Spending Boom Means Southeast Asia Yield Curves Will Get Steeper
- Indonesia two-10 spread has reached widest in almost a decade
- Curves also steeper in Thailand, Malaysia but not Philippines
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Asian governments are turning on the stimulus taps to help counter the ravages of the coronavirus. While the current economic benefits are obvious, there may be a price to pay down the road.
Take Indonesia, where the difference between yields on two-year and 10-year securities is the widest in almost a decade, the starkest indication in the region that markets have been pricing in the longer-term ramifications of a surge in government spending. The trend is similar in Thailand and Malaysia.