Vaccine News Sparks Short End Selling; 50-Year Auction Eyed

Some more headlines crossing the wires, some vaccine related news that South Korea had secured enough doses to vaccinate as many as 44 million people through deals with AstraZeneca, Pfizer, Johnson & Johnson and Moderna. Imports of the vaccine are expected to start in February/March. The health ministry adds there is no deal on Chinese or Russian vaccines.

• Elsewhere, South Korean President Moon held a cabinet meeting today, saying afterwards that the nation is considering becoming a member of a major Asia-Pacific free trade agreement, known as the CPTPP, as part of efforts to diversify its export market.
• The yields across the curve in South Korea are mixed today. The vaccine reports sparked some selling in the short end as near term concerns were alleviated, 12 month paper seeing yields rise 11.3bps, the 5-year sector has outperformed - yields some 2.2bps lower after a strong 5-year auction yesterday, while 20-year yields are down around 2bps.
• The 3-/30-year spread continues its move wider, last at 77.90bps, some 15bps wider than the start of December.
• The South Korea will sell 50-year bonds to the tune of KRW 350bn on Friday, which helps explains underperformance in 30-year yields at 0.4bps higher.
• The KOSPI has come off recent highs and is around 1% lower today at 2718 which again fits the narrative of lower yields.