SOUTH KOREA: Consumer Sentiment Edges Higher, So Do Inflation Expectations
Earlier the consumer sentiment reading for April printed. It nudged up to 93.8 from 93.4. We are up from late 2024 lows sub 90.0 for the index, but for much of the prior 12 months we were above 100, so consumer confidence is still to return to these levels.
- At face value this suggests a still tepid domestic demand backdrop. The BOK has noted this though, with its recent commentary stating that its February forecast for 2025 growth would be revised down.
- Carry over from political uncertainty, along with the trade/tariff outlook, have been headwinds for South Korean growth. The IMF revised down its 2025 growth forecasts for South Korea to 1%.
- The other focus point from this survey will be the tick up in inflation expectations. Consumers 12 month outlook rose to 2.8%, from 2.7%. We have been sticky just under this 3% level for expectations since the second half of last year.
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AUSSIE BONDS: ACGB Jun-54 Auction Results
The AOFM sells A$300mn of the 4.75% 21 June 2054 Treasury Bond, #TB169:
- Average Yield (%): 4.9874 (prev. 4.9405)
- High Yield (%): 4.9925 (prev. 4.945)
- Bid/Cover: 2.7067x (prev. 3.6500x)
- Allotted at Highest Accepted Yield as % of Bid at that Yield (%): 48.0 (prev. 23.5)
- Bidders: 58 (prev. 58), 30 successful (prev. 22), 21 allocated in full (prev. 15)
JGB TECHS: (H5) Within Range of Fresh Cycle Lows
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 142.73/144.48 - High Dec 9 / High Nov 11
- PRICE: 138.12 @ 16:12 GMT Mar 21
- SUP 1: 136.67 - 1.0% 10-dma envelope
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs have traded lower breaching recent key support at 138.71, the Feb 21 low. This confirms a resumption of the bear leg and note too that MA studies are in a bear-mode set-up, highlighting a downtrend. Sights are on 136.57, a Fibonacci projection. For bulls, a show through 140.33 resistance would signal a possible reversal, and open early December highs should the pace be maintained. 144.48 is the medium-term target on any recovery.
AUSSIE BONDS: Jun-54 Supply Faces A Similar Yield But A Steeper Curve
Bidding at today’s A$300mn of the 4.75% 21 June 2054 Treasury Bond is likely to be shaped by several key factors:
- The outright yield is around the same level as the previous auction level but around 15bps lower than the January high.
- The 3/10 yield curve has steepened around 5bps since the last auction and hovers near its steepest level since mid-2022.
- Demand for duration should be supported by the improvement in sentiment toward longer-dated global bonds, which has strengthened since mid-January despite some deterioration over recent weeks.
- Results are due at 0000 GMT / 1100 AEST.
