Korean interest rate swap markets are...>

KOREA RATES: Korean interest rate swap markets are resuming their uptrend after

returning from a three-day holiday, with the 2-year trading at new monthly highs

of 1.96%, bucking the slight drop seen in US following the Fed meeting. Rising

equities, with the Kospi up 0.7%, is helping as the downtrend from the May high

has now fully given way suggesting further gains ahead. 

- Speculation is growing that the BOK will resume its hiking cycle over the

coming months, with the next meeting scheduled for October 18. Most analysts are

penciling in a hold next month but a hike by the end of the year. 

- Comments made earlier today by BOK governor Lee that inflation and the job

market are not conducive to rate hikes just yet do not appear to be weighing on

sentiment. With more forward looking indicators pointing to a rise in inflation

and stabilisation in the labour market, the uptrend in rates looks set to

continue.