'Tumbling Oil Prices' Drive Treasury Yields Down... 3-Year Bonds at 3.669% Per Annum
10-Year Treasury Bond Yield Falls to 4.150% per Annum
Down 11 Basis Points
International oil prices plunged on August 5, 2026, amid expectations that the Strait of Hormuz would soon reopen, triggering a sharp drop in Korean Treasury bond yields across the board at the end of trading.
On this day at the Seoul bond market, the yield on three-year Treasury bonds closed at 3.669% per annum, down 7.1 basis points (bp) (1bp = 0.01 percentage point) from the previous trading day. This marks the lowest level since May 26, 2026, when it stood at 3.664%.
The yield on ten-year bonds fell by 11.0bp, closing at 4.150% per annum. This is also the lowest since June 30, 2026, when it recorded 4.091%.
Five-year and two-year bonds closed at 3.916% and 3.545% per annum, dropping by 8.8bp and 5.8bp, respectively.
The yield on twenty-year bonds declined by 5.5bp to 4.471% per annum. Thirty-year and fifty-year bonds dropped by 4.6bp and 4.3bp, closing at 4.511% and 4.412% per annum, respectively.
Foreign investors made net purchases of 19,804 contracts of three-year Treasury futures and 9,788 contracts of ten-year Treasury futures.
The decline in Treasury bond yields was attributed to falling international oil prices. News that the United States and Iran had made progress in negotiations over passage through the Strait of Hormuz prompted international oil prices to plummet for the second consecutive day, which had a significant impact.
On August 4, 2026 (local time), the September delivery of West Texas Intermediate (WTI) crude futures settled at $75.77 per barrel on the New York Mercantile Exchange, down 5.7% from the previous day.
U.S. President Donald Trump said in a media interview, "We are having very good talks with Iran" and added, "The Strait of Hormuz will be opened soon, and if not, Iran will face a very powerful attack."
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With media reports suggesting that an agreement between the United States and Iran could be reached within five to six days, President Trump said, "That could very well happen."
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