SOUTH KOREA: Country Wrap: Govt Bond Issuance Raised
May-08 05:24
- South Korea revises 2025 government bond issuance plan to KRW207tn vs initial plan of KRW197.6tn, reflecting extra budget, finance ministry advised yesterday. Of the total, 55-60% will be issued in 1H and ratio of bonds of 20-year or longer vs initial plan has increased. Ratio of bonds with 2-3 year tenures to account for 27-33% of total issuance in 2025, same with initial plan; those with 5-10 year tenures will make up 27-33% of the total vs initial plan of 32-38%. Ratio of bonds of 20-years or longer will consist of 35%-45% of issuance vs 30-40%. Korea’s 10YR government bond yield began the year at 2.87% and sits at 2.59% delivering strong returns for investors.
- South Korea to hold weekly meeting to review macroeconomy and financial issues as major countries’ trade negotiations and geopolitical tensions pose uncertainties, Acting Finance Minister Kim Beom-seok says in a meeting. (source BBG)
- As the government announced an increase in bond issuance to support the economy the KOSPI reacted rising +0.55% mirroring yesterday's gains.
- The Won lost ground today, down -0.44% to 1,397.40
- Bonds move higher in yield across the curve upon the issuance announcement. KTB 10YR 2.63% (+3bps)
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EURGBP TECHS: Holding On To Its Gains
Apr-08 05:24
- RES 4: 0.8645 High Apr 23 ‘24
- RES 3: 0.8625 High Aug 8 ‘24
- RES 2: 0.8604 1.382 proj of the Mar 3 - 11 - 28 price swing
- RES 1: 0.8593 High Aug 14 ‘24
- PRICE: 0.8584 @ 06:23 BST Apr 8
- SUP 1: 0.8470/0.8397 Low Apr 7 / 20-day EMA
- SUP 2: 0.8316 Low Mar 28 and a key near-term support
- SUP 3: 0.8299 Low Mar 5
- SUP 4: 0.8251 Low Mar 4
EURGBP maintains a bullish tone and the cross is holding on to its latest gains. A key resistance at 0.8474, the Jan 20 high, has been cleared. The breach of this hurdle highlights an important technical break and strengthens a bullish condition. Sights are 0.8593 next, the Aug 14 ‘24 high. On the downside, firm support lies at 0.8397, the 20-day EMA. The cross is overbought, a pullback would allow this condition to unwind.
LOOK AHEAD: UK Timeline of Events (Times BST)
Apr-08 05:23
| Date | UK | Period | Event |
| 08-Apr | 1700 | - | BoE's Lombardelli 'What can the UK learn from the US' |
| 10-Apr | 0001 | Mar | RICS House Prices |
| 10-Apr | 1400 | - | BoE's Breeden at MNI ‘UK economic and Financial Stability prospects’ |
| 11-Apr | 0001 | Mar | KPMG/REC Jobs Report |
| 11-Apr | 0700 | Feb | Monthly activity data |
| 11-Apr | - | - | BoE's Saporta 'How financial crisis reshape market and strategies’ |
| 12-Apr | - | - | BoE's Greene ‘The dynamics of monetary policy’ |
| 15-Apr | 0001 | Mar | BRC-KPMG Shop Sales Monitor |
| 15-Apr | 0700 | Feb/Mar | Labour Market Survey |
| 16-Apr | 0700 | Mar | CPI / PPI |
| 23-Apr | 0001 | Mar | Brightmine pay deals for whole economy |
| 23-Apr | 0700 | Mar | Public Sector Finances |
| 23-Apr | 0730 | FY25/26 | DMO remit revision following FY24/25 CGNCR |
| 23-Apr | 0930 | Apr | Flash PMIs |
| 24-Apr | 1100 | Apr | CBI Industrial Trends |
| 25-Apr | 0001 | Apr | Gfk Monthly Consumer Confidence |
| 25-Apr | 0700 | Mar | Retail Sales |
AUSSIE BONDS: Cheaper But At Bests, RBA Gov Speech Tomorrow
Apr-08 05:20
ACGBs (YM -4.0 & XM -11.5) are cheaper but at session highs after a paring of yesterday’s losses by US tsys in today’s Asia-Pac session. Cash US tsys are showing a bull-steepener, with benchmark yields 2-5bps lower.
- US economic data remains light today. Markets are looking ahead to Wednesday's release of the March FOMC minutes, followed by CPI data on Thursday and PPI on Friday.
- Domestically, Westpac's measure of consumer confidence sank 6% m/m in April to 90.1 down from 95.9 in March, which had been boosted by February's rate cut.
- Meanwhile, NAB's March business survey was little changed from February with confidence down 1 point to -3 and conditions up 1 point to +4.
- Cash ACGBs are 4-11bps cheaper with the AU-US 10-year yield differential at +8bps.
- Swap rates are 3-8bps higher, with the 3s10s curve steeper.
- The bills strip has bear-steepened, with pricing -3 to -6.
- RBA-dated OIS pricing is 4-8bps firmer across meetings today. A 50bp rate cut in May is given a 46% probability, with a cumulative 114bps of easing priced by year-end.
- Tomorrow, the local calendar will see Consumer Inflation Expectation data and a speech by RBA Governor Bullock.
- The AOFM plans to sell A$1000mn of the 2.75% 21 November 2028 bond tomorrow.
