A monthly review and outlook of the Asian Quality Bond market.

Key highlights - as at June 2016


  • Asian credit market was in a cautious mode for a large part of June, awaiting the outcome of United Kingdom’s referendum on whether to leave the European Union (EU).
  • The uncertainty around the timing of the exit pose the biggest risk and this is widely expected to be a long drawn affair, not boding well for economic prospects and general market sentiments.
  • We increased our local currency bonds exposure via India and Indonesia government bonds as we expect US Fed’s rate hike expectations to be further pushed back as more uncertainty clouds the global economic outlook.
  • We now see little chance of a US Fed hike this year barring a sharp spike up in inflation.
  • Heading into the second half of 2016, we remain positive on Asia’s longer term fundamentals and its ability to ride through this period of uncertainty.

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