Possibility of US rate hike rattles Korean bonds, exchange rates and stocks
As the possibility of a rate hike expanded on strong US employment data, volatility increased in Korea’s bond, foreign exchange and stock markets. US 2-year Treasury yield surged 10.40basis points from the previous day, and nonfarm payrolls in 5 increased by 172,000 from the previous month.
6Korean bond, foreign exchange and stock market volatility expanded. The possibility of a US rate hike has been cited as one factor behind the recent increase in volatility. The market believes that changes in the rate outlook could affect capital flows.
US 5 nonfarm payrolls increased by 172,000 from the previous month. This is more than double the market expectation of 85,000. Strong employment data increased rate sensitivity.
The US 2-year Treasury yield surged 10.40 basis points from the previous day. Short-term rates moved rapidly amid lingering inflation concerns. This movement spilled over into global capital flows.
The market has raised the possibility that if the United States raises interest rates, funds held outside the United States could flow back into the country. In South Korea, rising bond yields and a weaker won were observed. Stock markets showed mixed gains and losses by sector.
Bond market participants are closely watching short-term interest rate changes. In the foreign exchange market, demand for the dollar was seen to be increasing. In the stock market, foreign investor flows and differentiation by sector emerged.
6The day's indicators and interest rate movements prompted investors to check the next U.S. employment data and the schedule of interest rate-related announcements. Market volatility could expand again when major indicators are released in the future. Market participants are watching the announcement schedule and indicator figures.
Sources: 연합인포맥스
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