Asia-Pacific Rates: What a stronger dollar means for regional rates

Research evidence excerpt

Asia-Pacific Rates: What a stronger dollar means for regional rates

26 June 2026

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Asia-Pacific Rates FixedRates Income

What a stronger dollar means for regional rates

◆ Dollar strength could place additional stress on local bonds Pin Ru Tan

while inflation uncertainty lingers HeadThe Hongkongof APACandRatesShanghaiStrategyBanking Corporation Limited,

Singapore Branch

◆ China’s bond market is likely to remain relatively resilient… pin.ru.tan@hsbc.com.sg

+65 6658 8782

◆ …while India’s recent reforms have boosted its appeal to Duncan Tan

APAC Rates Strategist

high-yield investors The Hongkong and Shanghai Banking Corporation Limited,

duncan.tan@hsbc.com.sg

Asia local bonds delivered mixed performance over the past month, even with the +65 6658 7255

US-Iran memorandum of understanding inked. The Philippines and India led the way, Justin Heng

but for different reasons: classic EM spread compression for the former, and The Hongkong and Shanghai Banking Corporation Limited

idiosyncratic currency stabilisation policies for the latter. Between the two, we think justin.heng@hsbc.com.hk

+852 2288 9778

India’s outperformance is likely to be more durable, as foreign investors’ tax exemption

Soumya Mohanty, CFA

and the likelihood of index inclusion could keep a steady bid on local bonds. We add a Analyst, APAC Rates Strategy

trade idea to buy 15Y Gsec, alongside our existing preference for 30Y CGB. HSBC Securities and Capital Markets (India) Private Limited

soumya.ranjan.mohanty@hsbc.co.in

Over the last decade, Asia rates have trended neatly with the swings in inflation +91 80 6827 3548

momentum. With the sharp reversal in oil price and decline in inflation swaps, it is Chandra V R