CIO Views Weekly Bulletin Week 20 2026

Rising US Treasury yields, fueled by energy inflation and a stalemate in US-China policy, are exerting significant pressure on Asian currencies and bonds. Central banks in India and Indonesia are increasingly likely to hike rates to combat rapid currency depreciation.

Key Takeaways

• 1.Rising energy prices and US yields are putting significant depreciation pressure on Asian currencies, particularly for net energy importers like India and Indonesia.
• 2.China's economic recovery remains uneven ('K-shaped'), driven by strong exports while domestic demand and fixed asset investment remain weak.
• 3.The lack of policy breakthroughs at the Trump-Xi summit regarding energy routes like the Strait of Hormuz has pushed Brent crude and US Treasury yields higher.

Table of Contents

• Implications of rising US yields for Asia
• Pageantry over policy China-US summit risks higher energy prices
• We see several key implications for Asian financial assets
• Asian yields have room to rise further
• The China growth story remains export driven
• Market Review
• Market Data

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