|
Korean Fixed Income & Currency (July 9 – July 13, 2018) |
|
(Yield, Generic Government Bonds) 3y 2.105% (+0.004%) / 5y 2.341% (-0.011%) / 10y 2.556% (+0.001%) |
|
USDKRW 1123.5 (+0.68%) |
|
Comment |
|
As always, bullish movement followed plunge. With KOSPI +1.67%, FI markets was going through slump. But bearishness in government bonds was very limited because of proceeding volatilities in sets of risky assets and lowered expectation for economic growth during 2018 by BOK. Actually, 5y had shown bullish movement. Yield spread between 3y and 10y wasn’t showing big difference compared with last week. Although BOK didn’t raise their benchmark rate, foreigners kept entering into Korean FI market buying more than KRW88tn in government bonds and short-term monetary securities based on stable minus-swap-basis. KRW was weakened even though stock market goes up, implying that effects of proceeding trade-war keep going. I expect bullish stock market next week and preference for risky assets will be giving additional pressure to FI market. But the pressure will be limited continuously considering proceeding volatilities in global markets. I believe the weakness of KRW will be released with positive perspective of BOK, and technical bullishness. |
|
My opinions for this week are limited Bear in Korean Rate, and limited Bull in KRW. My bands for coming week are 3y Government bond 2.09 – 2.13 / 10y Government bond 2.54 – 2.58 / USDKRW 1,100 – 1,130 |
|
Mr. Banker, http://markety.tistory.com |
Korean FI and Currency from July 9 to July 13, 2018.pdf