SK Securities: US Treasury Yield Surge Has Limited Impact on KOSPI

SK Securities stated on May 27 that the recent surge in U.S. Treasury yields, returning to levels not seen since the mid-2000s, has a limited impact on South Korea's KOSPI index. The securities firm's analysis suggests that current KOSPI valuations are not under significant pressure. However, the firm identified several key risk factors that could affect the market. These include a potential correction in the U.S. stock market, a slowdown in the semiconductor industry, and the possibility of further increases in U.S. Treasury yields. The analysis pointed to a confluence of factors driving the rise in yields, such as high oil prices, diminished expectations for interest rate cuts by the Federal Reserve, and persistent inflation concerns. These elements are collectively contributing to the upward pressure on U.S. bond yields.

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High oil prices, receding expectations for Federal Reserve rate cuts, and inflation concerns are intertwined, causing U.S. Treasury yields to rise significantly.