Rising bond yields, tariffs under Trump a worry for Asia investors, says Goldman Sachs

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Global markets have recovered from Donald Trump's surprise election win but rising bond yields and potential implementation of tariffs on exports to the U.S. have Asian investors concerned, Goldman Sachs' chief Asia equity strategist told CNBC.

Timothy Moe, who is also co-head of Asia macro research at the investment bank, told CNBC's "Squawk Box" on Monday that these concerns were partly responsible for a notable sell-off in regional currencies seen last week.

On Friday, the Indian rupee fell 1 percent against the dollar, the Indonesia rupiah tumbled 1.13 percent, and the Malaysian ringgit lost 0.23 percent, after slipping 1.08 percent against the greenback on Thursday.

Bond yields rose globally, with the 10-year Treasury bid-yield climbing from 1.828 percent before the election to 2.189 percent on Monday morning in Asia, while the benchmark 10-year Japanese government bond yield climbed from -0.051 percent to -0.023 percent for the same period. Bond prices moved inversely to yields.

This implied investors would likely prefer Treasurys over Asian government notes due to the U.S. bonds' relative stability and higher yield.

As a result, market watchers expected portfolio outflows from Asia, which, along with potential new trade barriers from the U.S., could "constrain any positive spillovers (into Asia) from better U.S. growth or positive U.S. equity performance," according to Nomura analysts in a Monday note.

An ongoing rally in U.S. stocks after the election - last week the Dow Jones industrial average posted its best weekly performance since December 2011 - appeared to suggest investors were betting on Trump's proposed fiscal deficit through tax reduction and infrastructure spending to boost U.S. growth.

Goldman's Moe said the market had not necessarily fully priced in any fallout that might occur from any potential trade policies the Trump administration might implement.

Trade was a key talking point on the campaign trail, with the president-elect vowing to renegotiate existing free trade deals, veto the passing of the Trans Pacific Partnership agreement and impose a 45 percent tariff on imports from China. '

"We think (levying a 45 percent tariff on Chinese imports was) highly unlikely to happen, but ... there's probably something which needs to happen from a political standpoint," said Moe. It remained to be seen if Trump's measures were going to be more of "a political statement" or policies bearing "real economic consequences," Moe added.

Things could still get tricky for Asia, even if Trump did not pursue his more radical trade policies, Moe warned.

If Trump's potential fiscal measures delivered higher-than-expected growth for the U.S. and subsequently the Fed increased rates enough to create a sizable difference between interest rates in the U.S. and the rest of the world, it could drive the dollar higher.

"That's something which then comes full circle to Asia because typically, a strong dollar environment, and one (where) we've got a rise in interest rates, has been more challenging for some parts of Asia, particularly where you have so-called carry trades," he said, adding that there was lasting concern that China could implement swift and rapid depreciation of the renminbi.

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