Government Bond Yields Mostly Fall... 3-Year Bond at 2.582%

Impact of Declining U.S. Treasury Yields

On the 6th, government bond yields mostly closed lower due to the decline in U.S. Treasury yields.

In the Seoul bond market that day, the 3-year government bond yield closed at 2.582% per annum, up 0.4 basis points (1bp = 0.01 percentage points) from the previous trading day. The 1-year yield rose 0.1bp to close at 2.660% per annum.

However, the 10-year yield fell 2.2bp to 2.796% per annum. The 5-year and 2-year yields dropped 1.4bp and 0.4bp, closing at 2.670% and 2.664% per annum, respectively.

The 20-year yield declined 2.8bp to 2.720% per annum. The 30-year and 50-year yields fell 0.9bp and 0.5bp, recording 2.661% and 2.568% per annum, respectively.

The overall decline in government bond yields was attributed to the previous day’s drop in U.S. Treasury yields. The 10-year U.S. Treasury yield in the New York market fell 9.30bp from the previous day to 4.4220% per annum. This was due to the January Services Purchasing Managers' Index (PMI) released by the Institute for Supply Management (ISM) falling below both the previous month’s figure and market expectations.

Meanwhile, foreign investors net sold 1,589 contracts of 3-year government bond futures and net bought 4,439 contracts of 10-year government bond futures that day.