Halister News

(Bloomberg) -- S.Korea rates curve bear steepens as BOK revises up growth and inflation forecasts after keeping policy rates unchanged. Aussie bonds slip with waves of selling seen in 3y futures after stronger jobs data. JGBs firmer from the open, with 20y and 40y yields at 0.60% and 1.10% respectively, where dip buying demand has been seen.

• Korea 10y bond futures snapped lower, swap curve bear steepened after the BOK press conference, which saw growth and inflation forecasts revised higher for 2017 and revealed a hawkish dissent from one member
  • Korea 5-10y swap rates jumped 5.5bps, while 1y rate rose ~3bps
  • Standard Chartered economists expect further rise in short-dated rates given the shift from the BOK; year-end seasonality in onshore liquidity conditions, debentures issuance may also add pressure: MORE
• Aussie bond yields higher across the curve; 3y underperforms with cash yield up 5bps, after waves of selling in futures following stronger jobs data; 4k contracts sold at 97.86, then a further 5k at 97.85, before slipping to day’s low, says an Asia-based trader
• JGBs bounced after opening lower, with 20y yields at 0.60% and 40y at 1.10%, levels where dip buying demand has previously shown up
  • Market had set up for the 5y JGB sale, with the sector lagging this week, and heavy offers into BOJ buying operation in the bucket last week
• Auction was met with good demand, bid/cover 4.24x vs prior 4.07x, but signs of very aggressive bidding with 0.00 tail, for the first time since Oct. 2016; JGB futures edge higher after the result

ASIA RATES AT A GLANCE

• Click here to see daily changes in Asian rates

To contact the reporter on this story: Stephen Spratt in Hong Kong at sspratt3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui