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Futures And Yields Lower

KOREA

Futures are slightly lower, 10-year future down 6 ticks but within yesterday's range, last at 126.09. In the cash space yields are lower in early trade with some flattening seen.

  • South Korean President Moon's Democratic Party has suffered its worst defeat in five years in two major mayoral elections. Conservative candidate Oh Se-hoon has won in Seoul, while in Busan Park Hyung-jun of the conservative People Power Party came out on top. The results are a troubling sign for Moon less than a year ahead of a presidential vote. Markets will attempt to predict what a change in government could mean for fiscal policy. The popularity of President Moon Jae-in and his party has plummeted to record lows in recent months due to sex abuse scandals, rising house prices and deepening inequality.
  • On the coronavirus front South Korea was the latest country to impose conditions on the Astra Zeneca vaccine, it is now barred from use in people under 60. South Korea's drug safety agency on Wednesday approved the COVID-19 vaccine by Johnson & Johnson's Janssen. New cases remain elevated, South Korea reported 668 cases yesterday, the most since early January. Authorities have warned that the country may see the daily caseload of over 600 amid increased spring travel and loosened vigilance against the virus, signaling that enhanced virus curbs may be adopted to stem the further spread of COVID-19, health officials have warned the daily tally could rise over 700 in the coming days. Local authorities plan to release new social distancing guidelines, which will be implemented starting next week.
  • Elsewhere, data from Bloomberg showed foreign buying of South Korea's bonds accelerated in the past week alongside an increase in yields and a stronger won. The 5-day moving average of net foreign inflows increased to $545.1m, rising above the 20-day average of $527.4m.

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