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Yield Curves Flatten in Asia as Dollar Liquidity Tightens

  • Elevated money-market rates cause Australia’s curve to flatten
  • Indonesia and India are tightening their monetary policies
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Bonds in Indonesia, India and Australia are witnessing a flattening of yield curves. Kathleen Hays reports.(Source: Bloomberg)
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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.