China Bond Rally Still Has Room to Run, Ex-HKMA Manager Says

The People’s Bank of China may shift the interest-rate corridor down by 10 basis points in the second quarter if economic data continue to show softness, said Ng, who left the HKMA in 2015 and established investment firm Eastfort Asset Management Pte Ltd. “2019 should still be a mild bull market for China bonds, at least for the first half of the year given a dovish Fed, slowing onshore growth and more aggressive PBOC stance,� said Ng, who favors the nation’s five-year notes. Yields on China’s benchmark five- and 10-year notes have tumbled by almost 100 basis points over the past year as the U.S.-China trade war dent exports and factory output, spurring investors to seek havens.

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China Bond Rally Still Has Room to Run, Ex-HKMA Manager Says

Brexit triggers surprise emerging market asset rally

When British voters shocked world markets by voting to leave the European Union last week, emerging markets assets seemed among the most vulnerable to a full-on retreat to safe havens from riskier investments. MSCI's emerging equity index is set for its biggest weekly gain since March, while yields on debt denominated in emerging currencies such as rouble and the Brazilian real have fallen as much as 50 basis points over the week. “Janet Yellen has made it clear that events outside of the U.S. will have a bearing on the Fed’s decision making and she was explicit about the risk that she thought Brexit would pose,” said Viktor Szabo, Senior Investment Manager at Aberdeen Investment Management.

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Brexit triggers surprise emerging market asset rally