Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
KRW
1 month USD/KRW tested sub 1330 in the first part of trade, but remains supported on dips, last near 1331 (earlier lows were at 1331).
- There is a reasonable wedge between 1 month NDF levels and onshore equity trends. The chart below plots the 1 month NDF (which is inverted on the chart) against the Kospi.
- Local equities are looking to break to fresh multi year highs. Optimism around tech is helping and the authorities have promised to help unlock valuations for onshore markets (the so-called "Korean Discount").
- Working the other way against the KRW has been a generally positive USD trend since the start of the year. Fed easing expectations have been pared back, while SK-US 2yr government bond yield spreads sit 30bps below earlier Jan highs, back close to -120bps.
- The BoK meets later this week, with the firm consensus of no change expected (3.50%). With a discount to US policy rates/US Tsy yields remaining evident, we may see the divergence with equity trends persist until the Fed outlook turns more definitely dovish.
- USD/CNY trends will also be in focus, along with China stocks and underlying economic trends.
Fig 1: USD/KRW 1 Month NDF (Inverted) Versus Kospi Trends
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok