South Korean government bond futures rose in overnight trading on the 29th as international oil prices fell for the third consecutive day. The 3-year bond futures closed 2 ticks higher at 103.02, while the 10-year bond futures gained 9 ticks to finish at 105.64. The gains came amid a sharp decline in crude oil prices and weakening US consumer sentiment data, which pushed US Treasury yields lower and reduced market expectations for a Federal Reserve rate hike at the next Federal Open Market Committee (FOMC) meeting to the low 30% range.
3-Year and 10-Year Bond Futures Post Gains in Overnight Session
According to the Seoul bond market on the 29th, the 3-year government bond futures closed at 103.02 in overnight trading, up 2 ticks from the previous day's regular session close. Foreign investors net sold 92 contracts, while financial investment firms and individual investors net purchased 50 contracts and 42 contracts respectively.
The 10-year government bond futures finished trading at 105.64, up 9 ticks. Foreign investors and financial investment firms net purchased 14 contracts and 11 contracts respectively, while individual investors net sold 20 contracts.
Trading volume for the 3-year bond futures decreased to 128 contracts from 336 contracts in the previous trading day. The 10-year bond futures trading volume increased to 66 contracts from 15 contracts.
![10-year government bond futures overnight trading trend]()
10-year government bond futures overnight trading trend. Source: Yonhap Infomax.
US Treasury Yields Decline Amid Weak Consumer Confidence Data
US Treasury yields showed a downward trend during the same period. The 10-year and 30-year US Treasury yields fell 4.30 basis points and 4.80 basis points respectively compared to the previous trading day's New York market close. The 2-year yield declined 3.20 basis points.
The decline in oil prices combined with weak US consumer sentiment indicators acted as bullish factors for bonds. The probability of a rate hike at the next FOMC meeting as reflected in the futures market dropped to the low 30% range.
The Conference Board (CB), a US economic analysis organization, announced that the July Consumer Confidence Index fell 1.4 points from the previous month to 90.8. The market had forecast a slight increase to 92.3, but the result came in opposite to expectations. The previous month's figure was revised upward by 1.0 point to 92.2.
WTI Crude Oil Falls Below $80 Per Barrel for First Time Since the 16th
West Texas Intermediate (WTI) crude oil for September delivery plunged 4.06% from the previous session to close at $79.26 per barrel. This marked the first close below $80 since the 16th, eight trading days prior. Over the three-day period through this day, WTI declined by nearly $13.
FAQ
What happened to South Korean government bond futures in overnight trading on the 29th?
South Korean government bond futures rose in overnight trading on the 29th. The 3-year bond futures closed 2 ticks higher at 103.02, while the 10-year bond futures gained 9 ticks to finish at 105.64.
Why did South Korean bond futures rise in overnight trading?
The gains came as international oil prices fell for the third consecutive day and US consumer sentiment data weakened. WTI crude oil plunged 4.06% to close at $79.26 per barrel, while the US Consumer Confidence Index fell 1.4 points to 90.8 in July, missing market forecasts. These factors pushed US Treasury yields lower and supported bond futures.
