Contents

Trade monitor 2
Overview 4
Asian bonds to remain resilient to rising inflation, policy
rates 4
Why are Asian bonds sensitive to US Treasuries, the
Fed Funds Rate? 6
Recommended market positioning 7
Ranking Asian bond markets 8
Is Asia starting to fiscally tighten? 10
Country summary 10
Do current forward swap rates predict future spot rates? 13
Our conclusions 13
Hong Kong 17
Receive HKD IRS versus USD IRS 17
India 18
Tactical longs advised only 18
Indonesia 19
Offshore inflows, flush liquidity to support market 19
Korea 20
KTB/KRW IRS curve steepening 20
Malaysia 21
Buy 5yr MGS at 3.70% at auction 21
Singapore 22
Overweights in 5-7yr SGS advised 22
Thailand 23
2-5yr TGB curve steepened 50bp 23
China 24
CNY (ND)IRS curve to steepen 24
Taiwan 24
TWD IRS, TWGB yields have bottomed 24
Philippines 25
RPGB curve bear-steepens on deficit overshoot 25
Vietnam 25
VGB yields to rise further 25
Bond yield forecasts 26
Explanatory notes 27
Carry and rolldown 27
Value matrix 27
Rich-Cheap charts 27
Disclosure appendix 29
Disclaimer 30