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  • Futures higher in early trade in South Korea, 10-year contract sharply higher from the open at 128.02, up 22 ticks after declining from contract highs at 128.37 earlier this week. 3-Year future up 5 ticks at 110.31, weighed down by BoK rate hike expectations.
  • In the cash space yields are lower in early trade, which a touch of bull steepening evident; US cash tsys are closed due to the Japanese market holiday but 10-year US-SK spreads, though off recent highs of 80bps remain in an upward trend at 64.28bps from a low of 27bps in April. During the same period the South Korean 2-/10-Year spread has declined from 112bps to 64bps as markets seek the safety of bonds during the COVID-19 resurgence while balancing rate hike expectations.