Hanwha Investment & Securities Report
"Limited Impact on Inflation Expected"
Hanwha Investment & Securities has predicted that interest rates could fall due to the situation between Iran and Israel.
Kim Sungsoo, a researcher at Hanwha Investment & Securities, explained, "On the 22nd, the United States conducted airstrikes on three nuclear facilities in Iran," adding, "For the first time in history, the United States struck the Iranian mainland, and it was also the first direct clash with Iran since the assassination of General Qasem Soleimani in 2020."
He continued, "Since 1990, international oil prices have risen during every crisis in the Middle East," and added, "Since the countries involved are oil producers, a rise in oil prices is inevitable."
He also analyzed, "Interest rates have generally fallen," and explained, "They tend to decline in the short term, but after six months, the preference for safe assets is largely reversed."
Kim predicted, "For a conflict to shake the market, there must be a direct blow to a major power," and anticipated, "The likelihood of the US mainland being affected is low." He explained, "It is more appropriate to view geopolitical issues as a source of temporary volatility rather than something that changes the market's direction," and added, "In the short term, there will be downward pressure on both the Korean and US government bond markets."
He further stated, "The decline in US Treasury yields, which are considered global safe assets, will be larger," and added, "We set the lower bound for the US 10-year yield at 4.20% and for the Korean 10-year government bond at 2.75%."
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