direct investment flowing into the ASEAN region, supporting the investment cycle in artificial intelligence infrastructure and data centres. This should be positive for commercial banking stocks as the main funding source, without concern over non-performing loan risk among SME businesses, because this credit cycle is being driven by large corporates and the government continues to provide assistance measures for SMEs. Stocks expected to benefit directly from easing bond yields and the technology trend include Delta Electronics Thailand Public Company Limited, or DELTA; KCE Electronics Public Company Limited, or KCE; Hana Microelectronics Public Company Limited, or HANA; Gulf Development Public Company Limited, or GULF; Global Power Synergy Public Company Limited, or GPSC; WHA Utilities and Power Public Company Limited, or WHAUP; Muangthai Capital Public Company Limited, or MTC; and Krungthai Card Public Company Limited, or KTC.

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