Latest news with #KamakshyaTrivedi
Yahoo
6 days ago
- Business
- Yahoo
High-yielding bonds in EM may beat peers as treasuries decline
Debt from India, Indonesia, Brazil and South Africa has outperformed EM peers since April 2, when US President Donald Trump shocked global markets with his tariffs. Riskier emerging-market bonds may continue to beat their lower-yielding peers as the dollar's slide softens a rise in Treasury yields, protecting investor returns, according to analysis by Bloomberg. Debt from India, Indonesia, Brazil and South Africa has outperformed EM peers since April 2, when US President Donald Trump shocked global markets with his tariffs. The dollar rose in the four previous instances since 2021 when 10-year emerging-market bonds reacted to a rise in US benchmark yields. This time, however, the dollar has fallen, allowing currency returns to compensate for the duration spillover impact from higher US yields. 'Spillovers from rising US back-end rates to EM rates might be lower this time around' due to the effect of the weakening greenback, Goldman Sachs Group Inc. strategists including Kamakshya Trivedi and Danny Suwanapruti wrote in a recent note. Higher-yielding EM bonds will tend to benefit more from this environment, they added. Dollar-funded investments into yielder EM bonds tend to be unhedged due to the high cost of implementing protection relative to their lower-yielding peers, and see larger FX gains when the dollar falls. The ratio of yield moves this quarter versus the historical average for India was minus 0.88, versus Indonesia, Brazil and South Africa at -0.57, -0.55 and -0.50 respectively. This means that India's yields in the most recent scenario have declined the most relative to its historical mean. Peers which offer lower yields, such as the Czech Republic and South Korea, tend to be more affected by the surge in US yields due to the tighter spreads. 'EM local markets have been a beneficiary of the weaker US dollar this year,' said Anders Faergemann, head of global sovereigns and economics at PineBridge Investments. 'A continuation of that trend would help to cushion local bond performance.' Start End Indonesia India Malaysia Thailand S. Korea S. Africa Poland Czech Mexico Brazil Chile Aug-3-2021 May-6-2022 0.65 0.91 1.34 1.66 1.54 1.15 5.13 2.89 2.16 3.13 0.77 Aug-1-2022 Oct-4-2022 0.09 0.09 0.54 0.55 0.79 0.23 1.45 1.01 1.10 (1.08) 0.92 July-19-2023 Oct-19-2023 0.64 0.34 0.30 0.78 0.77 0.87 0.48 0.67 1.24 1.21 1.14 Sept-16-2024 Jan-6-2025 0.41 0.00 0.07 (0.23) (0.11) 0.15 0.67 0.46 1.04 2.40 0.35 April-2-2025 May-21-2025 (0.25) (0.30) (0.18) (0.07) (0.02) (0.30) (0.19) 0.03 0.27 (0.78) (0.05) Ratio (0.57) (0.88) (0.32) (0.10) (0.03) (0.50) (0.10) 0.02 (0.20) (0.55) (0.07) See Also: Click here to stay updated with the Latest Business & Investment News in Singapore Alphabet leads US high-grade issuance rush DBS remains overweight US amid 'complex' and 'nuanced' landscape Constructive Asiadollar and Singdollar credit markets in 2024 Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
Yahoo
16-05-2025
- Business
- Yahoo
Wall Street Is Down on the Dollar as Trade Unease Lingers
(Bloomberg) -- In a week that saw an epic rally in US stocks and recession calls cast aside, currency traders are just as bearish as ever on the American dollar. As Coastline Erodes, One California City Considers 'Retreat Now' How a Highway Became San Francisco's Newest Park Maryland's Credit Rating Gets Downgraded as Governor Blames Trump NYC Commuters Brace for Chaos as NJ Transit Strike Looms Power-Hungry Data Centers Are Warming Homes in the Nordics Strategists at JPMorgan Chase & Co. and Deutsche Bank AG say the currency will keep weakening, and sentiment among options traders is the most negative in five years. The dollar index is still close to its April lows, evidence that investors are wary of returning despite the easing of China trade tensions that lifted other markets. It's been a volatile ride, with the greenback having plunged over 6% in 2025 against a basket of currencies, its worst year so far in Bloomberg data going back two decades. In the view of many, US policymaking continues to be erratic and unpredictable, making the currency less attractive. And despite denials from Washington, some investors still suspect the Trump administration of wanting a weaker dollar to shore up the US manufacturing base. 