Futures Regain Poise

After plunging on Friday futures have regained some poise today. The 10-year future last up 27 ticks at 126.56, retracing around half of the decline from 126.90.

• The 5-year auction was well received, cover for the issue rose despite the higher sale size and lower yield.
• Elsewhere, the MOF said it plans to issue KRW 300bn each of 2-, 3-year bonds in April on a non-competitive basis. This compares to KRW 600bn total in 2-,3- and 30-year bonds in March. The non-comp sales are part of the yield curve monitoring exercise the MOF flagged in March.
• There are reports on Friday that South Korea's ruling Democratic Party will discuss cash handout for all citizens. Lawmaker Lee said in a party meeting that emergency cash handout for all citizens created a virtuous cycle last year by revitalizing regional economies and domestic demand. It remains to be seen how it will be funded. There have already been a number of special budgets to finance stimulus measures, the extra issuance associated with this has pushed yields higher.
• In the coronavirus front South Korea reported 500 daily new virus cases, falling back below 600 on Monday for the first time in six days due to fewer tests over the weekend as health authorities accelerated the country's inoculation drive. Monday's figure was sharply down from 644 the previous day and 785 on Saturday. Health officials have designated this week as a special period to stop the current pace of the outbreak. Dining-in by civil servants will be banned, and working from home as well as working half time or part of business hours will be expanded in the public sector, the authorities said. They added that tougher rules will be considered if the current infection trend continues. There were reports over the weekend that South Korea had signed an additional deal with Pfizer for a further 40 million doses, bringing the total it has procured from various manufacturers to 192 million, or enough for 99 million people, almost double its population. As it stands, only 4% have had the jab though.