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BofA: No FOMO This Year

ASIAN MARKETS

Bank of America write “recent stabilisation in UST yields and China growth has led to a relief rally in Asia FX and rates as the market pared down bearish Asia exposure.”

  • “The turn of events is quite similar to the same time last year on China re-opening optimism and slower US inflation.”
  • “However, the initial fear-of-missing-out (FOMO) rally in ASEAN FX and rates markets quickly fizzled out as doubts crept in about the uncertainty re: Fed policy and the strength of China’s growth impulse.”
  • “A more convincing turn in the Fed cycle and USD could drive more Asia FX appreciation next year as corporate hedging behaviour changes. But risks remain from premature dovish policy turn in ASEAN and the need for CBs to replenish FX reserves.”
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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