2025/03/07 - Global Market this week

Market this week

 

<Korea>

- Korea CPI for Feb. recorded 2.0%. Living in Korea, it doesn't feel like just 2.0%.

 

<United States>

- Powell said in recent interview that FED is in a wait-and-see mode considering inflation with tariffs

- Bessent also says 10yr UST yield is more important than FED rate. With controlled oil price, Trump's policy won't cause inflation. In fact, 10yr UST yield has been dropping recently. 

UST 10yr yield

- Nonfarm Payroll for Feb. recorded 151k. lower than market expectation 160k. 

- Mixed signs in the specific components of ISM manufacturere and service index. Seems like domestic economy is crashing in other indexes...but ISM doesn't show that bad

- Due to Trump's tariffs, ironically local economy is showing bad signs..영어 표헌 넘 어렵네

 

<China>

- After the China's two session meeting(양회). There were announcements of future plans to boost the economy and the economical prospect of next year and budget deficit brake maximum has been eased.  

- KOSPI could anticipate positive influence and coupling from Chinese market. 

 

<Japan>

- Current central bank rate stands at 0.5%

- Inflation rate is constantly hiking for past few months

- JGB yields were rising due to uncertainty with Trump's tariffs and early rate hikes

- JGB 10yr crossed 1.5% for the first time after 2009. Influenced by sell off in Europe and Trump's tariffs. 

- Comments from BoJ Deputy Governor Shinichi Uchida also contributed to the sell-off. Uchida reportedly said the central bank was likely to “raise interest rates at a pace in line with dominant views among financial markets and economists.”

- JGB sell off might be mostly linked to high inflation rate domestically. Japan CPI(YoY) at Feb. hit 4.0%. target is set at 2.0% 

JGB 10yr yeild after abolition of YCC cap.

 

<Germany and Eurozone>

- German Government Bonds(Bundt) recorded their biggest daily jump on yields since the countriy's reunification in 1990. 10yr Bundt added up around 30bp in just one day. 

- Sell-off came after lawmakers from parties widely expected to form Germany’s next coalition government agreed to reform historic debt policy rule to allow an increase in national defense spending(GDP 1%)

- R eform the constitutional debt brake system in order to enable defense spending in excess of 1% of GDP

- 500 billion euro credit-financed special infrastructure fund over ten years.

- Germany will run budget deficits comfortably over 3% of GDP over the next couple of years rather than keeping the deficit at around 2.5% as we had previously assumed

German Bundt 10yr yield after shift in debt brake

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USD/KRW exchange rate: 1,449.00

USD/JPY exchange rate: 148.03엔

USD/CNY exchange rate: 7.2340위안

CNY/KRW exchange rate: 200.26원

DXY: 103.81

 

US Treasury 30Y yield: 4.602%

US Treasury 10Y yield: 4.304%

US Treasury 2Y yield: 4.002%

 

KTB 30Y yield: 2.585%

KTB 10Y yield: 2.773%

KTB 2Y yield: 2.662%

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