South Korea's Q2 GDP Growth Beats Estimates at 0.6% Quarter-on-Quarter, Bond Yields Surge

According to Yonhap Infomax, South Korea's second-quarter real GDP expanded 0.6% quarter-on-quarter, significantly exceeding market expectations of 0.37%, lifting sentiment around potential back-to-back interest rate hikes in August. The stronger-than-expected growth report drove benchmark government bond yields higher this week, with the 3-year yield jumping 10.1 basis points to 3.953% and the 10-year yield rising 14.5 basis points to 4.445%.

This week's financial markets are set to focus on the U.S. Federal Reserve's July rate decision on July 30 and the Bank of Japan's rate decision on July 31, as well as rising international oil prices. Oil surpassed $100 per barrel earlier this week amid Middle East tensions, raising inflation concerns. Market analysts note the stronger GDP reading combined with oil price pressures may embolden hawkish Fed commentary, potentially supporting bets for consecutive rate increases by the central bank.