Chinese government bond yields are falling at the fastest pace this year relative to U.S. Treasuries as a slowing economy curbs inflation.
China’s yuan is set to pull out of its steepest slide since 2011 in offshore trading as the nation’s $3.8 trillion of foreign reserves coupled with inflows from trade and investment deter bets on further losses.
Philippine bonds dropped, pushing yields to a four-month high, on speculation the central bank will halt interest-rate cuts on signs the economy is recovering. The peso strengthened.
China’s yuan snapped a three-day drop as the central bank boosted the daily fixing to a record before U.S. Treasury Secretary Jacob J. Lew visits this week.
The yuan traded within 0.4 percent of a two-month high as signs China’s economy is recovering were tempered by elevated oil prices.
After months spent working to erase their image as emerging markets to avoid, the Iraq crisis and its influence on oil prices are putting the fragile five currencies back on investors’ sell lists.
"We need to see what the Fed actually does in its October meeting and the market is still cautious."
- Ju Wang on Oct 17, 2014