Korea Bond Market Daily Report(Gemini): 9/30/2024
Korea Bond Market Daily Report
Treasury yields
| Treasury yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 3Y KTB | 2.83% | ▲ 1.9 | ▼ 41.4 | ▼ 105.8 |
| 10Y KTB | 3.00% | ▼ 0.1 | ▼ 30.6 | ▼ 103.0 |
| Term Spread(bp) | 17.4 | ▼ 2.0 | ▲ 10.8 | ▲ 2.8 |
| Corp. AA- 3Y | 3.41% | ▲ 1.4 | ▼ 57.1 | ▼ 124.9 |
| Credit spread(bp) | 58.3 | ▼ 0.5 | ▼ 15.7 | ▼ 19.1 |
US Treasury Yields
| US Treasury Yields | Recent | DoD (bp) | YTD (bp) | YoY (bp) |
|---|---|---|---|---|
| 2Y US Treasury | 3.60% | ▲ 7.0 | ▼ 73.0 | ▼ 144.0 |
| 10Y US Treasury | 3.79% | 0.0 | ▼ 16.0 | ▼ 77.0 |
| Term Spread(bp) | 19 | ▼ 7.0 | ▲ 57.0 | ▲ 67.0 |
[Market Trends].
TGA declined again to $778.9 billion; the benchmark fell to $3.14 trillion, below the $3.2 trillion mark; and reverse repo balances expanded further to $436.5 billion.
PCE inflation rose 0.1% MoM and 2.2% YoY in August, missing both expectations (0.2% MoM and 2.3% YoY) and the prior month (0.2% MoM and 2.5% YoY). Core PCE rose 0.1% MoM, missing expectations and the prior month by 0.1 percentage points.
[Top economic news and events].
Top U.S. News
Stocks closed mixed in New York, with the Dow closing up 0.33%, but the S & P500 and Nasdaq closed down 0.13% and 0.39%, respectively.
PCE inflation rose 0.1% MoM and 2.2% YoY in August, missing both expectations and the prior month. Core PCE rose 0.1% MoM, missing expectations and the prior month by 0.1 percentage point.
Featured News
South Korean equities ended mixed on news of slowing US PCE inflation, with the Dow closing higher, but the S & P500 and Nasdaq declining. Japanese government bond yields opened weaker on news of US Treasury rate hikes and the election of Shigeru Ishiba as LDP governor, but came under pressure on news of slowing September consumer inflation in France.
Foreign investors were net sellers of both Treasury futures, with the 3-year ending at 2.82%, up 1 basis point from the previous trading day, and the 10-year at 2.997%, down 0.3 basis point from the previous trading day.
Other News and Events
PCE inflation in August was 0.09% (1.09% annualized), down from July (0.15%), and below our estimate (0.18%) and the consensus (0.2%).
French CPI inflation came in at -1.2%MoM in September, sharply below expectations (-0.7%) and the previous month (0.5%), putting bullish pressure on US Treasury rates.
[Response Strategy].
Slowing U.S. PCE inflation and improving consumer sentiment could reduce uncertainty about the Fed's monetary policy. However, the trend of slowing inflation is not yet clear, and the labor market remains strong, making it difficult to predict when the Fed will cut rates. Investors will need to keep an eye on future economic data releases and comments from the Fed.
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-reportgemini-9-30-2024/
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