- At the KTB futures market, the lead month contract KTB206 increased 27 ticks when the yield of benchmark 3-yr K-Treasury lost only 1 tick.
- The Korean Won continued to enjoy its super strong appreciation against the greenback at the KOFEX F/X futures market, which began at the beginning of the previous month.
KTB Futures Market
This week, the KTB futures market - the flagship market place in KOFEX - turned upward against the previous week's weakness. At the KTB futures market, the lead month contract KTB206 increased 27 ticks finishing the week at 103.98 when the yield of the benchmark 3-yr K-Treasury lost only 1 tick posting 6.31 % on Weekend.
Firstly, from Monday to Tuesday, the KTB206 jumped up 24 ticks to reach at 103.95 on Tuesday. And then there was a one-day loss. On Wednesday the KTB206 lost 17 ticks reaching at 103.78. Finally, from Thursday to Friday, the KTB206 regained 20 ticks and it closed the week at 103.98.
The major reasons for the strength in the KTB futures market are as follows:
- Recent strength of the KRW against the USD
- Appreciation of the KRW could delay the recovery of the nation's export and also offset the wary of the inflation, as the import prices would stabilize.
- Weak domestic stock market
- Both the KOSPI and the KOSDAQ Index plunged by 20.46 points or 2.3 percent and 3.9 points or 4.9 percent finishing the week at 854.57 points and 75.57 points amid the news that one of World Bank buildings in the US shut down from anthrax terrorism.
- Success of the 500 billion 5-yr FXSB auction on Wednesday
- The total bid record 1.13 trillion
USD/KRW Currency Futures Market
During the week, at the KOFEX F/X futures market, the Korean Won continued to enjoy its super strong appreciation against the greenback, which began at the beginning of the previous month.
Except Tuesday, the lead month contract USD206 decreased by KRW 19.6 or 1.53 percent from the previous week closing the week at KRW 1,245.1 per USD, the lowest level this year. At the same time, at the local F/X market, the Korean Won declined by KRW 18.4 per USD against the USD as well.
The major reasons for the strength of the Korean Won are as follows:
- The plunge of the JPY/USD exchange rate mostly effected by the announcement of the lower-than-expected index of leading economic indicators of the US in April and the growing concern over additional terrorist attacks on the US after the US Vice President's warning
- Net purchasing in local stock market by foreign investors
- Total amount of the net purchasing posted KRW 16.0 billion from the KRW 190.3 billion during the previous week
- Immediate selling by exporters when the exchange rate is on up-ticks
