KOFIA "Bond Market Investment Sentiment Expected to Worsen in July Due to COVID-19 Impact"

[Asia Economy Reporter Oh Ju-yeon] Domestic bond industry workers forecast that investment sentiment in the bond market will worsen in July compared to the previous month.

According to the Korea Financial Investment Association on the 30th, a survey of 200 bond-related workers conducted by the association from the 17th to the 23rd on the '2020 July Bond Market Sentiment Index (BMSI)' showed that the composite index dropped 5.5 points from the previous month to 104.4.

A value above 100 indicates a strong bond market (interest rate decline), 100 indicates stable, and below 100 indicates a weak bond market (interest rate rise) is expected.

By sector, the interest rate outlook BMSI was 111.0, down 11.0 points from the previous month's survey.

The association explained, "Due to concerns about supply and demand pressure caused by increased government bond issuance following the third supplementary budget, the proportion of respondents expecting interest rate declines decreased."

The inflation BMSI fell from 114.0 in the previous month to 109.0, and the exchange rate BMSI dropped 13.0 points from the previous survey result to 80.0 (strengthening the forecast of won depreciation).

The association stated, "Recently, the number of confirmed cases of the novel coronavirus infection (COVID-19) has been increasing, raising concerns about a second large-scale outbreak, which has led to the spread of global risk aversion sentiment."

This content was produced with the assistance of AI translation services.