Asia Bond Monitor - November 2010
The Asia Bond Monitor reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. This issue includes the results of the AsianBondsOnline bond market liquidity survey.
It’s a story of two halves. The external environment facing emerging East Asia has weakened as the United States (US) economy continues to struggle and a shadow lingers over the eurozone. The debt crisis facing several peripheral economies in Europe is a reminder of the risk overhang.
Authorities in mature economies are continuing with, and in some cases introducing more, stimulus packages to spur economic activity.
Meanwhile, emerging East Asia’s economic recovery remains buoyant. Most economies in the region have tightened monetary policy as inflationary pressures increase along with rising foreign portfolio capital inflows.
Some highlights in this issue:
- Some economies are now introducing capital controls and other administrative measures to dampen volatility and ease pressure on exchange rates.
- Total bonds outstanding in emerging East Asia’s LCY bond market reached USD5.1 trillion in 3Q10, rising 17.2% year-on-year (y-o-y) and 3.0% quarter-on-quarter (q-o-q), driven by strong growth in corporate bonds.
- The region’s LCY government bond market expanded 1.9% q-o-q in 3Q10 against 5.1% in 2Q10, reflecting a paring down of fiscal stimulus programs in 2010 and an apparent reduction in issuance by central banks and monetary authorities.
- LCY bond issuance in emerging East Asia totaled $1.02 trillion in 3Q10, growing 6.0% q-o-q, largely driven by issuance in the corporate sector.
This publication reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. It covers the 10 members of the Association of Southeast Asian Nations plus the People's Republic of China; Hong Kong, China; and the Republic of Korea.
- Emerging East Asian Local Currency
- Bond Markets: A Regional Update
- Introduction: Global and Regional Market Developments
- Bond Market Developments in the Third Quarter of 2010
- Policy and Regulatory Developments
- AsianBondsOnline Annual Bond Market Liquidity Survey
- Market Summaries