Korea Bond Market Daily Report(Gemini): 10/14/2024
Korea Bond Market Daily Report
Treasury yields
| Treasury yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 3Y KTB | 2.95% | ▼ 1.5 | ▼ 29.3 | ▼ 100.6 |
| 10Y KTB | 3.08% | ▼ 0.3 | ▼ 22.1 | ▼ 105.7 |
| Term Spread(bp) | 13.8 | ▲ 1.2 | ▲ 7.2 | ▼ 5.1 |
| Corp. AA- 3Y | 3.52% | ▼ 1.9 | ▼ 45.7 | ▼ 121.2 |
| Credit spread(bp) | 57.6 | ▼ 0.4 | ▼ 16.4 | ▼ 20.6 |
US Treasury Yields
| US Treasury Yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 2Y US Treasury | 3.95% | ▼ 2.7 | ▼ 37.7 | ▼ 108.7 |
| 10Y US Treasury | 4.10% | ▲ 1.0 | ▲ 15.0 | ▼ 53.0 |
| Term Spread(bp) | 14.7 | ▲ 3.7 | ▲ 52.7 | ▲ 55.7 |
[Market Trends].
September US PPI came in at 0.0% m/m, below expectations (0.1%). US Treasury curve steepened as expectations for a November hike remain.
The University of Michigan Consumer Sentiment Index for October came in at 68.9 points, below expectations (71.0 points), while one-year inflation expectations came in at 2.9%, above expectations (2.7%).
[Top economic news and events].
Top U.S. News
September US Producer Price Index (PPI) unchanged month-on-month (0.0%), below consensus of 0.1%, contrary to fears after the CPI surprise. Mixed signals in the Fed's preferred PCE inflation-linked component.
US October University of Michigan Consumer Sentiment reading slowed to 68.9 from 70.1 in September, below consensus. One-year short-term inflation expectations rebounded to 2.9%, up from 2.7% in the previous month, with concerns about high prices rising despite favorable employment conditions.
Featured News
In October, the central bank cut its benchmark interest rate by 25 basis points, citing progress in achieving its inflation target and a dovish interpretation of domestic uncertainty.
Key economic data will be released, including September Korean import and export prices, September unemployment rate, and August M2.
Other News and Events
There's been a "Helen Spike" in the US labor market. Initial jobless claims for the week sharply exceeded expectations, hitting 25.8 million – up 3.3k from the previous week, a historically high spike
China's September consumer price index (CPI) came in at 0.4% y/y, below consensus (0.6%). The producer price index (PPI) also came in at -2.8%, below consensus (-2.6%), marking the 24th consecutive month of declines, as the country faces its longest deflationary spell since the 1990s amid weak domestic demand.
[Response Strategy].
U.S. Treasury rates continue to rise, requiring a strategy to capitalize on the rate momentum generated by the gap between expectations and actuals.
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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