Futures Higher As Sentiment Sours & Issuance Lowered

Futures are higher today, moving higher amid a decline in equity indices and a reduced slat of sovereign bond issuance in August. 3-Year future is up 9 ticks at 110.27, 10-Year future is up 17 ticks at 128.17; both contracts are near session highs after initially dipping into negative territory. In the cash space yields are lower across the curve with bull steepening seen. 2-/10-Year spread is 0.5bps wider. The won has given back earlier strength as sentiment in the region turns negative, shaking off strong industrial production data earlier in the session.

• The South Korean MOF will sell KRW 12.5tn of government bonds in August, down from KRW 17.9tn in July. A total of KRW 176.4 trillion will be sold this year as South Korea seeks to finance fiscal spending to cope with the pandemic. Full details can be found in an earlier bullet.
• US/SK 2-Year yield spreads are hovering around recent levels at 113.82bps from lows of 119.625bps earlier in July. US yields have declined in Asia trade as equity futures turn negative after disappointing guidance from Amazon in after hours earnings.