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2026-05-26 06:47:24
[Institutional Views: South Korean Bond Market Oversaturated with Interest Rate Hike Expectations, Short-Term Bonds Present a Buying Opportunity] 1. NH Amundi Asset Management points out that the South Korean bond market has already priced in too many central bank interest rate hike expectations, creating a good buying opportunity for short-term bonds. 2. Han Soo-il, the company's executive director, stated in an interview that 1-2 year South Korean government bonds are "cheap" at current price levels. He emphasized that the interest rate swap market reflects market expectations of multiple 25 basis point rate hikes by the first half of 2027, a pricing that is unrealistic. 3. Han Soo-il further analyzed, "The interest rate hike cycle hasn't even started yet, and the market has already priced in four to five rate hikes in advance, which is extremely unusual." 4. Looking ahead to the upcoming policy meeting, Han Soo-il believes the key focus will not be the Bank of Korea's short-term economic outlook for this year, but rather its assessment of GDP growth in 2027—this will help measure the sustainability of the AI chip boom. 5. He anticipates that the Bank of Korea will forecast economic growth of 1.9% in 2027 and raise interest rates once in July, followed by a prolonged period of inactivity.
