Korean rate swaps flat today as the.....>

KOREA RATES: Korean rate swaps flat today as the recovery off yesterday's lows

falters. The space continues to underperform relatively to global rates and

local equities.  2-years trade at 1.85%, down half a basis point while 10-years

trade up half a basis point at 1.88%.

- The ongoing weakness in oil prices is the main factor driving down rate

expectations as it has helped breakeven inflation expectations decline sharply

allowing real rates to stay firmly positive. 

- Korean CDS spreads have edged higher in recent days after moving back towards

cycle lows last month, and a large gap has opened up relative to US corporate

credit spreads.  

- Korean PM Moon has emphasized his government's commitment to support the

export sector with additional support for SMEs in the sector.