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Futures Gap Lower At The Open, Off Worst Levels

KOREA RATES

Futures gapped lower at the open but have come off worst levels, last down 9 ticks at 125.43, lows at 125.31 which denoted the lowest since a brief foray below 125.30 on May 3. The contract hasn't been convincingly below 125.30 since March.

  • Second Vice Finance Minister said yesterday South Korea plans to respond to potential volatility in the state bond market as global inflation concerns and other risk factors could spark instability in the debt market. He added the Korean bond market stabilized after high volatility sparked by a spike in US Treasury yields, but risk factors at home and abroad remain.
  • He cited bond supply situations, global inflation risks and cautions related to the early normalization of accommodative monetary policy as major risk factors for the bond market.
  • The MOF sold bonds worth KRW 50.4tn in Q1, some 27% of the planned yearly debt sale of KRW 186.3tn Foreign investors took up a net KRW 11tn of Korean government bonds in Q1, up from KRW 8.6tn in the previous quarter.

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