Yields Rise Across All Maturities as Market Awaits Powell's Speech
Investors Remain Cautious Ahead of Key Policy Events and Budget Announcement
As the market closely monitors the message to be delivered by Jerome Powell, Chair of the US Federal Reserve, on August 22, yields on Korean Treasury bonds rose across all maturities by the end of the day. Bond yields and prices move in opposite directions.
On this day in the Seoul bond market, the yield on three-year Treasury bonds closed at 2.456% per annum, up 1.8 basis points (1bp=0.01 percentage point) from the previous trading day. The yield on 10-year bonds rose by 1.5bp to 2.860% per annum. The yields on five-year and two-year bonds increased by 1.9bp and 0.5bp, respectively, closing at 2.624% and 2.382% per annum. The yield on 20-year bonds rose by 1.5bp to 2.871% per annum.
The yields on 30-year and 50-year bonds each increased by 1.6bp, finishing at 2.766% and 2.649% per annum, respectively.
Employees are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul, on the 22nd. Photo by Yonhap News
At around 11 p.m. Korean time, Jerome Powell is scheduled to deliver a speech at the annual Jackson Hole Economic Policy Symposium for central bank governors. There is little expectation that he will signal a preference for monetary easing.
Shin Eol, a researcher at SangSangIn Securities, stated, "According to the minutes of the Federal Open Market Committee (FOMC), the Fed is highly cautious about the potential for tariff-driven expected inflation to become entrenched as an upward factor for actual prices," adding, "Considering that Chair Powell is holding firm despite pressure from the White House and the Republican Party, it is unlikely that he will shift to a dovish stance."
In addition, with the Bank of Korea's Monetary Policy Board meeting and the announcement of next year's budget bill scheduled for the end of this month, investors are likely to be hesitant to take aggressive trading positions. In the case of the budget bill, the size of government spending directly impacts the scale of Treasury bond issuance and market supply-demand conditions, drawing significant attention from market participants.
Researcher Shin commented, "The bond market may react somewhat sensitively to negative factors next week."
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