1 Month Edges Back Towards 1350, Onshore Markets Closed Today For Elections

1 month USD/KRW edged lower post the Asia close on Tuesday. We ended the NY session at 1350.50, a won gain of 0.13%. Note onshore spot ended yesterday at 1354.95. Onshore markets are closed today on account of the general assembly elections.

• South Korean asset markets are unlikely to be too impacted by the outcome of the general assembly election. If President Yoon's PPP can't regain a parliamentary majority it may cool Yoon's reform proposals.
• The biggest potential impact may rest with local equities, as the government's 'value up' program which aims to close the valuation discrepancy between South Korea stocks and other major indices, may lose some momentum. This could impact KRW via reduced offshore equity inflows but the won has not benefited from positive inflows in the past month. For the BoK, the near-term bias is steady rates, which is unlikely to be altered by the election outcome. See this link for more details.
• For the 1 month NDF, recent highs around 1355 remain intact. On the downside, the 20-day EMA continues to trend higher and was last above 1343.
• Yesterday saw $211.7mn in net equity inflows, bringing April to date inflows to near $1.4bn. The Kospi finished lower though, back near the 2705 level.