Artwork for podcast My Worst Investment Ever Podcast
ISMS 16: Top 5 EM Country Interest Rates – Normal China Yield Curve
6th April 2023 • My Worst Investment Ever Podcast • Andrew Stotz
00:00:00 00:07:56

Share Episode

Shownotes

Emerging Countries - China and Russia with stable rates, LT rates up only slightly, yield curve inversion less severe except Russia

Interest rate overview

  • China 3m yield 2.5%, India 7.2%, Korea 3.3%, Russia 22.3%, Brazil 13.6%
  • China 1yr yield 2.2%, India 7.2%, Korea 3.3%, Russia 10.0%, Brazil 13%
  • China 10yr yield 2.9%, India 7.3%, Korea 3.3%, Russia 10.3%, Brazil 13.1%

Year-on-year changes

  • 3m yield went up in most emerging countries
  • China 3m yield was up 0.1ppts, India up 3.4ppts, Korea up 2.1ppts, Russia flat, Brazil up 1.9ppts
  • 1yr yield increases most prominent in India and Korea
  • China 1yr yield was up 0.1ppts, India up 2.9ppts, Korea up 1.6ppts, Russia down 4ppts, Brazil up 0.2ppts
  • 10yr yield curve hasn’t changed significantly among emerging countries
  • China 10yr yield was flat, India up 0.5ppts, Korea up 0.4ppts, Russia down 0.8ppts, Brazil up 1.5ppts

Rate progression

  • 3m yield was quite stable in developing countries
  • Overall, developing countries have been more cautious in adjusted their short-term interest rates
  • 1yr yield was volatile in Russia over the past year; other developing countries remained flat
  • 10yr yield almost stayed constant in all emerging countries

Yield curve

  • China yield curve remained constant over the past 12 months
  • Both short-term and long-term yield haven’t moved much
  • As of March 2023, the 10yr yield remained 0.4ppts higher than the 3m yield
  • India yield curve flattened massively and looks set to invert
  • 3m yield almost reached the same level as 10yr yield recently
  • This is a massive change YoY as the yield curve was pretty steep back in March 2022
  • Korea yield curve inverted slightly in March 2023
  • Russia yield curve stays inverted
  • Both short term yield and long-term yield haven’t moved much
  • Brazil yield curve inversion has widened
  • The inversion accumulated to 0.5 ppts which is a bit higher compared to the previous year

Key points

  • India, Korea, and Brazil raised ST rates significantly; China and Russia were stable
  • LT rates are up slightly in all EM countries but increased less than World
  • Brazil and Korea saw yield curve inversion recently, Russia remains worst

 

Click here to get the PDF with all charts and graphs

 

Andrew’s books

Andrew’s online programs

Connect with Andrew Stotz:

Follow

Links

Chapters

Video

More from YouTube