South Korean 10-year bond yields close to near 7-month high on rising Fed Dec rate hike hopes

The South Korean 10-year bond yields closed to near 7-month high Thursday on rising speculation that the Federal Reserve will not witness any difficulty from the victory of Republican candidate Donald Trump in hiking interest rate in December.

The 10-year bonds yield, which moves inversely to its price, rose 14 basis points to 1.821 percent and short-term 3-year bonds yield jumped nearly 6 basis points to 1.464 percent.

The Korean bonds have been closely following developments in US debt market. The United States benchmark 10-year Treasury yield rose 7 basis points to the highest in 2016 of 2.040 percent.

On Wednesday, the United States Republican candidate Donald Trump pinned his victory against Democrat opponent Hillary Clinton in the 2016 presidential election. The U.S. bond prices dropped on expectations that U.S. President-elect Donald Trump's policies, such as fiscal expansion and protectionism on international trade, will stoke inflation.

Also, investors again revised the outlook for the U.S. interest rates after Donald Trump's victory, with the probability of a December rate hike by the Federal Reserve going from as low as 30 percent to as high as 82 percent.

Moreover, crude oil prices recovered from previous losses as the U.S. financial markets bounced back from an early Brexit-like slide that followed Donald Trump’s surprise victory in the US presidential election. The International benchmark Brent futures rose 1.08 percent to $46.87 and West Texas Intermediate (WTI) also climbed 0.49 percent to $45.49 at 06:20 GMT.

Meanwhile, The Korea Composite Stock Price Index (KOSPI) ended 2.26 percent higher at 2,002.60 points.