Korea Bond Market Daily Report: 10/10/2024
Korea Bond Market Daily Report
Treasury yields
| Treasury yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 3Y KTB | 2.93% | ▼ 2.8 | ▼ 30.8 | ▼ 108.3 |
| 10Y KTB | 3.08% | ▼ 2.4 | ▼ 22.9 | ▼ 116.3 |
| Term Spread(bp) | 14.5 | ▲ 0.4 | ▲ 7.9 | ▼ 8.0 |
| Corp. AA- 3Y | 3.52% | ▼ 2.9 | ▼ 46.3 | ▼ 127.9 |
| Credit spread(bp) | 58.5 | ▼ 0.1 | ▼ 15.5 | ▼ 19.6 |
US Treasury Yields
| US Treasury Yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 2Y US Treasury | 4.02% | ▲ 4.2 | ▼ 30.8 | ▼ 105.8 |
| 10Y US Treasury | 4.08% | ▲ 3.5 | ▲ 12.5 | ▼ 70.5 |
| Term Spread(bp) | 5.3 | ▼ 0.7 | ▲ 43.3 | ▲ 35.3 |
[Market Trends].
According to the September FOMC minutes, members were split on whether to cut rates, with some members supporting a 25 basis point rate cut. This information is having an impact on market rates, with US Treasury yields rising.
South Korean government bonds turned lower on expectations of inclusion in the WGBI, indicating a positive market reaction despite net selling of foreign government bond futures.
[Top economic news and events].
Top U.S. News
U.S. equity markets closed higher, with the Dow Jones Industrial Average up 1.03%, while Boeing shares weighed in with a 3.4% decline. Expectations for long-term growth are building, with AI and semiconductor stocks rising.
The release of the FOMC minutes provided a fairly encouraging economic outlook, while the debate over the Fed members' stance on interest rate adjustments continues.
Featured News
South Korea was successfully inducted into the FTSE Russell World Government Bond Index (WGBI) on September 9, which is a positive step towards foreign capital inflows into the Korean market. The actual inclusion will take place gradually starting next November.
With the inclusion in the WGBI, the Korean government bond market is expected to receive an inflow of around $32.7 trillion to $57.5 trillion, which is expected to contribute to lower bond yields and stabilize the exchange rate.
Other News and Events
International oil prices fell after Israel cited the possibility of striking Iran's military and intelligence facilities, reflecting geopolitical risk aversion.
While there are still a number of uncertainties in the U.S. economy, an easing in the job market is expected to have a positive effect on stabilizing inflation.
[Response Strategy].
Given the market trends going forward, we will need to intensify our monitoring of Korean and U.S. government bonds, and prepare various countermeasures to reduce the risk of foreign capital inflows. In particular, we should pay close attention to the Fed's direction regarding interest rate cuts.
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
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Original Post: https://aicraft.life/korea-bond-market-daily-report-10-10-2024/
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