Treasuries fell, pushing long-term yields to the highest in four months, as a rout in Japanese bonds and fallout from US President Donald Trump’s tussle with European allies over control of Greenland weighed on global markets. US bonds started the day in sharp decline amid a fierce selloff in Japanese government debt, which triggered turbulence worldwide. Treasuries then dipped even lower after a Danish pension fund said it will sell its holdings of US government debt, before partially rebounding. Most ...

Core Viewpoint - The past year has seen a significant role reversal between developed and emerging markets, with emerging markets benefiting from easing inflation and a weaker dollar, while the US experiences high yields, inflation, and volatility [1][2]. Group 1: Market Dynamics - The US has transitioned into a market characterized by high yields and inflation, akin to emerging markets, while emerging markets enjoy low rates and low inflation [2]. - The US-China trade war has contributed to this shift by allowing China to export deflationary pressures to other emerging markets, enabling their central banks to cut rates [2]. Group 2: Interest Rate Solutions - Standard Chartered Bank (SCB) has adapted its interest rate solutions business to align with the changing dynamics, focusing on emerging markets for client funding needs [4][5]. - There has been a notable increase in demand for structured interest rate products in currencies like Korean won, Malaysian ringgit, and Thai baht, as investors seek to lock in rates and volatility [5][9]. Group 3: Client Transactions - SCB has facilitated various transactions, including providing THB callable swaps for a client in Thailand to hedge market risk on long-dated investments [7]. - The bank has also offered short-term financing to corporate clients in Vietnam, using USD deposits as collateral to secure loans in VND, enhancing cost efficiency [9][10]. Group 4: Emerging Market Trends - The divergence between government bonds and swaps in Asia has led SCB to shift its focus towards more exotic rates products, such as government bond-linked options [14][16]. - SCB has issued approximately 2,000 structured notes valued at around $3 billion in 2024, indicating a growing demand for bond-linked structured notes [17]. Group 5: Market Access and Opportunities - SCB has capitalized on dislocations in local currency bond markets and swap markets to facilitate market access trades for offshore investors [20][21]. - The bank's strong onshore presence and product capabilities enable it to deliver solutions in illiquid and difficult-to-access markets across the region [20].