Global Bond Yields Diverge Amid Geopolitical Tensions, Economic Resilience

Bond markets in Asia are experiencing mixed trends amid global geopolitical tensions and domestic economic factors. Malaysian Government Securities yields showed a slight rise for the 10-year MGS due to risk aversion triggered by geopolitical instability in the Middle East and political unrest in several countries, alongside threats of increased tariffs by the U.S. under President Trump; however, resilient Malaysian economic indicators helped stabilize yields. Indian bonds have exhibited strong resilience over the past two years, supported by the Reserve Bank of India's monetary easing and fiscal discipline, with significant rate cuts and liquidity injections lowering yields, although rising U.S. tariffs and unresolved trade tensions are beginning to impact the market. Globally, central banks are generally lowering borrowing costs as inflation eases from recent multi-decade highs, with policymakers cautious about the final stages of inflation reduction and closely monitoring inflation components and bond yields to guide future interest rate decisions. These developments reflect a complex interplay of domestic economic strength and ongoing global uncertainties influencing bond yield movements and central bank policies worldwide.