'US exceptionalism is eroding gradually, and these moves have longer to run,' Kamakshya Trivedi, head of global currencies at Goldman Sachs Group Inc., said on Bloomberg TV this week. While the 'Sell America' trade may have lost some of its intensity, the market is still uneasy, according to Valentin Marinov, head of G-10 FX strategy at Credit Agricole SA. Investors now have a 'love-hate' relationship with the dollar, he said. Bets in the options market on a decline in the dollar over the next year are now at the highest level since 2020. These long-term options are typically used by money managers rather than short-term speculators, reinforcing the argument that a broader reassessment of dollar exposure is taking place. Unhedged and Burned, Stock Investors Brace for More Dollar Pain Meanwhile in stocks, the S&P 500 has rallied over 4.5% this week as President Donald Trump's tour in the Middle East fanned optimism for tech deals and inflation data was subdued. US equity funds attracted about $19.8 billion in the week through May 14, the first inflows in five weeks, according to a note from Bank of America Corp. citing EPFR Global data. While the dollar rallied 1% on Monday on the back of the news that China and US agreed to temporarily cut tariffs, it lost most of those gains later in the week. This underperformance versus stocks 'is showing you that international investors simply aren't buying into Trump's US exceptionalism theme,' said Peter Kinsella, head of FX strategy at Union Bancaire Privee Ubp SA. To Erik Nelson, a macro strategist at Wells Fargo, there needs to be more signs of a structural US slowdown for the dollar to weaken further. 'I'm trying to keep a very open mind in this market because what the dollar did in April was pretty wild,' he added. George Saravelos, Deutsche Bank's global head of currency strategy, notes that inflows into US assets are already slowing, while countries like Taiwan have asked banks to review risk management protocols on their US investments. All this points to less buying of Treasuries, considered the safest investments in the world. The clearest sign of this will be a further decoupling of US yields and the dollar, Saravelos said. That would involve the dollar falling against the yen while Treasury yields climb, given that Japan is traditionally one of the biggest investors of US fixed income and any slowdown in buying would have weight. What a Weaker US Dollar Means for the Economy: QuickTake Strategists at JPMorgan say the case for shorting the greenback remains intact. The team including Meera Chandan wrote that the US's softer stance on tariffs would support economic growth in other parts of the world, boosting their currencies. In the view of Jupiter Asset Management's Mark Nash, investors are looking for countries that have outsized dollar holdings and then shorting the greenback against the local currencies. The Korean won and Indonesian rupiah are two that stand out to him. 'Asia is now at the forefront of a global repatriation theme,' he said. 'Investors are taking their capital back from the US.' --With assistance from Vassilis Karamanis and Ruth Carson. (Adds detail on dollar performance.) Cartoon Network's Last Gasp Microsoft's CEO on How AI Will Remake Every Company, Including His DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race As Nuclear Power Makes a Comeback, South Korea Emerges a Winner Why Obesity Drugs Are Getting Cheaper — and Also More Expensive ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
15-05-2025
- Business
- Yahoo
Yuan Is Set to Gain Versus Dollar, Goldman Sachs Says
Kamakshya Trivedi, head of global FX, rates and emerging-market strategy at Goldman Sachs, discusses the outlook for the dollar against Asian currencies including the yuan. "We think the CNY is going to appreciate versus the dollar going forward," Trivedi tells Bloomberg Television. "That's an important anchor for global foreign exchange markets." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
14-05-2025
- Business
- Bloomberg
Yuan Is Set to Gain Versus Dollar, Goldman Sachs Says
Kamakshya Trivedi, head of global FX, rates and emerging-market strategy at Goldman Sachs, discusses the outlook for the dollar against Asian currencies including the yuan. "We think the CNY is going to appreciate versus the dollar going forward," Trivedi tells Bloomberg Television. "That's an important anchor for global foreign exchange markets." (Source: Bloomberg)
Bloomberg
12-05-2025
- Business
- Bloomberg
Goldman Sees Yuan Reaching 7 Per Dollar as Trade Talks Progress
Goldman Sachs Group Inc. lifted its yuan forecast to 7 per dollar over the next 12 months as US-China trade negotiations get underway. The bank also upgraded its view on the currency to 7.20 and 7.10 per dollar for the three and six-month periods, Goldman analysts led by Kamakshya Trivedi wrote in a note on Friday, citing factors including China's strong exports.
