Korea Bond Market Daily Report: 10/7/2024
Korea Bond Market Daily Report
Treasury yields
| Treasury yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 3Y KTB | 2.82% | ▲ 4.4 | ▼ 41.6 | ▼ 128.4 |
| 10Y KTB | 3.00% | ▲ 6.4 | ▼ 31.0 | ▼ 135.5 |
| Term Spread(bp) | 17.2 | ▲ 2.0 | ▲ 10.6 | ▼ 7.1 |
| Corp. AA- 3Y | 3.42% | ▲ 4.5 | ▼ 56.5 | ▼ 145.6 |
| Credit spread(bp) | 59.1 | ▲ 0.1 | ▼ 14.9 | ▼ 17.2 |
US Treasury Yields
| US Treasury Yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 2Y US Treasury | 3.92% | ▲ 22.4 | ▼ 40.6 | ▼ 115.6 |
| 10Y US Treasury | 3.97% | ▲ 11.9 | ▲ 1.9 | ▼ 81.1 |
| Term Spread(bp) | 4.5 | ▼ 10.5 | ▲ 42.5 | ▲ 34.5 |
[Market Trends].
Nonfarm payrolls came in at 25.4K in September, significantly above expectations (14.7K), which is a positive sign for the recovery.
PMIs in the US are coming in strong, and we're seeing the impact of higher oil prices, which are pushing domestic interest rates higher. Along with this, US Treasury rates have also spiked.
[Top economic news and events].
Top U.S. News
The September employment report showed that nonfarm payrolls increased by 25.4K, significantly exceeding market expectations. The unemployment rate fell to 4.1%.
As rate cut expectations recede in the US market, Treasury yields are rising, narrowing the gap between short- and long-term rates.
Featured News
The Korean bond market also saw interest rates rise in synchronization with the rise in US Treasury rates, with foreigners being net sellers of government bond futures.
The unemployment rate, which excludes government jobs, is at 4.5%, exceeding the Fed's target of 4.5%, providing the context for the rate cut.
Other News and Events
U.S. stocks closed higher, easing recession fears after a positive September jobs report.
The recent spike in oil prices has raised concerns about the impact on the South Korean economy, which has led to increased interest rate volatility.
[Response Strategy].
Following the positive outcome of the employment data, interest rates in the US and South Korea are expected to strengthen, and it is necessary to review liquidity and have a flexible response strategy in place depending on market conditions.
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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