US Fed not key to Asian bonds

BNP economist says fixed income credit spreads will remain flat in 2004 despite rising US interest rates.

Asian fixed income performance will remain flat in 2004, maintaining the narrow credit spreads that corporate and sovereign bonds achieved in 2003, says Andrew Freris, chief economist at BNP Paribas.

Freris predicts US interest rates will rise by May or June this year, with short-term interest rates up 150 basis points and long-term rates up by as much as 175 bps by year-end, but that Asia-specific factors will limit any widening of Asian spreads, despite the fact that...

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