iBoxx ALBI, iBoxx ABF and iBoxx SGD
April 2025 Commentary
It was a volatile landscape across major financial markets following what is now known as “Liberation Day.” The S&P 500® experienced a late-April rebound and closed 0.76% down for the month, fueled by positive corporate earnings and increasing optimism regarding a potential softening of the U.S. administration’s stance on tariffs.
U.S. Treasury yields also experienced significant fluctuations, as exhibited in the iBoxx $ Treasuries index, which saw its yield rise to 4.64% on April 11, before retreating to 4.35% at the end of the month. This sentiment shift was associated with the improved tariff outlook as well as increased likelihood of near-term rate cuts by the Federal Reserve. By the end of April, the iBoxx $ Treasuries index inched up by 0.59%.
Despite the ongoing trade tensions with the U.S., the Chinese stock and bond market demonstrated relative stability, supported by a strengthening domestic economy. The S&P China 500 (USD) was down as much as 11.58% in the early parts of April, but bounced back to close at -4.24% at the end of the month, potentially influenced by signals of improvements in trade negotiations between Chinese and U.S. officials. Chinese bonds, as represented by iBoxx ALBI China Onshore, posted slight gains of 0.96%.
Several central banks around the world have also responded by adjusting their key policy rates. This includes the European Central Bank (ECB), which decreased its rate by 0.25% to 2.25%, along with major Asian markets like India (down 0.25% to 6.00%) and the Philippines (down 0.25% to 5.50%).
iBoxx Asian Local Bond Index (ALBI)
March 2025 Commentary
April proved to be another positive month for Asian local markets, as indicated by the iBoxx Asian Local Bond Index (ALBI), which recorded a gain of 2.81% in unhedged USD terms. This performance again outpaced the 0.59% returns of U.S. Treasuries. The increases were fueled by growth across all local markets, along with foreign exchange gains against the U.S. dollar in most regions, with the exception of the Indonesian rupiah and the renminbi, including Offshore RMB.
In the local bond markets, India maintained its position as the top performer, rising by 2.15%, while South Korea followed closely with a gain of 1.70%. In contrast, the Philippines and China Offshore were the weakest performers, even though they still recorded modest gains of 0.34% and 0.58%, respectively.
This month, all maturity segments—short, medium and long—showed gains across the markets. Among these, the long-dated segments showed the most significant increases, with China Onshore 10+ Year bonds posting a return of 3.70%, while Singapore 10+ Year bonds increased 2.64%.
By the end of April, the overall index yield declined by 17 bps to 3.41%. Indonesia continued its status as the highest-yielding market, recording a yield of 6.91%, while China Onshore continued to be the lowest-yielding market at 1.76%.
