iBoxx ALBI, iBoxx ABF and iBoxx SGD
November 2024 Commentary
In November, Trump’s victory in the presidential elections, along with the Republican party winning majorities in Congress, has positioned the president-elect favorably to advance his economic agenda, which is believed to focus on trade tariffs, immigration controls and tax cuts. It remains to be seen how these developments will unfold in the months ahead. Adjacent to the presidential elections, the U.S. Federal Reserve also announced a rate cut of 25 bps, which had been anticipated by market observers.
In the immediate aftermath, the S&P 500® soared to new heights, rising 5.73% in November. Bitcoin also experienced a significant surge, climbing nearly 40% during the same month, as represented by the S&P Bitcoin Index. In the bond markets, U.S. Treasuries—as represented by the iBoxx $ Treasuries—edged up by 0.91%, while U.S. corporate bonds—as represented by iBoxx $ Corporates—saw an increase of 1.27%, both reversing losses from the previous month.
There were notable actions taken by central banks in other markets, including the Bank of England, which decided to lower its key interest rate by 25 bps. Meanwhile, in the Asia Pacific region, the Bank of Korea announced a 25 bps reduction toward the end of November, while the Reserve Bank of New Zealand remained committed to lowering its policy rate by implementing a 50 bps rate cut for the second month in a row to 4.25%.
In Asia, stock markets experienced a decline of 2.20% in November, as indicated by the S&P Pan Asia Ex-Japan LargeMidCap (USD). This drop was influenced by Chinese stocks, the largest market in the index, as the S&P China 500 (USD) fell by 3.13%.
iBoxx Asian Local Bond Index (ALBI)
November 2024 Commentary
While most underlying local markets in Asia recorded modest gains in the penultimate month of 2024, the overall Asian Local Bond Index (ALBI) measured in USD unhedged terms pulled back by 0.24%. This was primarily attributed to the ongoing appreciation of the U.S. dollar against all ALBI local currencies this month. Notably, the renminbi and offshore renminbi experienced declines of 1.50% and 1.46%, respectively, against the greenback, placing them at the lower end of the spectrum.
In local markets, measured in local currencies, South Korea was the standout performer in November, returning 3.25%. Coming in second was Thailand (up 1.40%), while China Onshore and Malaysia were tied at third place (up 0.88%). The Philippines and China Offshore were at the bottom of the ladder, losing 0.18% and 0.05%, respectively.
