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Yields Lower Despite A Hawkish Lean From The BoK

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The South Korean Sovereign Bond curve has bull-steepened following today’s BoK Policy Decision, with yields flat to 2bps lower beyond the 1-year.

  • This came despite the BoK outcome leaning hawkishly. One member was in favor of rate cuts in the next 3 months, but the other 5 board members favoured steady rates (at 3.50%). Core inflation is forecast at 2.2% for this year, as projected previously.
  • BoK Governor Rhee stated it was unclear when the central bank would start discussing rate cuts. Hence it seems unlikely a consensus will be achieved in the next few months. Equally, Rhee noted a rate hike was unlikely at the current juncture. (See MNI link)
  • Looking ahead, the data calendar is fairly light for South Korea, with retail sales figures due next week.
  • China Government Bonds are also dealing slightly richer across benchmarks today. Local catalysts were light on the ground today.
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The South Korean Sovereign Bond curve has bull-steepened following today’s BoK Policy Decision, with yields flat to 2bps lower beyond the 1-year.

  • This came despite the BoK outcome leaning hawkishly. One member was in favor of rate cuts in the next 3 months, but the other 5 board members favoured steady rates (at 3.50%). Core inflation is forecast at 2.2% for this year, as projected previously.
  • BoK Governor Rhee stated it was unclear when the central bank would start discussing rate cuts. Hence it seems unlikely a consensus will be achieved in the next few months. Equally, Rhee noted a rate hike was unlikely at the current juncture. (See MNI link)
  • Looking ahead, the data calendar is fairly light for South Korea, with retail sales figures due next week.
  • China Government Bonds are also dealing slightly richer across benchmarks today. Local catalysts were light on the ground today.