China’s Bonds Cheaper, South Korean Bond Curve Bull-Steepens

Asian Government Bonds are mixed, with China cheaper but South Korea richer.

• China government bonds are dealing 2-3bps cheaper across benchmarks despite a South China Morning Post story stating that “Beijing set to overhaul its monetary tools by restarting treasury bonds purchases in the secondary markets".
• "China's central bank and finance ministry are expected to dovetail efforts to support the economy as fiscal policies take on a crucial role, according to a former People's Bank of China official.”
• South Korean sovereign bond curve has bull-steepened, with yields flat to 3bps lower after “South Korea’s central bank and finance ministry agreed with the National Pension Service to expand the size of a currency swap deal, as the won weakened to a two-month low” (per BBG).
• “The size of the swap deal will be expanded to $50b from $35b until the end of 2024, the Bank of Korea said in a statement on Friday. NPS is a big player in the FX market as it seeks to expand its investment overseas. Authorities expect the agreement to help ease supply-demand imbalances in the foreign exchange market in case of market instabilities, the statement said.”