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BoK Bond Purchases Lifts 10-Year Sector

SOUTH KOREA

KOREA RATES: Bonds under pressure in South Korea, 3-year futures down some 14 ticks at 111.05, but off earlier lows of 110.86. 10-year future is in positive territory, up 6 ticks at 126.99, off lows around 126.42.

  • 10-year is seeing a bid after the Bank of Korea announced it will buy up to KRW 2tn of government bonds via auction today to improve liquidity in the bond market, the bank announced in February it would buy KRW 5tn - 7tn of government bonds in the first half of 2021.
  • Vice Finance Minister Kim was on the wires earlier, saying South Korea will closely monitor market trends and take swift measures as the markets may continue to be volatile amid expectations for an economic recovery and concerns about inflation and rising interest rates.
  • South Korea's daily new coronavirus cases bounced back to above 400 on Tuesday as continued cluster infections and increased outdoor activity are feared to ignite another surge in virus infections. The country reported 446 new cases, daily infections stayed below 400 on Monday apparently due to less testing over the weekend after hovering above the threshold for two days, with 418 cases Saturday and 416 on Sunday.
  • Markets await the results of a KRW 1.1tn 2-year bond sale.

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