- Following the previous week's upward trend, the Korea Treasury Bond futures market continued its bullish run this week.
- Against the downward trend that has continued since the middle of April this year, the KOFEX USD/KRW futures market took a correction this week.
KTB Futures Market
Following the previous week's upward trend, the Korea Treasury Bond futures market continued its bullish run this week.
On Monday, the leading month contract, the KTB209 soared by 81 ticks closing the day at 106.59 thanks to the weak local stock market as the US stock market hit 4-yr low on the previous weekend.
However on Tuesday, against the sharp increase on Monday, the July KTB futures contract dropped by 68 ticks mainly due to the KOSPI's recovery as most players thought that the US stock market hit the bottom.
After the drop on Tuesday, the KTB209 rebounded toward the end of the week. From Wednesday to Friday, the KTB209 showed its upward movement again increasing by 84 ticks and finally it finished the week at 106.59 influenced mostly by the continued weakness in both the local and the US stock market and a growing possibility over another rate cut by FRB in the US.
During the week, thanks to the higher-than-usual price volatility influenced by the similar fluctuating movement in the local stock market, the volume in the KTB futures market increased by 52.5 percent from the previous week. The average daily trading volume in the market posted 86,673 contracts this week.
USD/KRW Futures Market
Against the downward trend that has continued since the middle of April this year, the KOFEX USD/KRW futures market took a correction this week.
The current month contract in the USD/KRW futures market, the USD208 gained by KRW 19.9 per USD or 1.69 percent closing the week at KRW 1,193.0.
The major reasons for the Greenback's strength against the Korean Won this week are as follows:
- Technical rebound of the JPY/USD exchange rate in response to its recent steep fall
- Aggressive net selling in the local stock market by foreign investors
- The amount of net selling by foreign investors in Seoul main bourse this week recorded KRW 752.7 billion.
- Korean and Japanese authorities' continued comments showing their worries over their strong currency against the USD.
