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Indexes in Japan, Australia and South Korea retreated after the S&P 500 dropped 3.5% Thursday, as market euphoria turned to angst after the White House clarified US tariffs on China rose to 145%.
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Private sector companies have seen their spreads widen, whereas government-owned banks and state-owned companies have largely remained steady, with yields on their dollar bonds remaining flat over the past week following the tariff announcement. However, relief came from tariff pause for some issuers like Biocon Biologics' 6.67% due 2029 rising 4 points today, though still lower by over 8 points from start of the month.
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Some expect a slightly deeper cycle, with expectations of a terminal rate at 5% by December 2025 as the Reserve Bank of India surprised the market with a change in its stance to 'accommodative' from 'neutral', along with a downgrade in growth forecasts, "decisive improvement" in the inflation outlook and commitment to surplus liquidity.
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