Easing Bets
Central banks in Australia and Malaysia cut rates on Tuesday ahead of the Fed, and speculation is rife that the Bank of Korea will follow suit after its governor held an emergency meeting with officials. The Reserve Bank of India also said there’s room to ease as the nation reports its first cases.
Korea's 3-year yield falls below central bank's policy rate amid easing speculation
Overnight index swaps are priced for the Reserve Bank of Australia to lower rates by another 25 basis points in April. Money markets indicate about an 80% chance of a 50-basis-point cut by New Zealand this month. Even the Bank of Japan is now seen as leaning toward a cut by economists.
“A coordinated global central bank accommodation would create an asymmetric risk reward for owning duration assets,” said Jennifer Kusuma, senior Asia rates strategist at Australia & New Zealand Banking Group Ltd.