금융시장
Money Flow Analysis Series (27) : 2010 Bond Outlook - Slow But Steady Rate Increases
2010-02-18KIM, Wan-Joong
목차
요약
Interest rates will rise in 2010 as policy rate hikes are only a matter of time
The policy interest rate is currently at a record low due to the financial crisis, but pressure to normalize the rate is growing due to continuing improvements in consumption and exports after Q4 2009, increasingly optimistic economic forecasts for 2010, and the BOK’s focus on preemptive monetary policies.
on the other hand, the government is stressing the need for low interest rates in the
face of uncertainty in the economy and has highlighted its focus on growth by setting
a GDP growth target of 5% for 2010. The BOK and the government are thus at odds
over interest rate policies, which could delay policy rate hikes.
The timing and speed of rate hikes depend on domestic and foreign economic conditions, in addition to policy stances, and are thus open to debate. However, the BOK will continue to consider rate hikes in 2010, and market rates will rise in anticipation of these hikes.
Hana Institute of Finance expects that policy rate hikes will be delayed to H2 2010 due
to the government’s growth-oriented policy stance and uncertainty on the economy, and that government bond rates will remain low in H1 before gradually rising due to the implementation of global exit strategies and policy rate hikes.
Rising global sovereign debt issuance and maturities after 2011 are key watch points
Government bond issuance is expected to decline in 2010 to \80.4 trillion (down from
\81.6 trillion in 2009), and supply and demand imbalances are thus unlikely.
Net foreign buying of bonds may slow somewhat since foreign ownership is currently
at a record high, but will remain relatively stable due to continuing fiscal expenditures
and expectations that Korea will be included in the WGBI (World Government Bond Index).
In spite of the government’s efforts to reduce the national debt and rising tax revenues
driven by the economic recovery, a record volume of government bonds will mature
in 2011 (\43 trillion) and refinancing demand will increase in H2.
Global sovereign debt issuance is steadily increasing, and the U.S. and the UK have high foreign debt. The implementation of global exit strategies will end quantitative easing policies and put upward pressure on government bond rates.
In 2010, pressure on bank and corporate bond issuance will ease, but pressure to issue monetary stabilization bonds and special purpose bonds will grow
Net issuance of short-term monetary stabilization bonds will continue due to the declining \/$ exchange rate, growing foreign exchange reserves, and the current account surplus.
Bank debenture issuance will be weak due to ample funding resulting from deposit inflows and easing loan competition, and due to reserve requirements on funding from debentures.
Corporate bond issuance will be weak since companies secured ample liquidity in 2009, and interest rates will continue to diverge between industries and firms due to restructuring and differing operating environments.
The policy interest rate is currently at a record low due to the financial crisis, but pressure to normalize the rate is growing due to continuing improvements in consumption and exports after Q4 2009, increasingly optimistic economic forecasts for 2010, and the BOK’s focus on preemptive monetary policies.
on the other hand, the government is stressing the need for low interest rates in the
face of uncertainty in the economy and has highlighted its focus on growth by setting
a GDP growth target of 5% for 2010. The BOK and the government are thus at odds
over interest rate policies, which could delay policy rate hikes.
The timing and speed of rate hikes depend on domestic and foreign economic conditions, in addition to policy stances, and are thus open to debate. However, the BOK will continue to consider rate hikes in 2010, and market rates will rise in anticipation of these hikes.
Hana Institute of Finance expects that policy rate hikes will be delayed to H2 2010 due
to the government’s growth-oriented policy stance and uncertainty on the economy, and that government bond rates will remain low in H1 before gradually rising due to the implementation of global exit strategies and policy rate hikes.
Rising global sovereign debt issuance and maturities after 2011 are key watch points
Government bond issuance is expected to decline in 2010 to \80.4 trillion (down from
\81.6 trillion in 2009), and supply and demand imbalances are thus unlikely.
Net foreign buying of bonds may slow somewhat since foreign ownership is currently
at a record high, but will remain relatively stable due to continuing fiscal expenditures
and expectations that Korea will be included in the WGBI (World Government Bond Index).
In spite of the government’s efforts to reduce the national debt and rising tax revenues
driven by the economic recovery, a record volume of government bonds will mature
in 2011 (\43 trillion) and refinancing demand will increase in H2.
Global sovereign debt issuance is steadily increasing, and the U.S. and the UK have high foreign debt. The implementation of global exit strategies will end quantitative easing policies and put upward pressure on government bond rates.
In 2010, pressure on bank and corporate bond issuance will ease, but pressure to issue monetary stabilization bonds and special purpose bonds will grow
Net issuance of short-term monetary stabilization bonds will continue due to the declining \/$ exchange rate, growing foreign exchange reserves, and the current account surplus.
Bank debenture issuance will be weak due to ample funding resulting from deposit inflows and easing loan competition, and due to reserve requirements on funding from debentures.
Corporate bond issuance will be weak since companies secured ample liquidity in 2009, and interest rates will continue to diverge between industries and firms due to restructuring and differing operating environments.