S. Korean bonds strengthen as exports fall for 19th consecutive month

The South Korean government bonds ended firmer on Monday as the country’s exports fell for the 19th consecutive month in July, recording the biggest fall in last three months. Also, weak manufacturing PMI drove investors towards safe-haven buying.

The 10-year bonds yield, which moves inversely to its price, fell nearly 3 basis points to 1.361 percent, short-term 3-year bonds yield dipped nearly 1 basis point to 1.211 percent and the super-long 20-year bond yield slid 2-1/2 basis points to 1.437 percent.

South Korea's trade data continued to disappoint in July as exports fell 10.2 percent y/y, greater than the market expectations of 6.7 percent y/y fall, from down 2.7 percent in June. Moreover, imports also declined 14.0 percent y/y in July, greater than the consensus of -10.5 percent y/y fall, from down 7.7 percent in the previous month.

In addition, South Korea's Nikkei manufacturing PMI fell to 50.1 in July from 50.5 in June.

Lastly, investors will remain keen to focus on the July consumer inflation data, which is scheduled to release on Monday at 23:00 GMT.

Meanwhile, The Korea Composite Stock Price Index (KOSPI) closed up 0.67 percent or 13.42 points at 2,029.61.