Futures Dip Amid Benign Risk Environment

Futures lower on Thursday as risk assets rebound in South Korea thanks to a generally more benign risk tone and a dip in coronavirus case numbers. 10-Year futures have been grinding lower throughout the session after finishing at highs yesterday. 10-Year future is down 25 ticks at 125.19, off lows at 128.10, 3-Year future down 5 ticks at 110.20.

• Short end US-South Korea spreads are slightly wider after the FOMC decision. US-SK 2-Year spread at 113.82bps from lows of 119.625bps hit earlier in July. Following the FOMC decision yesterday Vice Fin Min Lee said that the announcement was expected to have little impact on local markets and added that the government was closely watching the virus trend and its impact on markets as well as other instability factors.
• Positive risk sentiment has been boosted by earnings including Samsung who reported earnings earlier today, the Q2 report was robust thanks to strong performance in the semiconductor business and saw earnings beat consensus. The chip business anchored the upbeat performance on the back of rising memory prices and a recovery from the foundry sector. The company had suffered from a monthlong shutdown of the company's foundry fab in Austin, Texas, where a severe winter storm caused a power outage in February.