South Korea 10-Year Yield Hits 6-Week Low
South Korea’s 10-year government bond yield fell to around 4.25% in mid-October, its lowest in six weeks, as bonds rebounded following government measures to curb volatility. Authorities warned of intervention and cut planned government bond sales for October by 5 trillion won ($3.74 billion) to contain rising yields. Nevertheless, upward pressure on yields persists amid inflation concerns fueled by elevated oil prices and a broader global bond selloff, while stronger-than-expected economic growth driven by the semiconductor boom adds to price pressures. Won swaps are pricing in about a 70% chance of cumulative 50 bps in Bank of Korea rate hikes over the next six months, following back-to-back increases that lifted the policy rate to 3%. Markets are focused on the October 22 policy meeting, where the central bank may hold rates before potentially resuming tightening in November.
25% in mid-October, its lowest in six weeks, as bonds rebounded following government measures to curb volatility. 74 billion) to contain rising yields. Nevertheless, upward pressure on yields persists amid inflation concerns fueled by elevated oil prices and a broader global bond selloff, while stronger-than-expected economic growth driven by the semiconductor boom adds to price pressures. Won swaps are pricing in about a 70% chance of cumulative 50 bps in Bank of Korea rate hikes over the next six months, following back-to-back increases that lifted the policy rate to 3%.
Markets are focused on the October 22 policy meeting, where the central bank may hold rates before potentially resuming tightening in November.