Fixed Income

 

August 2017

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields ended largely unchanged in July following soft US inflation print, dovish comments from the Federal Reserve and expectations of an autumn policy shift from the European Central Bank. Overall, 10-year UST yields ended the month at 2.30%, about 0.9 basis points (bps) lower compared to the previous month.


July 2017

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields were range-bound for the most part of June, before surging in the last few days of the month. The US Federal Reserve (Fed) raised interest rates by 25 basis points (bps), despite soft inflation data. Overall, 10-year UST yields ended the month at 2.30%, about 10 bps higher compared to the previous month.


June 2017

Asian Fixed Income Monthly Outlook

Better-than-expected US non-farm payroll figures and a more favourable FOMC statement were offset by political uncertainties in Washington. FBI director James Comey's firing and investigations into possible ties between Trump's election campaign and Russia increased concerns of a set-back in the president's economic agenda. 10-year UST yields ended the month at 2.20%, about 8 basis points (bps) lower compared to end-April levels.

Global Fixed Income & Credit Monthly Outlook

The European Central Bank (ECB) has taken its first step towards reducing its stimulus programme by omitting the mention of "lower levels" for interest rates in its forward guidance, even as ECB President Mario Draghi denied that there was any discussion of tapering in the latest policy session.

Asia High Grade Credit

Asia Credit is significant enough as an asset class to be considered separately, and its high grade segment could be a relative safe haven if EMD flows reverse.


May 2017

Asian Fixed Income Note: Indonesia's Investment Grade rating upgrade by S&P

On 19 May 2017, S&P upgraded Indonesia’ sovereign rating to BBB- with a stable outlook from BB+ with a positive outlook. In the longer term, the market is expecting that this rating upgrade will result in inflows of as much as USD 5bn into the bond market, particularly from Japanese investors who require a full investment grade rating from the three rating agencies.

Asian Fixed Income Monthly Outlook

10-year US Treasury (UST) yields ended the month at 2.28%, about 11 basis points (bps) lower compared to end-March levels. Mixed economic data and rising geopolitical tensions drove sentiment over the month. Towards the month-end, market sentiment improved after pro-euro French presidential candidate Emmanuel Macron secured the most number of votes in the first round of elections.


April 2017

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields rose in the first half of the month buoyed by hawkish comments from the Federal Reserve (Fed), a solid US jobs report and possible scale back of quantitative easing (QE) by the European Central Bank (ECB). While the Fed raised short-term interest rates, as expected, the absence of a more hawkish tone from the central bank triggered a drop in UST yields.


March 2017

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields traded in a tight range in February. Risk assets rallied and UST yields rose in the first half of the month, on the back of the prospect of tax cuts and a Dodd-Frank overhaul in the US. Subsequently, yields were pressured lower by concerns about a possible victory by Marine Le Pen in France’s presidential elections. Overall, the 2-year and 10-year points on the UST curve ended the month about 6 basis points (bps) higher and 6bps lower respectively.


February 2017

Asian Fixed Income Monthly Outlook

US Treasury (UST) yields ended higher in January as weaker-than-expected payroll data led markets to moderate their forecasts for Federal Reserve (Fed) rate hikes in 2017. Overall, 2-year and 10-year UST yields rose about 2 and 1 basis points (bps) respectively in the month.


January 2017

Global Fixed Income & Credit Monthly Outlook

Credit markets are expected to have another positive year. We expect economic growth in Asia to be stable but see some potential downside risks. In Europe, political risk remains high for 2017. Some of our key themes are: hybrid bonds, financials, oil/emerging markets and High Yield.

Asian Credit Outlook 2017

Economic growth in Asia is expected to remain broadly stable in 2017. While there will be greater external uncertainties as well as country-specific challenges, Asian economies are, on balance, better equipped to deal with external pressures compared to a few years back.

Asian Fixed Income Monthly Outlook

USTs weakened further in December, as caution prevailed following the November sell-off. As widely expected, the US Federal Reserve (Fed) raised interest rates by 25 basis points (bps). 10-year UST yields ended the month at 2.44%, about 6 basis points (bps) higher compared to end-November levels.


December 2016

Global Fixed Income and Credit Outlook 2017

We are currently in a position where we are facing more questions than answers regarding Trump's policy stance as he comes into office and how it will affect the market.

Asian Fixed Income Monthly Outlook

UST yields surged in the month as Trump's election victory prompted expectations of a significant fiscal package and possible upside inflation risk under the new administration.


November 2016

Global Fixed Income and Credit Outlook

October was another difficult month for Global credit markets, in particular for Investment Grade bonds. By contrast, more risky High Yield bonds outperformed. In terms of sector results, financial issuers outperformed.

Asian Fixed Income Monthly Outlook

USTs ended lower in October. Better US economic data and a hawkish statement from the Federal Open Market Committee (FOMC) bolstered expectations of a December interest rate hike. 10-year UST yields rose about 23 basis points (bps) to 1.83%.


October 2016

Asian Fixed Income Monthly Outlook

USTs ended September mixed. While the Federal Reserve left interest rates unchanged and the Bank of Japan reinforced commitment to monetary easing, the ECB's lack of new stimulus disappointed the market.


September 2016

Global Fixed Income and Credit Outlook

Central bank policy from the US, Japan and Europe are strongly affecting the current global fixed income markets. New Zealand and Canadian economies also face continued pressure. We maintain the view that there is a positive environment for emerging markets, but have moved slightly more cautious.

Asian Fixed Income Monthly Outlook

On the back of expectations that the Fed will keep interest rates on hold in the next months, the global search for yield is likely to support demand for Indian, Malaysian and Indonesian bonds.


August 2016

Global Fixed Income and Credit Outlook

In developed markets, global bonds have benefited from recent flows out of Japan into positive-yielding markets. We maintain the view that there is a positive environment for emerging markets.

Asian Fixed Income Monthly Outlook

July saw US Treasury yields ending in mixed trading. Yields of shorter maturities climbed, while those of longer maturities fell. Plus updates on Malaysia, Singapore, India, South Korea, Thailand, Indonesia, and others.


July 2016

Global Fixed Income and Credit Outlook

The major consideration for markets in June was the Brexit vote in the UK. Although we are sceptical about the most pessimistic scenarios for the UK, there will be some negative impact on growth.

Asian Fixed Income Monthly Outlook

We expect the impact of Britain’s exit from the EU on Asia’s economic activity to be relatively muted, as the region has comparatively low trade links with the UK. Plus updates on US Treasuries, Singapore, India, South Korea, Thailand, Indonesia, and others.


June 2016

Brexit - Asian Fixed Income Update

The immediate fallout from the Brexit win has been a strong flight to safety.

Asian Fixed Income Monthly Outlook

US Treasury yields remained largely unchanged in May. The impact of a disappointing US payroll figure was offset by the release of the US Federal Reserve’s April meeting minutes, which revealed that most policymakers favoured a rate hike in June should the US economy continue to improve.

Global Fixed Income and Credit Outlook

Continued easy monetary policy in Europe and Japan will be supportive for global interest rates, but the case for further limited rate hikes in the US remains in place for 2016.


May 2016

Asian Fixed Income Monthly Outlook

Yields of USTs climbed steadily for the most part in the month. Hopes of stabilization in the Chinese economy, due to recent economic numbers printing better than expected, underpinned demand for riskier assets.