(Bloomberg) -- Emerging Asia bonds are set to benefit more than their global peers from any rally in Treasuries as the region’s debt enjoys tighter spreads...
-- Emerging Asia bonds are set to benefit more than their global peers from any rally in Treasuries as the region’s debt enjoys tighter spreads over their US counterparts.South Korean 10-year bonds offer a spread of around 100 basis points below similar-dated Treasuries, which is 2.1 standard deviations below the five-year average, according to analysis by Bloomberg .
Ten-year Treasury yields have fallen seven basis points in May, while an average of the region’s debt of the same tenure has slipped by a mean of 11 basis points, according to data compiled by Bloomberg. By comparison, Europe, Middle East and Africa’s 10-year bond yields declined by only four basis points, while Latin American notes saw a small gain.The drop in US yields, as a proxy for the dollar cost of funding, has made investments into emerging-market assets more alluring.
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