7Ahead of the Monetary Policy Board meeting on Monday (16day) bond market volatility is expected to widen
This week (7Monday 13~16Friday) the Seoul bond market is7Monday 16day Monetary Policy Board decision is likely to increase volatility. If an interest-rate hike is carried out, it will be2023year 1month since3year 6months of tightening. The market is watching for hints on whether there will be back-to-back hikes and the level of the final policy rate to be reached next year.
This week (7Monday 13~16Friday) the Seoul bond market is7Monday 16day Monetary Policy Board decision is expected to increase volatility. The reason is that bond yields and rate expectations could be quickly repriced around this meeting.
The Monetary Policy Board has made it all but certain that a base-rate hike is possible on 7Monday 16day. If the hike is decided, it would be2023year 1month since3year 6months of tightening.
Market attention goes beyond whether the rate will simply be raised.7Month and 8month consecutive hikes, the so-called back-to-back move, are drawing attention.
Another point to watch is the hint about the final policy rate to be reached next year. At the committee’s remarks, efforts to infer the policy path ahead are expected to follow one after another.
The movement in the dollar-won exchange rate is also a variable. Recently, the dollar-won exchange rate has 1,500fallen below won, and this is being viewed as having affected it in a way that lowers the likelihood of back-to-back moves.
For that reason, the market’s reaction in the bond market and the foreign exchange market this week is drawing particular attention. The wording and remarks at the press conference released immediately after the BOK decision are highly likely to determine the market’s direction.
Sources: 연합인포맥스
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