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BOK Likely On Hold In August, But Local Yields Follow Tsys Lower

SOUTH KOREA
  • June IP Close To Expectations, But Positive Revisions Boost Y/Y. Korean I/P came in 0.5% for the m/m in June.
  • Details show the continued theme of a surge in semiconductor exports may be starting to tail off.
  • CPI came in ahead of expectations at 2.6%, giving further reason for the Bank of Korea to hold off on any policy movements.
  • Korean bonds took their lead from global moves over the week though. Being highly correlated to the treasury market, moves in yield lower disregarded the better-than-expected data.
  • Moves on the week were significant across the curve.

2yr 3.048% (-6bp) 5yr 2.946% (-9bp) 10yr 2.9844% (-12bp) 30yr 2.895% (-9bp)

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