Bond market sentiment improved in July on U.S.-Iran ceasefire agreement, but inflation and exchange-rate pressures persist

[The Financial News] Bond market sentiment improved in July from the previous month, as expectations grew that geopolitical risks would ease following the ceasefire agreement between the United States and Iran.
The Korea Financial Investment Association said on the 16th, in its July bond market indicators report, that the overall BMSI for July stood at 85.1 points, up 4.1 points from 81.0 in the previous month.
The improvement came as more respondents expected market interest rates to stabilize and bond yields to fall after the ceasefire agreement.
BMSI is calculated from survey responses. A reading above 100 means bond prices are expected to rise, or yields to fall, indicating favorable sentiment in the bond market. A reading below 100 indicates that sentiment is weakening.
The association conducted the survey from July 8 to 11 among people working in bond holdings and bond management. The index was based on responses from 100 people at 55 institutions.
Bond market sentiment regarding inflation worsened from the previous month. Concerns over rising prices, driven by prolonged high exchange rates and high oil prices, continued, and the share of respondents expecting inflation rose to 52%, up 5 percentage points from 47% in the previous month. As the won continued to stay around the 1,500 level against the dollar and external factors such as U.S. economic data releases remained mixed, more respondents also expected the exchange rate to rise.
The share of respondents expecting the exchange rate to rise reached 24%, up 6 percentage points from the previous month.


khj91@fnnews.com Kim Hyun-jung Reporter