Korea Bond Market Daily Report(Gemini): 10/15/2024
Korea Bond Market Daily Report
Treasury yields
| Treasury yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 3Y KTB | 2.94% | ▼ 0.9 | ▼ 30.2 | ▼ 101.9 |
| 10Y KTB | 3.09% | ▲ 0.2 | ▼ 21.9 | ▼ 108.2 |
| Term Spread(bp) | 14.9 | ▲ 1.1 | ▲ 8.3 | ▼ 6.3 |
| Corp. AA- 3Y | 3.51% | ▼ 1.4 | ▼ 47.1 | ▼ 123.9 |
| Credit spread(bp) | 57.1 | ▼ 0.5 | ▼ 16.9 | ▼ 22.0 |
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% | ▲ 0.6 | ▲ 14.6 | ▼ 53.4 |
| Term Spread(bp) | 14.3 | ▲ 3.3 | ▲ 52.3 | ▲ 55.3 |
[Market Trends].
U.S. bond markets were closed for Columbus Day.
The domestic bond curve steepened on the back of a slowdown in U.S. September PPI and the governor's comments suggesting further rate cuts, with Waller noting that the pace of cuts should be decided more carefully than was necessary at the September meeting.
[Top economic news and events].
Top U.S. News
Minneapolis Fed President Neil Kasichari said gradual cuts over the next few quarters are appropriate, noting that the labor market is slowing toward more normal levels, but there are no signs of a sharp downturn.
Fed Governor Christopher Waller emphasized a cautious pace of cuts, arguing that the central bank should be more cautious in cutting rates than it was at the September meeting.
Featured News
BOK Governor Lee Chang-yong noted that the domestic demand stimulus from the rate cuts will depend on the number and pace of future cuts, and analyzed that the current economic situation is such that exports are offsetting the weak domestic demand, so that the headline GDP is growing above its potential growth rate.
Lee said that a quick cut in the benchmark interest rate was necessary to address the problems of vulnerable groups such as the self-employed, but that the possibility of rising household debt and rising real estate prices should also be considered.
Other News and Events
WGBI-related materials from the International Finance Center and the Bank of Korea's London office have been released.
When asked by ChatGPT whether he would cut the benchmark interest rate in November, Chung said a hold was the best option, citing household debt, the real estate market, the exchange rate, and fiscal policy.
[Response Strategy].
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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