Asian Development Bank – Asia Bond Monitor, Nov 2024

Financial conditions in emerging East Asia slightly weakened from September to October due to uncertainty surrounding the US Federal Reserve's monetary easing path and the US elections. While short-term sovereign bond yields decreased in some regional markets following policy rate cuts, 10-year sovereign bond yields rose in most markets. Key financial indicators in regional markets also slightly weakened, with currencies depreciating and risk premiums increasing. Regional equity markets, excluding the People's Republic of China, saw gains during the review period, particularly in response to stimulus measures. However, both equity and bond markets recorded net portfolio outflows. Risks to regional financial conditions remain balanced, with uncertainties surrounding the Federal Reserve's monetary policy and potential policy adjustments by the new US administration posing downside risks. Other risks include weaker economic growth in the PRC, geopolitical tensions, trade disputes, and extreme weather events affecting agricultural output and inflation.