Korea Bond Market Daily Report(Gemini): 11/6/2024
Korea Bond Market Daily Report
Treasury yields
| Treasury yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 3Y KTB | 2.92% | ▼ 1.7 | ▼ 32.2 | ▼ 103.1 |
| 10Y KTB | 3.07% | ▼ 2.3 | ▼ 23.3 | ▼ 103.2 |
| Term Spread(bp) | 15.5 | ▼ 0.6 | ▲ 8.9 | ▼ 0.1 |
| Corp. AA- 3Y | 3.49% | ▼ 1.6 | ▼ 48.9 | ▼ 129.8 |
| Credit spread(bp) | 57.3 | ▲ 0.1 | ▼ 16.7 | ▼ 26.7 |
US Treasury Yields
| US Treasury Yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 2Y US Treasury | 4.19% | ▲ 1.9 | ▼ 14.1 | ▼ 64.1 |
| 10Y US Treasury | 4.28% | ▼ 3.3 | ▲ 32.7 | ▼ 29.3 |
| Term Spread(bp) | 8.8 | ▼ 5.2 | ▲ 46.8 | ▲ 34.8 |
[Market Trends].
Bond Market November 6, 2024 1) US ISM Services Index rose to 56.0% in October, the highest level in 27 months. 2) US Treasury yields rebounded slightly on the back of a stronger 10-year Treasury auction and the growing likelihood of a Harris victory. 3) South Korea's October headline CPI came in slightly below expectations at +1.3% y/y, but the impact was limited and domestic rates fell on the back of the Trump trade reversal.
New York stocks close higher (Dow up 1.02%, S & P500 up 1.23%, Nasdaq up 1.43%) as uncertainty over the US presidential election eases. On Election Day, polls showed Harris with a slight lead over Trump. However, the New York stock market seemed to focus on the lack of uncertainty surrounding the election.
[Top economic news and events].
Top U.S. News
U.S. October ISM Services PMI came in above consensus at 56.0, marking the fastest expansion in services since July 22. Among the sub-indices, the employment index increased significantly, reaffirming favorable labor market conditions.
Goldman Sachs sees limited potential for a bear market in U.S. equities after the election. Only 18% of stocks are likely to fall more than 20% after the election. Solid U.S. economic growth continues, with the S & P500 rallying 25% last year and 23% cumulatively this year.
Featured News
South Korean headline CPI came in slightly below expectations at +1.3% y/y in October, but the impact was limited and domestic interest rates fell on the back of the Trump trade reversal.
With financial conditions expected to ease further at home and abroad, Bank of Korea Governor Lee Chang-yong emphasized that households and businesses should be careful not to borrow excessively and allow funds to flow into unproductive sectors such as real estate.
Other News and Events
New Hampshire mountain towns start voting at 5 a.m. with a 'bang'; U.S. presidential election just started
The Fed's reverse repo balance decreased by $28 billion from the previous day to $144.2 billion. This is the lowest since May 3, 2021
[Response Strategy].
Following the outcome of the U.S. presidential election, it is important to monitor market conditions closely and formulate an appropriate response strategy. In particular, given concerns about the possibility of a Republican red sweep of the House and Senate, it is important to watch for upward pressure on interest rates from rising inflation coupled with deficits.
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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