Bonds in Indonesia, India and Australia are witnessing a flattening of yield curves that’s showcasing the challenges these formerly-favored markets face as dollar liquidity tightens.
While Indonesia rushed to raise interest rates to stem a rout in the rupiah, continued weakness in the currency amid an emerging-market rout deepened by the U.S.-China trade war is fanning bets for further tightening. Aberdeen Standard Investments expects the nation’s yield curve to remain flat in the near term.
