Korea Bond Market Daily Report: 9/22/2024
Korea Bond Market Daily Report
Treasury yields
| Treasury yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 3Y KTB | 2.84% | ▼ 0.5 | ▼ 40.2 | ▼ 105.2 |
| 10Y KTB | 2.99% | ▲ 1.0 | ▼ 31.7 | ▼ 97.4 |
| Term Spread(bp) | 15.1 | ▲ 1.5 | ▲ 8.5 | ▲ 7.8 |
| Corp. AA- 3Y | 3.43% | ▼ 0.6 | ▼ 55.4 | ▼ 121.9 |
| Credit spread(bp) | 58.8 | ▼ 0.1 | ▼ 15.2 | ▼ 16.7 |
US Treasury Yields
| US Treasury Yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 2Y US Treasury | 3.59% | ▼ 2.0 | ▼ 74.0 | ▼ 149.0 |
| 10Y US Treasury | 3.73% | ▲ 3.0 | ▼ 22.0 | ▼ 64.0 |
| Term Spread(bp) | 14 | ▲ 5.0 | ▲ 52.0 | ▲ 85.0 |
[Market Trends].
On September 19, 2024, the FOMC decided to cut rates by 50 basis points in the bond market and expanded the rate cut to 100 basis points for the rest of the year, and signaled further rate cuts of 50 and 100 basis points in 2026 and 2025, respectively.
U.S. Treasury rates adjusted after the Fed's announcement and the latest initial jobless claims came in lower than expected. Despite the favorable weekly unemployment data, the gap between bond rates increased.
[Top economic news and events].
Top U.S. News
The US FOMC cut interest rates by 50 basis points to a new target range of 4.75%-5.00%.
Weekly initial jobless claims came in below expectations at 219K, indicating stabilization in the labor market.
Featured News
BOK Governor Lee Chang-yong noted that the U.S. rate cut is reducing pressure on foreign exchange markets and has created an environment for monetary policy to focus on domestic factors.
Treasury yields rose on the 10-year and 3-year bonds, with markets expecting the BOK to cut rates in the wake of the Fed.
Other News and Events
At least 25 people were killed in Lebanon in an explosion of a communications device belonging to militant Hezbollah, escalating military tensions in the Middle East.
The Bank of England left its benchmark interest rate unchanged at 5%. This was in line with market expectations, and the Bank noted that it will continue to cut rates gradually.
[Response Strategy].
After the Fed's rate cut, the pace of rate cuts is likely to be adjusted, and markets will react to the unemployment rate. Therefore, interest rate reversals and capital flows will be closely watched.
Disclaimer The information contained in this report has been obtained from sources believed to be reliable, but we do not guarantee its accuracy or completeness. This report is for informational purposes only and is not a solicitation or offer to buy or sell any security or financial instrument. Opinions expressed in this report are subject to change without notice. Investment decisions are the sole responsibility of the investor and you should seek professional advice as needed
Original Post: https://aicraft.life/korea-bond-market-daily-report-9-22-2024/
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