(Reuters) – Foreign flows into Asian bonds more than doubled in 2019 as a fall in U.S. interest rates and a de-escalation in Sino-U.S. trade tensions helped to prop up money flows into the region.

Overseas investors purchased a net $25.98 billion worth of regional bonds in 2019 after inflows declined sharply to $10.02 billion in 2018, according to data from regional banks and bond market associations in Indonesia, Malaysia, Thailand, South Korea and India.

Foreign flows into Asian bonds – annual here

Yet, the net inflows into the five markets were much lower than the $49 billion worth of money received in 2017.

“EM Asia (ex-China) saw a moderate rebound in foreign demand in 2019 that suggests foreign positioning in these markets is not stretched,” ANZ Banking Group said in a report this week.

The U.S. Federal Reserve cut its policy rate three times last year and launched a programme to buy $60 billion per month in Treasury bills, while the European Central Bank cut its deposit rate to a record low of -0.5% and restarted bond purchases of 20 billion euros a month.

Indonesia and South Korean bond markets had inflows of $11.98 billion and $7.63 billion, respectively, leading the region last year.

Malaysian bonds drew $4.84 billion worth of foreign money, the highest in at least six years while Indian bonds attracted $3.75 billion last year.

Thai bonds, meanwhile, faced outflows worth $2.22 billion last year, after three successive years of inflows.

The United States and China agreed on a preliminary trade deal in December to end their protracted trade war. The deal is expected to be signed on Jan. 15.

In December, however, the five markets witnessed a cumulative outflow of $1.09 billion, the first outflow in eight months.

Foreign flows into Asian bonds here

“In the year ahead, the de-escalation of U.S.-China trade tensions and a moderate recovery in the region’s economic growth should be positive for the portfolio flow outlook,” said ANZ’s Goh.