Home Economy News Asian bonds draw hefty inflows on US rate cut hopes, strong exports

Asian bonds draw hefty inflows on US rate cut hopes, strong exports


Asian bonds draw hefty inflows on US rate cut hopes, strong exports By Reuters

Breaking News



Published Mar 20, 2024 01:30AM ET
Updated Mar 20, 2024 01:40AM ET

© Reuters. FILE PHOTO: People walk on a pedestrian bridge at the central business district (CBD) during morning rush hour, ahead of the opening of the National People’s Congress (NPC), in Beijing, China, February 29, 2024. REUTERS/Florence Lo/File Photo

(Reuters) – Asian bonds attracted their largest monthly inflow in three months in February, helped by expectations that the U.S. Federal Reserve would cut rates later this year, and also boosted by the region’s strong exports.

Foreign investors accumulated a net $4.41 billion of bonds in India, South Korea, Malaysia, Indonesia and Thailand last month, marking their fourth successive month of net buying, data from regulatory authorities and bond market associations showed.

Demand for Indian bonds soared with a net investment of $2.7 billion, the highest monthly figure since July 2017, buoyed by their impending inclusion in JP Morgan’s emerging market debt index.

“Rupee sovereign bonds are poised for further gains on strong foreign inflows, largely frontrunning the upcoming bond index inclusion,” Radhika Rao, a senior economist at DBS Bank said in a note.

“JP Morgan is due to start the inclusion by June 2024, and extend over 10 months, with 1% increments on its index weighting, till it likely reaches 10%,” she said.

South Korean bonds attracted a significant $2.59 billion in February, their largest inflow in nine months, bolstered by a surge in exports, especially in the semiconductor industry, which is anticipated to drive economic growth this year.

Thai, Malaysian and Indonesian bonds witnessed foreign outflows of about $532 million, $249 million and $100 million, respectively, on a net basis last month.

U.S. central bankers, unlikely to cut borrowing costs this week, might reveal new economic projections that potentially indicate a more gradual approach to interest rate cuts and a later initiation of policy easing than previously forecasted.

“We expect prospects of Fed easing, Asia’s improving export outlook and favourable growth-inflation mix will attract inflows into the region,” Khoon Goh, head of Asia Research at ANZ, said.

Asian bonds draw hefty inflows on US rate cut hopes, strong exports

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2024 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News