Yields Close Mixed Ahead of Bank of Korea Meeting
Three-Year Bond at 2.478%, Ten-Year at 2.854%
Market Focuses on Forward Guidance as Base Rate Expected to Remain Unchanged
On July 9, government bond yields closed mixed within a narrow range, ahead of the Bank of Korea's Monetary Policy Board meeting scheduled for the following day.
On this day in the Seoul bond market, the yield on three-year government bonds ended at 2.478% per annum, up 0.1 basis points (1bp=0.01 percentage points) from the previous trading day.
The yield on ten-year bonds rose by 0.7 basis points to 2.854% per annum. The five-year and two-year bonds closed at 2.636% and 2.435% per annum, up 0.1 basis points and down 0.7 basis points, respectively. The twenty-year bond yield fell by 0.2 basis points to 2.843% per annum. The thirty-year and fifty-year bond yields declined by 0.4 basis points and 0.3 basis points, respectively, closing at 2.744% and 2.642% per annum.
The bond market on this day focused on the Bank of Korea's July Monetary Policy Board meeting scheduled for the next day. The market currently expects the Board to keep the base rate unchanged at 2.50% per annum. However, industry observers also emphasize the importance of paying attention to the forward guidance (advance notice of monetary policy) that the Board will provide, in addition to the decision on whether to maintain the current rate.
Meanwhile, foreign investors were net sellers of 3,991 contracts of three-year government bond futures and 9,477 contracts of ten-year government bond futures on this day.
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