Interest rates in Asia (excluding Japan) still need to be cautious, pay attention to inflation data and central bank meetings, and avoid chasing momentum (Nomura)
Nomura released an interest rate strategy report for Asia (excluding Japan).
Nomura released an interest rate strategy report for Asia (excluding Japan). The core view is that it is still necessary to remain cautious and avoid excessive pursuit of market momentum. Specific strategies: specific interest rate swap operation directions and confidence levels are given for the Korean, Taiwan, Indian, and Thai markets. Key focus: monetary policy meetings of various countries, inflation data, and market pricing deviations. The report does not give clear suggestions for chasing long and short positions, but emphasizes that the current risks outweigh the opportunities. There is already optimism in the market for Asian interest rate bonds to “chasing the market” (affected by expectations of a fall in global interest rates). However, Nomura believes that the uncertainty of central banks (especially the inflationary pressures in South Korea and Taiwan) and high interest rate sensitivity make the current long position too crowded and prone to reverse fluctuations. One sentence conclusion: The biggest risk in the interest rate market in Asia (excluding Japan) is not misjudgment of direction, but chasing the rise and killing the fall - what is needed now is not action, but waiting. Good/bad: There is no clear positive sector for the overall market. It will reduce market risk appetite and make investors more inclined to hold cash or short-term assets. Price in situation: "Chasing volume" transactions have been priced in a considerable degree of congestion, and reversal risks may be triggered at any time. Catalysts: 1) Key CPI data from South Korea and Taiwan and central bank meeting resolutions; 2) Whether India’s inflation data exceeds expectations; 3) The transmission of expected changes in the Fed’s interest rate path to Asian interest rates.