U.S. 10-Year Yield Tops 5.2%, 30-Year Hits 5.5% in Era of High Rates

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. U.S. Treasury Yields at 5% Become the New Normal; 30-Year Seen Topping 6% This Year

- Key summary: With U.S. Treasury yields breaking above 5% day after day, forecasts are emerging that rates overall are entering a prolonged upward phase. The 10-year note, the global benchmark for bond yields, is trading in the 5.10% range. On the 24th it rose as high as 5.22%, the highest since June 2007, and the 30-year bond also reached 5.501% the same day, its highest level since 2004. In a Bloomberg survey of 173 financial market specialists, 53% of respondents said the 30-year yield would exceed 6% this year, while Karen Ward of J.P. Morgan Asset Management predicted that the 10-year yield is unlikely to rise much above 5%. Some analysts also say a higher neutral rate — the level that neither stimulates nor restrains the economy — and funding demand for AI infrastructure investment could keep rates elevated for an extended period.

2. Foreign Investors Bet 1.3 Trillion Won on SK Square (402340), SK Innovation and Korean Air (003490)

- Key summary: In September, retail investors net-sold 1.3393 trillion won worth of SK Square, SK Innovation (096770) and Korean Air, while foreign investors bought 1.2815 trillion won of the same three stocks. All three posted double-digit gains this month, increasing the incentive for retail investors to take profits, while foreign investors leaned toward the possibility of further gains. SK Square, the top foreign net-buy, has a net asset value of 273.6 trillion won, of which its stake in SK hynix (000660) accounts for 98.3%, combining expectations of a rising stake value with larger dividends. For SK Innovation, strong refining margins and a recovery in the battery business were cited as reasons for buying, while for Korean Air, firm cargo rates and the effects of integration with Asiana Airlines (020560) were the drivers.

3. Oracle Delays Data Center Rent Payments, Notifying Blue Owl Capital Unilaterally

- Key summary: Oracle sent a notice invoking a force majeure clause — covering unavoidable events such as natural disasters — to Stack Infrastructure, a New Mexico data center developer owned by Blue Owl Capital, saying it would postpone the start of rent payments. The move came as operations are expected to be delayed by at least a year amid local opposition to power facilities. Morgan Stanley said the matter has triggered a broader review of AI data center loans and lease agreements and that funding conditions for AI are deteriorating. An Oracle spokesperson stressed that a force majeure notice does not in itself mean a project delay or a change in delivery schedules, but the price of Oracle's five-year credit default swaps — derivatives used to buy and sell default risk — rose to an all-time high of 231.77 as of the 25th, reflecting investor unease.

4. Trillions of Won in Cash Constraints Eased as Treasury Bonds Accepted as Collateral for Up to 98%

- Key summary: From the end of this month, stocks and bonds can be pledged as collateral for settlement facilitation funds that prevent failed securities settlements, with government bonds receiving a collateral recognition ratio of up to 98%. Until now, institutions had to prepare trillions of won in cash each morning to meet on-exchange settlement deadlines, and foreign institutions in different time zones often borrowed won short-term at high rates in overnight offshore markets. The Korea Securities Depository estimated that institutions' cash liquidity burden would fall by more than 50%, including the effect of a system accepting on-exchange securities due for receipt as collateral, to be introduced next month. Securities industry officials say high-turnover funds will flow in more easily and that an institutional foundation has been laid for inclusion in the Morgan Stanley Capital International (MSCI) developed market index.

5. Amid Suspicions of ETF Front-Running, National Pension Service Tightens Oversight of Outside Managers' Internal Controls

- Key summary: The National Pension Service has sent a message to outside managers entrusted with its funds, asking them to review internal control systems and exercise care over stock trading by employees. The move follows an investigation by the Financial Supervisory Service into indications that some fund managers at Samsung Active Asset Management bought shares slated for inclusion in active exchange-traded funds in advance through borrowed-name accounts and then sold them for a profit. Samsung Active's discretionary investment assets stood at about 18 trillion won at the end of the second quarter, of which roughly 15 trillion won came from pension funds, and the National Pension Service uses 27 outside managers for domestic equities. Meanwhile, some asset managers are tightening controls by recirculating notices on internal control violations company-wide.

6. Hit Directly by Rising Rates, Delinquency Rates on Loans to Smaller Firms Worsen

- Key summary: Won-denominated loan delinquency rates at the four major banks — KB Kookmin, Shinhan, Hana and Woori Bank — stood at 0.37% to 0.64% at the end of last month, up at all four from 0.28% to 0.35% at the end of last year. The deterioration was most pronounced in corporate lending, with delinquency rates on loans to small and medium-sized enterprises jumping to 0.53% to 0.92% from 0.39% to 0.52%, while one commercial bank's delinquency rate on loans to large companies surged to 0.90% from 0.02% in the wake of a workout at affiliates of Joongang Group. Household loan delinquency rates also rose across the board, to 0.29% to 0.35% from 0.27% to 0.28%. With the highest floating rates on mortgage loans at the four banks ranging from 5.82% to 6.02% as of the 23rd, observers say recent rate increases have yet to be fully reflected in delinquency figures.