Despite the KOSPI rebound, Treasury bond interest rates drop all at once... 3-year bond lowest in 2 months (comprehensive)

(Seoul = Yonhap News) Reporter Kim Tae-jong = Treasury bond interest rates all fell on the 27th despite the rapid rebound in the domestic stock market.

On this day, in the Seoul bond market, the three-year maturity treasury bond interest rate closed at 3.758%, down 3.1bp (1bp = 0.01% point) from the previous trading day. This is the lowest level since August 27 (3.755% per year).

The 10-year interest rate fell 4.2bp to 4.032% per year, hitting the lowest since May 11 (3.950%).

The 5-year and 2-year notes fell 3.3bp and 2.3bp, respectively, and closed at 3.899% and 3.716% per year.

The 20-year yield fell 1.9bp to 4.145% per annum. 30-year and 50-year notes fell 2.0bp and 1.7bp, respectively, recording an annual rate of 4.151% and 4.198%.

On this day, the domestic stock market rose significantly, with KOSPI rebounding by 3.09%, but Treasury bond interest rates continued to decline and closed.

Usually, when the stock market rises, preference for risky assets strengthens, bonds, which are classified as relatively safe assets, weaken and interest rates rise.

The decline in government bond interest rates on this day is interpreted to be due to the influence of net purchases by foreigners.

On this day, foreigners net purchased 1,812 contracts of 3-year government bond futures and 2,721 contracts of 10-year government bond futures.

Ahn Ye-ha, a researcher at Kiwoom Securities, said, "Foreigners are showing strength as they continue to buy futures. Considering the rebound in stock prices, government bond interest rates are moving according to foreign supply and demand, and without foreign supply and demand, it is difficult for the interest rate to go down."

He added, “It appears that foreigners are purchasing (government bonds) after confirming that the base interest rate upper limit is 3.5% per annum.”

It is said that foreigners believe that the risk of the base rate rising further after peaking at 3.5% per annum is decreasing, and the possibility that the price of government bonds will rise is increasing.

Today (afternoon, %) Previous day (%) Compared to previous day (bp) Treasury bonds (1 year) 3.622 3.658 -3.6 Treasury bonds (2 years) 3.716 3.739 -2.3 Treasury bonds (3 years) 3.758 3.789 -3.1 Treasury bonds (5 years) 3.899 3.932 -3.3 Treasury bonds (10 years) 4.032 4.074 -4.2 Treasury bonds (20 years) 4.145 4.164 -1.9 Treasury bonds (30 years) 4.151 4.171 -2.0 Treasury bonds (50 years) 4.198 4.215 -1.7 Monetary stabilization bonds (2 years) 3.737 3.765 -2.8 Corporate bond (3 years unsecured) AA- 4.447 4.476 -2.9 CD 91-day contract 3.270 3.260 +1.0