Bloomberg — Lengthen credit duration as softer US economic data may lead the Fed to start cutting rates earlier than investors anticipated and push yields lower, according to Carinn Neo, senior portfolio manager at Paragon Capital Management Singapore.
- US yields have reached their peak and the high interest rates have started to affect the economy, Neo writes in text message
- A drop in long-end yields contributed to the outperformance in long-dated Asia credits last week. Reasons behind the decline include a more balanced Fed tone on the rates outlook which markets interpreted as dovish, benign payroll numbers with unemployment rate inching higher, and supply relief from treasury refunding
- NOTE: Asia high-grade dollar corporate debt gained 1.3% last week, best weekly return since December, according to a Bloomberg index; notes with 10-year maturities and longer gained 3.8% this month through Monday, while debt that will become due in five years or less rose 0.7%
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Credit: Bloomberg (By Harry Suhartono)