The Global Fund believes that if the 10-year US Treasury yield rises to 5%, it will trigger an outflow of capital from Asian emerging market bonds. Higher US interest rates will encourage investors to prefer dollar assets and reduce their holdings of Asian regional bonds. Most Asian benchmark bonds yield lower than US Treasury bonds. Against the backdrop of a widening US fiscal deficit and corporate boosting US bond yields, Asian local currency bonds are at risk of a major impact. If the US 10-year yield rapidly approaches 5%, it will challenge the bullish view of emerging markets. Investors may withdraw their capital and return to the domestic market.
Zhitongcaijing · 2d ago
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The Global Fund believes that if the 10-year US Treasury yield rises to 5%, it will trigger an outflow of capital from Asian emerging market bonds. Higher US interest rates will encourage investors to prefer dollar assets and reduce their holdings of Asian regional bonds. Most Asian benchmark bonds yield lower than US Treasury bonds. Against the backdrop of a widening US fiscal deficit and corporate boosting US bond yields, Asian local currency bonds are at risk of a major impact. If the US 10-year yield rapidly approaches 5%, it will challenge the bullish view of emerging markets. Investors may withdraw their capital and return to the domestic market.
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