Connect with us

Banking

How higher US bond yields will impact Asia Pacific bonds

As financial markets started pricing in stronger US economic growth and inflation because of Joe Biden’s stimulus plan, US bond yields have risen, causing ripple effects across the world, including in APAC.

Boris Sullivan

Published

on

Following the rise in US bond yields in response to Joe Biden’s stimulus plan and amid higher inflation in some economies, Asia Pacific bond yields have risen significantly as well, especially in Southeast Asia, India, Hong Kong, and Australia. However, Northeast Asian bond yields have risen little.

Loading...

The prospect of stronger growth and higher interest rates in the US has led to weaker APAC currencies. But as in the US, APAC stock markets have so far generally shrugged off the prospect of higher international bond yields (domestic reasons explain the weaker equity markets in China and Hong Kong).

As financial markets started pricing in stronger US economic growth and inflation because of Joe Biden’s stimulus plan, US bond yields have risen, causing ripple effects across the world, including in APAC.

While we expect further international bond yield increases to be modest, if US rates rise more substantially, yields in Southeast Asia, India, Hong Kong, and Australia will likely feel more upward pressure than those in China and Japan, while APAC exchange rates should depreciate further.

Stronger US economic growth prospects are the underlying reason for the market developments, so most APAC stock markets may keep holding up relatively well. In some Asian emerging markets, markets could come under downward pressure if “taper tantrum” type pressures become more significant, even though better fundamentals should prevent drastic responses.

Source : Oxford Economics Research Briefing

Asean

12 Things to Know about the ASEAN Catalytic Green Finance Facility (ACGF)

The ACGF is an ASEAN Infrastructure Fund initiative managed by ADB’s Southeast Asia Department Innovation Hub. It helps Southeast Asian governments prepare and finance infrastructure projects promoting environmental sustainability and contributing to climate change goals.

Asian Development Bank

Published

on

Southeast Asia faces an infrastructure investment shortfall of more than $100 billion a year, which may have worsened amid the COVID-19 pandemic.

Loading...
(more…)

Continue Reading

Banking

Thai cabinet approves 350 billion baht Aid for COVID-hit Businesses

Thailand unveiled new measures to help small and medium COVID-hit businesses in the tourism industry hit by a liquidity crunch.

Olivier Languepin

Published

on

The Thai cabinet has approved assistance worth 350 billion baht($11 Billion) to help businesses affected by COVID-19 with soft loans and asset warehousing.

Loading...
(more…)

Continue Reading

Banking

APAC Banks to Face Portfolio Valuation Losses As Yields Rise

The latest data suggest that Fitch-rated banks in Hong Kong, India, Indonesia, Malaysia and Taiwan have the largest AFS securities portfolios, and display particular sensitivity to changes in yields.

Avatar

Published

on

Fitch Ratings-Hong Kong/Singapore-21 March 2021: A rise in yields for long-dated sovereign bonds will result in near-term losses for Asia-Pacific (APAC) banks as they recognise valuation changes on their available-for-sale (AFS) bond portfolios, but the capital impact should be manageable for most rated banks, says Fitch Ratings.

Loading...
(more…)

Continue Reading

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,960 other subscribers

Latest

Trending