Supplemental Treasury bond yields surge… Inflation shock and supply and demand concerns bond market’du Sung-sung’

Input 2021.02.09 13:01

Treasury bonds of 20 and 30 years, about two years, the highest… Even more than 2% of the 30-year market in US ships
“Differentiation between domestic and global bonds… Additional concerns about supply and demand for domestic flights are ahead”

The 10-year Treasury bonds, 20-year and 30-year bonds all crossed the connection point. Treasury bond prices are falling as a factor that aggravates the supply and demand of government bonds, such as pressure from the politicians to formulate an additional budget for the 4th disaster aid payment after the US Treasury Bond interest rate has been high. In addition, expectations for inflation were reflected as international oil prices and grain prices soared.

According to the Financial Investment Association on the 9th, the 10-year Treasury bond interest rate in Korea on the previous day was 1.822%, an increase of 0.031 percentage points (p) compared to the previous transaction. The 10-year KTB rose to its highest level in about 15 months after November 12, 2019 (1.842%).

The 20-year and 30-year bonds soared to their highest levels in about two years. The 20-year Treasury Bond interest rate rose 0.045%p to 1.980% the day before, and the 30-year bond rose 0.043%p to 1.985%. Both were the highest since March 20, 2019 (2.008%, 2.003%).

As the US Treasury Bond interest rate rises, the overall government bond market is showing an uptrend. The day before (local time), the 30-year Treasury bond interest rate exceeded 2% for the first time since the novel coronavirus infection (Corona 19). The 10-year product also rose to 1.20% during the intraday.

This is an analysis that reflects the expectation of inflation as well as the recovery of the US economy. International oil prices continue to rise as the US economic stimulus plan has been in full swing. The day before (local time), Brent oil, one of the three major oils, was traded in excess of $60 on the London ICE Futures Exchange.

In addition, prices of corn, wheat and other grains are rising sharply in response to global demand recovery, led by China, stimulating prices. The World Food Price Index released by the Food and Agriculture Organization of the United Nations (FAO) was 113.3 points in January, showing a rise in the eighth consecutive month.

In Korea, the analysis suggests that concerns over supply and demand in the government bond market are raising interest rates. As the party government began discussing the payment of the 4th disaster support fund to compensate for the damage caused by the 3rd spread of Corona 19, it is predicted that an additional correction budget (additional) will pass in March. As the amount of government bonds issued last month reached 19 trillion won, which is more than doubled from a month ago, there are concerns that the issuance of bonds will be excessive.

Moon Hong-cheol, a researcher at DB Financial Investment, said, “The domestic bond market is somewhat differentiated from the global market, and a weakening mindset due to the supply and demand burden is underlying.” I need to put it.”