Credit: Bloomberg

As inflation expectations rise and bond yields spike, Asian bonds have remained relatively resilient. We examine three factors that are helping to support the region’s fixed income markets.

The biggest story in the bond markets right now is a return of the “taper tantrum” we saw in years gone by. Although the Federal Reserve has not indicated any monetary tightening, bond yields in many developed markets have spiked on greater inflation expectations resulting from the new US$1.9 trillion ($2.5 trillion) US stimulus package. The 10- year US Treasury yield hit 1.67% on March 26, 2021 — its strongest level in over a year and almost 75 basis points (bps) higher than end-2020 levels. Ten-year UK gilts surged from 0.20% to 0.76% over the same period, while 10-year German bonds moved from –0.58% to –0.35%.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook