Emerging East Asia’s local currency bonds are performing well but the region should prepare for the possibility of “tighter liquidity” as US quantitative easing is expected to end in October, according to a report published by the Asian Development Bank today.

An “earlier-than-expected interest rate hike” by the Federal Reserve, geopolitical tensions that “push up oil prices” and a slowing property market in China could undermine the bonds’ performance, the report states.

Outstanding bonds in