Thai Bonds Lower; 10-Year May Remain Down Pre-Auction

Thai government bonds are lower, as some interbank players are switching to BOT bonds due March 2016 following its attractive yield in the auction, says a bond dealer. Looking ahead, yields of seven and ten-year notes could continue rising in the next couple of days as players may sell ahead of the upcoming auction, she says. The MOF will tender THB10 billion bonds due March 2019 on May 30. Yields are expected to trade in a tight range for the rest of the session. Market participants are awaiting the outcome of the EU summit on Wednesday for potential trading cues. The bid/offer yield for bonds due December 2015 is at 3.48%/3.45% from 3.46%/3.44% late Monday, the June 2017 yield is at 3.58%/3.55% from 3.56%/3.54% and the December 2021 yield is at 3.76%/3.72% from 3.74%/3.70%.

Gold Higher; $1,620-$1,625/oz Resistance - Triland

Gold prices are higher in Asia, as momentum-based buying lends support to the market following sharp gains late last week. Spot gold is trading at $1,594.91 a troy ounce, up $2.81 from its previous settlement and 4.4% up from last week's low. In a report, Triland Metals says gold faces major resistance between $1,620/oz and $1,625/oz. "Technically the action of the last two days (Thursday and Friday) has been positive, but in the bigger picture the market remains below the $1,600-$1,625/oz zone and this is bearish." Near-term support is between $1,520/oz and $1,525/oz, it says. A softer USD is helping bolster prices Monday, but lackluster Indian and Chinese physical demand could damp gold's upside in Asian trading hours.

USD/THB Down On Short-Covering; Support At 31.32

The USD/THB is slightly lower as investors take cues from the EUR's rebound against the greenback amid very thin early trade. The pair is at 31.31-31.33, easing from 31.36 late Friday in Asia. "Players are covering short positions on risk-sensitive assets including the Thai baht," says a dealer at a local bank. While risk appetite is improving somewhat it remains relatively weak and that will likely cap the pair's downside, he adds. Wednesday's EU leaders summit will be in focus for potential trading cues. Support is tipped at 31.32, with resistance at 31.37.