Treasury bond yields fell all at once in favor of safe assets… 3301 Comprehensive 3-year Treasury

As concerns about an economic slowdown continued and the preference for safe assets grew, KTB yields fell all at once on the 5th.

In the Seoul bond market, the yield of the 3-year government bond closed at 3.301% a year, down 12.9bp (1bp = 0.01% point) from the previous trading day.

The 10-year bond yield fell 11.0bps to 3.379% per annum.

The 5-year and 2-year bonds closed at 3.367% per annum and 3.328% per annum, down 13.0bps and 10.6bps, respectively.

The 20-year bond fell 11.9bp to 3.300% a year.

The 30-year and 50-year bonds fell 12.6 bps and 12.6 bps, respectively, to 3.168% per annum and 3.145% per annum.

Inflation appears to be rising sharply amid growing concerns about an economic downturn as the KOSPI recently hit a new low.

On the same day, Statistics Korea announced that the consumer price index for June was 108.22 (2020 = 100), up 6.0% from the same month last year.

This is the highest growth rate in 23 years and 7 months since November 1998 (6.8%) during the financial crisis.

The consumer price inflation rate stood at 2% for 6 months from April to September last year, then rose to the 3% level in October last year (3.2%), and then in March (4.1%), April (4.8%) and May (5.4%) of this year. %) and is increasing rapidly.

Although the inflation rate is steep, the possibility that the Bank of Korea will make a big step (a 0.50 percentage point increase in the base rate at a time) at the Monetary Policy Committee in July is growing.

This is because the BOK’s expected inflation rate for June rose 0.6 percentage points from the previous month to 3.9%, and the US Federal Reserve (Fed) hinted at the possibility of a giant step in July (a 0.75 percentage point increase in the base rate at a time). .

As a result, it is analyzed that bond yields, which have recently been on a downward trend due to concerns about an economic downturn, will not further increase the extent of the decline.

Kim Ji-an, a researcher at Samsung Securities, said, “Over the past few days, concerns about an economic recession have increased the overall rate of decline,” but said, “Until the end of the month, the decline widened further in a short period of time due to concerns about monetary policy meetings such as the Monetary Policy Committee and the Federal Open Market Committee (FOMC). There are limits to what it can be.”

However, he added, “Considering that the bond market is largely reflecting the path of monetary policy in the future, and the base rate hike has entered the second half of the year, a gradual stabilization of interest rates, centered on short-term bonds, may continue.”

┌─────────┬─────────┬────────┬────────┐
│ │ Same day (afternoon·%) │ Previous day (%) │ Compared to previous day (bp) │
├─────────┼─────────┼────────┼────────┤
│ KTB (1 year) │ 2.954 │ 2.959 │ -0.5 │
├─────────┼─────────┼────────┼────────┤
│ KTB (2 years) │ 3.328 │ 3.434 │ -10.6 │
├─────────┼─────────┼────────┼────────┤
│ KTB (3 years) │ 3.301 │ 3.430 │ -12.9 │
├─────────┼─────────┼────────┼────────┤
│ KTB (5 years) │ 3.367 │ 3.497 │ -13.0 │
├─────────┼─────────┼────────┼────────┤
│ KTB (10 years) │ 3.379 │ 3.489 │ -11.0 │
├─────────┼─────────┼────────┼────────┤
│ KTB (20 years) │ 3.300 │ 3.419 │ -11.9 │
├─────────┼─────────┼────────┼────────┤
│ KTB (30 years) │ 3.168 │ 3.294 │ -12.6 │
├─────────┼─────────┼────────┼────────┤
│ KTB (50 years) │ 3.145 │ 3.271 │ -12.6 │
├─────────┼─────────┼────────┼────────┤
│ Monetary Securities (2 years) │ 3.281 │ 3.383 │ -10.2 │
├─────────┼─────────┼────────┼────────┤
│Corporate bonds (3 years without guarantee) │ 4.128 │ 4.247 │ -11.9 │
│ AA- │ │ │ │
├─────────┼─────────┼────────┼────────┤
│ CD 91 days │ 2.050 │ 2.050 │ 0.0 │
└─────────┴─────────┴────────┴────────┘

/yunhap news

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