10-Year Bond Yield at 3.6% Level After 4 Months
The Seoul bond market faced downward pressure due to the sharp decline in U.S. Treasury prices (interest rate rise), the depreciation of the Korean won, and geopolitical tensions in the Middle East.
On the 16th, the 3-year Treasury bond yield closed at 3.469% per annum, up 2.9 basis points (1bp = 0.01 percentage points) from the previous trading day.
The 10-year yield rose 5.7bp to 3.618% per annum. The 5-year and 2-year yields increased by 3.8bp and 2.3bp, closing at 3.532% and 3.490% per annum, respectively.
This is the first time in about four months since early December last year that the 10-year yield has surpassed the 3.6% level. The 3-year and 5-year yields also recorded yearly highs.
On the 14th, the KOSPI index rose more than 1% in early trading to the 2,540 level due to the possibility of a U.S. interest rate cut next year. Dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@
The 20-year yield rose 3.9bp to 3.522% per annum. The 30-year and 50-year yields increased by 3.6bp and 3.5bp, respectively, closing at 3.426% and 3.403% per annum.
The 3-year corporate bond yield with a credit rating of 'AA-' rose 2.7bp to close at 4.010%. The yields on 91-day negotiable certificates of deposit (CDs) and commercial paper (CP) remained unchanged from the previous day.
The bond market weakness on this day was influenced by the sharp drop in U.S. Treasury prices the day before. In the Seoul foreign exchange market, the won-dollar exchange rate broke through the psychological resistance level of 1400 won for the first time in 17 months during the session. Foreign investors net sold about 8,000 contracts of 3-year and 12,000 contracts of 10-year Treasury futures, respectively.
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