Fixed Income & Currency
(yields, Generic Government Bonds) 3y 2.101% (-0.021%) / 5y 2.352% (0.000%) / 10y 2.555% (-0.001%)
USDKRW 1115.9 (+0.12%)
Comment
Unlike my expectation, risk-aversion had shown in the market with KOSPI -2.29% during a week.
But degree of the aversion was very limited, just minus 1.2bp in 10y.
In OTC markets, foreigners were buying government bonds KRW410bn.
Ironically, this preference for Korean bonds is showing that there would be no huge outflow from the region in near future.
The inflow proved that Korea is still attractive market for foreigners in spite of recent worry to huge cirsis to EM.
During market hour, the plummeting in regional stock market didn't come up with panic sell.
Remaining spread of KR 3s10s in 0.4-0.5 band is also positive factor to the markets.
I still believe global bull momentum isn't dead yet, and KOSPI200 could recover 300 during this week, considering future and option expiring date which bring the greatest volatility to both side - up and down - is included in this week.
But aftershock will be preserved in the FI market.
My opinions for this week are Halt in Korean Rate, and Bull in KRW.
My bands for coming week are:
3y Government bond 2.08 - 2.11 / 10y Government bond 2.52 - 2.56 / USDKRW 1,090 - 1,120.