60 seconds with Rajeev de Mello: Asian bond boost from falling inflation

Rajeev De Mello, Head of Asian Fixed Income, looks at how falling inflation and a strong US dollar are impacting Asian bonds and currencies.

19 May 2015

Rajeev De Mello

Rajeev De Mello

Head of Asian Fixed Income

Falling inflation boosts Asian bond outlook

Our outlook for Asia in 2015 is one where generally bonds yields will continue to fall, so bond returns are going to be positive.

Inflation is going to be much lower, due to falling oil prices. That is positive for bonds because declining inflation usually leads to central bankers cutting interest rates.

Indeed, if we look at countries like India we have seen inflation rates reach levels that we haven't seen in decades.

Asian currencies resilient to dollar strength

There is concern on the currency side about the strengthening US dollar.

Generally Asian currencies have done well despite this, and in euro or sterling terms Asian currencies look interesting.