Government bond yields bull-flattened in response to strength in short-term credit
10In the morning, government bond yields fell across the board, with larger declines concentrated in longer maturities. 3year 3.769%, 10year 4.242%, 30year 4.437%(as of 11 hour 24 minutes in the morning), the yield curve flattened. The backdrop was short-term credit buying amid a wait-and-see stance ahead of the Monetary Policy Board meeting.
Government bond yields 10fell across the board in the morning. The decline in yields was larger for longer maturities, resulting in a bull flattening that made the yield curve more gradual.
As of 11 hour 24 minutes in the morning, the benchmark government bond yield for the 3-year maturity traded at 1.1 basis points below the previous day's indicative market yield, at 3.769%. The 10-year maturity fell 2.0 basis points to 4.242%, while the 30-year maturity dropped 2.5 basis points to 4.437%.
Market participants adopted a wait-and-see stance ahead of the Monetary Policy Board meeting, the Bank of Korea's Financial Monetary Board. Meanwhile, buying flowed into the short-term credit market, reviving demand for short-term maturities.
Overseas flows also had an impact. As Japanese government bonds (JGBs) plunged, particularly at the long end, domestic interest rates also fell in tandem.
The Seoul bond market pointed to buying activity concentrated in the short-term segment.3year government bond futures rose.
The observations on this day reflect a temporary market trend. Changes in interest-rate indicators and credit trading flows may still create additional volatility in conjunction with the Monetary Policy Board's decision at a later date.
Sources: 연합인포맥스
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