Yesterday marked the third..............>

KOREA RATES: Yesterday marked the third consecutive day that Korean 10-year bond

futures failed to maintain gains above the 125 level, dropping to 124.91

currently, raising the prospect of a bearish reversal. 

- This has seen Korea-US 10-year yield spreads trade near 1-month highs,

currently at -85.3bps. 

- Interest rate swaps remain under downward pressure though as the 2-year

remains capped by its 21-dma at 1.8776%, last trading at 1.8675%. 

- Real yields continue to see upside pressure thanks to the ongoing drop in

breakevens, which fell to 3-month lows yesterday of 0.94%. Meanwhile, the

10-year CDS has recovered from recent highs, dropping 3.5bps yesterday to trade

at 66.3bps, even as US corporate credit spreads continued to push higher.