Bonds Supported As Coronavirus Situation Remains Troublesome

Bonds supported and yields lower across the curve, flattening seen with 10-year yield down 2bps, 2-/30-year spread 1.5bps tighter. Futures 40 ticks higher at 126.88, highest since March 29.

• A focus today will be the outcome of the National Pension Service meeting where the management committee will discuss rebalancing of domestic stock investments. The NPS was supposed to make the decision two weeks ago but delayed after receiving criticisms from the stock investors over the selling streak of the fund. The current target for stock exposure is 16.8%, the allocation could reach 20.3%, while individual allocation could be increased from 2.0% to 3.5%.
• South Korea has announced it will maintain current social distancing measures, while an announcement of stricter measures in infection hotspots is pending. In an effort to stem cluster infections at risk-prone facilities, authorities decided to suspend the business of clubs, bars and other entertainment establishments in Seoul. There were 671 new cases today, down from 700 yesterday which denoted the highest since early January. Authorities have been grappling with the rising number of new cases sparked by increased spring travel and loosened vigilance against the virus and warned previously that enhanced virus curbs may be adopted to flatten the curve. The health ministry said it will decide officially over the weekend whether to resume the use of the AstraZeneca vaccine after suspending it for those under 60 earlier this week.
• After losing in two major local elections earlier this week, the leaders of the ruling Democratic Party have resigned en masse to take responsibility for the shocking rout in this week's by-elections. "Taking responsibility for the results of the elections, all (members of) the DP leadership are stepping down," Rep. Kim Tae-nyeon, the party's acting chairman and floor leader, said. The party will hold a convention to pick a new chairman on May 2, a week earlier than initially planned, and an election for a new floor leader on Friday next week, according to party officials.