S.Korean bonds mixed, short end gains on rate view

SEOUL, Nov 6 - South Korean government bond prices were mixed on Friday, with a steady near-term interest rate outlook lifting short-dated paper ahead of the central bank's rate review next week whereas longer-term bonds fell.

The one-year treasury bond yield fell 1 basis point to 3.44 percent while the 10-year yield rose 4 basis points to 5.47 percent <KSDA02>. December three-year treasury bond futures <KTBc1> gained 1 tick to 108.81.

"Traders appeared less worried about the possibility of the central bank making hawkish comments after the policy meeting next week considering the recent global mood," said Hwang Tae-yeon, a fixed-income analyst at Tong Yang Securities.

The Bank of Korea is widely expected to hold the seven-day repurchase agreement rate steady at a record-low 2.0 percent next week and in December, although money-market rates price in chances for at least one rate rise over the next three months.

The central bank is due to hold its monthly policy meeting on Nov. 12.

Longer-term bonds were hurt by a rebound in equities markets around the world on a reduced concern about the economy.

On the week, the 1-year treasury yield fell 7 basis points while the benchmark 5-year yield added 4 basis points.

close prev close 5-yr treasury bonds 4.98 pct 4.97 pct 3-yr treasury bonds 4.46 pct 4.46 pct 1-yr monetary stabilisation bonds 3.44 pct 3.45 pct 3-mth certificates of deposit 2.79 pct 2.79 pct Average call rate ~ 2.00 pct 6-mth *KORIBOR 3.25 pct 3.25 pct ~ not quoted * Korea interbank offered rate