Tail-Risk Premia Appear to be Unwinding

Asian FX markets are experiencing an unwinding of tail-risk premia as US-Iran tensions de-escalate and US yields soften. The outlook for USDTHB has turned less bullish, while the Singapore dollar is expected to remain resilient under MAS policy.

Key Takeaways

• 1.Tail-risk premia in Asian FX, particularly the Thai baht, are unwinding as geopolitical tensions between the US and Iran show signs of de-escalation.
• 2.US front-end yields (2-year) are pulling back, which may signal a broader move lower in interest rates.
• 3.US PCE inflation data met expectations but indicates moderating price pressures and cooling activity indicators.

Table of Contents

• Market Highlights
• Ahead Today
• INDICATIVE RATES
• Disclaimer
• CERTIFICATION
• DISCLAIMERS
• General disclosures
• Country and region specific disclosures

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