KRW: Equity Dip May Weigh Ahead of LNY Break, But USD/KRW Well Under Feb Highs
Spot USD/KRW lows on Thursday got close to the 200-day EMA support point, 1431.45. We finished up higher at 1439.1, with tech led equity market risk off aiding USD related safe have demand (JPY and CHF were outperformers in the G10 FX space though). The SOX lost 2.5% in Thursday US trade, while the MSCI IT index fell by 2.59%. The Kospi finished above 5500 yesterday, fresh record highs, while offshore investors added +$2bn to local stocks, further paring back recent outflows. Reversal of these trends, to some extent today, given US Thursday moves, may create upside USD/KRW pressure.
- Still, we are some distance from earlier Feb highs (just above 1475). Before then we have 1445.5, the 100-day EMA, which may now act as a resistance point, while moves above 1460 may also draw selling interest. On the downside, late Jan lows were close to 1420.
- South Korean markets are closed for the LNY break from next Mon through Wed, returning Thursday, Feb 19). Via BBG: "Finance Minister Koo Yun Cheol will hold a meeting at 8am local time to review financial market trend ahead of Lunar New Year holiday. "
- On the data front, earlier we had Jan trade prices, with import prices up 0.4%m/m, but down -1.2% y/y. Export prices were up 4.0%m/m, +7.8%y/y.
- Later on we get Dec money supply figures.
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AUSSIE BONDS: AUCTION PREVIEW: ACGB Oct-36 Supply Due
The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 4.25% 21 October 2036 Treasury Bond. The line was last sold on 17 December 2025 for A$1000mn. The sale drew an average yield of 4.7727%, at a high yield of 4.7750% and was covered 3.7100x. There were 40 bidders, 16 of which were successful and 9 were allocated in full. The amount allotted at the highest yield as a percentage of the bid at that yield was 48.2 %.
- This week's ACGB supply is at the recent weekly issuance average of $2000mn, with A$300mn of the 4.75% 21 June 2054 bond sold yesterday and A$700mn of the 3.25% 21 April 2029 bond on Friday.
- The Australian Government has released the Mid-Year Economic and Fiscal Outlook (MYEFO). This notice provides updated guidance on planned issuance of Australian Government Securities by the AOFM in 2025-26.
- Planned issuance of Treasury Bonds (including Green Treasury Bonds) for 2025-26 has been revised to around $125 billion (of which $62.5 billion has been completed). Planned issuance of Treasury Indexed Bonds in 2025-26 remains between $2 billion and $3 billion (of which $1.5 billion has been completed).
- Over the remainder of 2025-26, the AOFM plans to: Issue a new October 2037 Treasury Bond (by syndication and subject to market conditions); Issue a new June 2036 Green Treasury Bond (by syndication and subject to market conditions); Conduct Treasury Bond tenders most weeks; and Hold 1-2 Treasury Indexed Bond tenders each month.
- Results are due at 0000 GMT / 1100 AEST.
US TSYS: US CPI Does Little to Change FED Expectations
US bond futures moves overnight were moderate with the 10-Yr finishing at 112-06+, unchanged for the day. This left TYH6 wedged between it's topside resistance from the 100-day EMA at 112-14 and the downside resistance of 200-day EMA at 112-00.
Cash saw yields fairly stable across the curve, with moves muted.
- The 2-Yr finished at 3.535% unch
- The 5-Yr finished at 3.753% down -0.3bps
- The 10-Yr finished at 4.18% up +0.3bps
- The 30-Yr finished at 4.836% up 0.8bps
- There are multiple unusually large monthly swings in the December CPI report that warrant close inspection and caution, but at face value it leaves headline Y/Y inflation at its lowest since June and core CPI Y/Y inflation at joint lows since early 2021. There was relatively little change in Y/Ys for core goods and services compared to last month's surprisingly low November print, whilst food inflation firmed.
- New home sales looked strong and steady in a combined September/October report, with 738k/737k single-family home sales reported in those months marking the best back-to-back numbers since early 2022 (figures are in seasonally-adjusted, annual rate terms). That was better than the consensus expectation for sales to average 712k in those months.
- Projected rate cut pricing vs. late Monday in the US levels (*): Jan'26 steady at -1.2bp, Mar'26 at -6.3bp (-6.6bp), Apr'26 at -10.7bp (-11.2bp), Jun'26 at -22.5bp (-23.6bp).
- 30Y Bond Auction Re-Open was well supported with bid-to-cover at 2.36x vs. 2.29x prior.
JGBS: Futures Weaker Overnight Ahead Of 5Y Supply
In post-Tokyo trade, JGB futures closed weaker, -24 compared to settlement levels, US tsys finished little changed, well off the morning's knee-jerk post-CPI data bests.
- Markets continue to digest multiple anomalies in the data set stemming from a reversal of November holiday sale discounting for goods products, along with sampling issues from the use of bimonthly metro area surveys (with no October data for comparison due to no survey that month).
- Bitcoin rose to a two-month high, climbing above $94,700 for the first time since 17 November 2025, and was last up 1.8% at around $95,760.
- Today, the local calendar will see Money Stock and Machine Tool Orders alongside 5-year supply.
- (Bloomberg) "It’s difficult to be bullish on 5-year notes, Keisuke Tsuruta, a senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities, writes in research note. A fiscal outlay boost under a Takaichi administration would increase debt supply, weighing on the sector."
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