US inflation spells danger for Asian currency debt

摘要

How long will the good times continue to roll for Asia's domestic bond markets? Their resilience in the face of local equity market turbulence has been remarkable, as has been their ability to shake off the first rate increase from the US Federal Reserve in a decade. The long-awaited capital flight, which was supposed to be a binary function of higher US short-term interest rates, hasn't gained pace. And the credit stress implied from servicing a raft of dollar debt hasn't made much impression on corporate yield curves across Asia's domestic credit markets, even as the greenback powered ahead. China's debt mountain stares out bleakly, but the "Beijing put" remains firmly in place.