Southeast Asian Equities and Rate Hikes - Thinking Beyond the US Data
Watching $SI spike to $20.73 today, which is quite the move after yesterday's muted reaction to the CPI. It reinforces my view that precious metals are getting some serious tailwinds beyond just the dollar, likely a global inflation play. On the Asian side, this makes me think about how long central banks in Southeast Asia can truly lag the Fed if inflation remains sticky. We see $US30 sitting at 53732.41, off its highs, suggesting rate hike jitters are still very much in play. If Asian CBs are forced to hike more aggressively, it's going to hit valuations in some of the high-growth sectors on the SET and potentially the Hang Seng pretty hard. I'm starting to trim exposure in my more speculative Asian picks and rotating into less rate-sensitive plays, or just plain cash, until we get more clarity on their rate paths. The easy money from their relative dovishness might be drying up. Not saying a crash is coming, just adjusting for the new reality.
It's interesting how the silver spike feels like a different beast than the usual inflation hedges. I'm curious, do you think Southeast Asian central banks have more room to maneuver because of their specific economic structures, or are they ultimately tied to the global rate environment regardless?