Korean Treasury Futures Fall Overnight Despite Oil Price Crash

Korean Treasury futures declined in overnight trading on the 28th, with 3-year contracts down 3 ticks to 102.85 and 10-year contracts falling 9 ticks to 105.08, despite a sharp drop in international oil prices. The decline occurred as US Treasury bonds showed limited gains amid auction supply pressures, even as Brent crude plummeted 8.7% following a pause in US-Iran military exchanges. Foreign investors net purchased both 3-year and 10-year contracts, while financial investment firms and retail traders net sold across both maturities.

3-Year and 10-Year Treasury Futures Record Overnight Declines

According to the Seoul bond market on the 28th, 3-year Korean Treasury futures closed at 102.85 in overnight trading, down 3 ticks from the previous day's regular session close. Foreign investors net bought 8 contracts, while financial investment firms and retail investors net sold 3 contracts and 4 contracts respectively.

10-year Treasury futures ended trading down 9 ticks at 105.08. Foreign investors net purchased 6 contracts, while financial investment firms and retail investors net sold 2 contracts and 4 contracts respectively.

Trading volume for 3-year contracts increased to 336 contracts from 248 contracts in the previous session. Trading volume for 10-year contracts fell sharply to 15 contracts from 538 contracts.

10-year Korean Treasury futures overnight trading flow. Source: Yonhap Infomax.

US Treasury Yields Fall Moderately as Brent Crude Drops 8.7%

During the same period, US Treasury yields showed a moderate decline led by longer-term maturities. US 10-year and 30-year Treasury yields fell 2.90 basis points and 2.10 basis points respectively compared to the previous trading day's New York market close. The 2-year yield declined 0.80 basis points.

International oil prices plunged around 8%, pushing Treasury prices higher, though gains were limited amid auction and corporate bond supply pressures.

As tensions eased following a pause in US-Iran military exchanges, Brent crude September contracts closed at $88.36 per barrel, down 8.7% from the previous session — marking the largest percentage decline since mid-April. West Texas Intermediate (WTI) September contracts finished at $82.61, down 7.5%.

FAQ

What happened to Korean Treasury futures in overnight trading on the 28th?
Korean 3-year Treasury futures fell 3 ticks to 102.85 and 10-year futures dropped 9 ticks to 105.08 in overnight trading on the 28th, despite a sharp decline in international oil prices.

Why did Brent crude oil prices drop 8.7%?
Brent crude September contracts plummeted 8.7% to $88.36 per barrel following a pause in military exchanges between the US and Iran, marking the largest percentage decline since mid-April.