Robin Marshall, MA, MPhil
Head of FICC Research
Monthly report
Modest inflation & low G7 correlation help EM Asia bonds
Key highlights:
- Evidence of a more modest inflation shock in 2026 has reduced expectations for EM Asia (ex China) policy rates in 2026-27, dampening the yield impact.
- Yields declined in Philippines and Indonesia in August, helped by lower inflation and weaker Q2 Philippines growth.
- EM Asia (ex China) govt bond markets benefit from low correlation to US Treasuries…
- …. given difficult backdrop of rising G7 yields continues, and higher term premia.
- Malaysian and Indian yield curves remain most stable, reflecting unchanged rates and policy regimes.
- Spotlight on India – lower food weighting may reduce monsoon impact on CPI. Very low foreign ownership of Indian govt. debt has potential to increase further after June measures.
Published monthly by FTSE Russell FICC Research, this report:
- Covers key developments in government bond markets across India, Indonesia, Malaysia, the Philippines and Thailand
- Assesses macroeconomic and policy developments in each country and globally, and their implications for local bond markets
- Includes analysis of yield curve movements and spreads
- Presents performance returns and yield movements using FTSE Russell indices
- Features a rotating monthly spotlight on one of the five economies
