Government Bond Yields Rise as Oil Prices, U.S. Rates Rebound; 3-Year at 3.961%

Three-year yield rises 2.8 bp... 10-year yield also up 0.7 bp

Government bond yields rose on October 7, led by short- and medium-term maturities, as international oil prices rebounded slightly and U.S. Treasury yields climbed again.

In the Seoul bond market, the yield on three-year Treasury bonds ended at 3.961%, up 2.8 basis points (1 bp = 0.01 percentage point) from the previous trading day.

The 10-year yield rose 0.7 bp to 4.376%. The five-year and two-year yields also gained 1.7 bp and 1.6 bp, respectively, to close at 4.134% and 3.898%. The 20-year yield rose 1.2 bp to 4.405%.

Some long-term bonds, however, gained ground. The 30-year and 50-year yields fell 1.9 bp and 1.2 bp, respectively, to 4.491% and 4.494%.

Foreign investors made net purchases of 5,255 three-year Treasury futures contracts and 552 10-year Treasury futures contracts.

The rebound in international oil prices and U.S. Treasury yields contributed to the rise in domestic bond yields. International oil prices ended slightly higher overnight. On October 6 local time, December Brent crude futures rose 0.26% from the previous session to $100.58 per barrel on the ICE Futures Exchange, while November West Texas Intermediate (WTI) crude futures gained 0.01% to $89.44 per barrel on the New York Mercantile Exchange.

Markets are watching the impact that a recent increase in crude oil exports and an agreement among the Group of Seven (G7) countries to release oil from their reserves could have on future supply and demand. If oil prices remain elevated, they could add to market interest rates' upward pressure by fueling inflation.

U.S. Treasury yields also weighed on the domestic bond market. After reaching their highest level since 2002 on October 5, U.S. Treasury yields fell 3 bp from the previous session to 5.281% on October 6, but rebounded in Asian trading on October 7, recovering the previous day's decline.

The 30-year Treasury bond yield, however, fell, unlike yields on other maturities, supported by strong demand at an auction.

This content was produced with the assistance of AI translation services.