NH Amundi Sees Buying Opportunity in South Korean Bonds Amid Rate Hike Expectations

NH Amundi Asset Management has identified a buying opportunity in South Korea's short-term bonds, citing excessive central bank rate hike expectations priced into the market. According to Jin10, Han Su-il, the firm's executive director, stated in an interview that one- to two-year government bonds are currently 'cheap.' He noted that the swap market unrealistically anticipates multiple 25 basis point rate hikes by the first half of 2027. 'It is highly unusual for the market to price in four to five rate hikes before the rate hike cycle has even begun,' Han remarked. Looking ahead to the next policy meeting, Han emphasized that the key focus will be the Bank of Korea's GDP forecast for 2027, rather than its short-term outlook for this year. He expects the central bank to project a 1.9% economic growth rate for 2027 and to implement one rate hike in July, followed by a prolonged period of inaction.