HALISTER1: Asian Yields Unlikely to Sustain Steepening Bias, StanChart Says

Asian Yields Unlikely to Sustain Steepening Bias, StanChart Says

(Bloomberg) -- Although the bear-steepening in developed market yield curves has spilled over to Asian bond markets, inflation in Asia remains subdued and real-policy rates are positive, Nagaraj Kulkarni, senior Asia rates strategist at Standard Chartered says.
  • “So, do not expect a sustained steepening of curves as yet,” Kulkarni says
  • Countries with high foreign holdings of their local currency debt are susceptible to higher U.S. yields
  • However, a broad improvement has been seen in the region’s current accounts and fiscal balances since taper-tantrum; thus, any weakness may be limited
  • NOTE: Fed chair Yellen spoke about letting the economy run “hot” on Friday, while vice chairman Fischer yesterday warned of risks to that approach
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Nagaraj Kulkarni (Standard Chartered PLC)

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