President Lee to give speech as South Korea bonds gain

SEOUL (BestGrowthStock) – South Korean government bond prices rose on Monday, with escalating tensions between North and South Korea stoking expectations of further delays to an interest rate increase.

The won and Seoul shares (.KS11: ) extended declines on worries an exchange of tough rhetoric between North and South Korea over the cause of the sinking of a South Korean naval ship could raise sovereign risks on the divided peninsula.

South Korean President Lee Myung-bak will deliver a speech about the ship incident at 0100 GMT.

By 0007 GMT, the liquid 3-year government bond yield was down 4 basis points to trade at 3.70 percent, while the 3-year treasury futures June contract was 11 ticks higher at 111.25.

The Bank of Korea will sell 3 trillion won ($2.5 billion) of monetary stabilization bonds on Monday.

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(Reporting by Kim Yeon-hee; Editing by Jonathan Hopfner)

President Lee to give speech as South Korea bonds gain