U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
BTC Flat at $89,300 Despite $1.02B ETF Exodus — Buy the Dip Toward $107K? 
Fed Confirms Rate Meeting Schedule Despite Severe Winter Storm in Washington D.C. 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
RBA Raises Interest Rates by 25 Basis Points as Inflation Pressures Persist 
Wall Street Analysts Weigh in on Latest NFP Data 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Bank of Japan Likely to Delay Rate Hike Until July as Economists Eye 1% by September 
In this write-up, the central banks of EM rate expectations monitor reveal some opportunities. While EMFX implied volatility has moved higher from the multiyear lows this week and DM rates sold off.
In Korea, the market is priced for 25bp of rate hikes over the coming year while the Bank of Korea (BoK) is expected to keep its policy rate unchanged at 1.25% by unanimous decision at its policy meeting on 13 July. The BoK is likely to revise up its GDP forecasts as it already suggested at the meeting in May, but we don’t expect it to give any formal guidance on the direction of monetary policy.
The recent spike in 2yr swap rates offers a good opportunity to tactically receive the front-end.
In India, the market expects the RBI to ease again (20bp priced in through to October). But we do not envision more cuts beyond that and unless the RBI cuts and sounds very dovish, paying rates offer better risk-reward in our opinion.
In Russia, payer positions at the front-end offer better risk-reward. The market is priced for 70bp of cuts to year-end, the CBR doesn’t appear to be in a rush to cut aggressively.
The bond connects could make the correlation of Chinese rates with global yields more positive and stable over time if foreign investors become more active in China’s bond market.
The correlation between weekly changes in Chinese and global yields (we use US, Germany, and Korea as examples) is currently quite high on a historical basis. Correlations do not mean causation, and the chart to the left shows that over the past five years there have been episodes of both positive and negative correlation.
