Forex trading store

SEOUL, April 1 (Reuters) – South Korean government bond

prices spiked up after big swings on Thursday, with a mild

inflation number outweighing exports data which restoked hopes of

a sustained economic recovery.

The market got off to a firmer start on expectations about

the new Bank of Korea Governor Kim Choong-soo whose inaugural

speech underscored views that interest rates would remain low.

But investors briefly took a hit from news that Citigroup’s

global bond index compiler dropped South Korea when it decided

recently to include Mexico in the widely-watched index, and

stronger-than-expected exports data.

‘It is a liquid market with plenty of money inflows,’ said a

bond trader at a local asset manager. ‘It looks like both bonds

and stocks are being driven by money power.’

A strong bout of short-covering from banks, which had cashed

in on the recent rally, emerged towards the close.

The benchmark five-year treasury yield lost 6

basis points to 4.46 percent.

Front-month three-year treasury bond futures leapt 25

ticks to 110.75, while Seoul shares posted their highest close in

10 weeks on Thursday following a foreign investors’ buying streak

which continued for a 15th consecutive session.

close prev close

5-yr treasury bonds 4.46 pct 4.52 pct

3-yr treasury bonds 3.84 pct 3.89 pct

1-yr monetary stabilisation bonds 2.67 pct 2.72 pct

3-mth certificates of deposit 2.78 pct 2.78 pct

Average call rate 2.00 pct 2.10 pct

6-mth *KORIBOR 2.82 pct 2.82 pct

* Korea interbank offered rate

(Reporting by Kim Yeon-hee; Editing by Jacqueline Wong)

((yeonhee.kim@thomsonreuters.com; +82 2 3704 5646; Reuters

Messaging: yeonhee.kim.reuters.com@reuters.net))

Keywords: MARKETS KOREA BONDS

(If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com)

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