Concern Over Potential Fourth Wave

The won is weaker in early trade, USD/KRW advancing after a stronger-than-expected jump in March payrolls, the gain of 916k was the most in seven months, and came alongside an upward revision to the February data.

• A report from the Korea Institute of Public Finance has shown household debt-to-GDP ratio stood at 98.6% as of the end of June last year, well above the global average of 75.3% for advanced economies. The institute voiced concern that a rapid rise in interest rates could sharply hike household debt burdens, which may have an impact on the local economy.
• Data earlier showed South Korea's March foreign reserves fell slightly to KRW 445.13bn from KRW 447.56bn, USD/KRW rose 0.75% during the month.
• Elsewhere, China and South Korea have agreed to hold fresh talks on security and have discussed a possible visit by President Xi Jinping as the two sides continued efforts to rebuild their relationships following the 2016 row about a US missile system that seriously harmed ties. China has said it hopes the two sides can co-operate on a number of deals including North Korea, trade and technology.
• New coronavirus cases remain elevated, 543 cases were reported on Sunday – above 500 for the fifth straight day. With the pandemic showing no signs of slowing down, the KDCA said it is considering a ban on gatherings in business entities that have violated quarantine measures and reported a series of infections. The health agency said it also is considering restrictions on their business operations to stem the spread of the pandemic.
• South Korean listed firms saw their net profit increase nearly 20% last year despite the fallout from the pandemic, Korea Exchange reported. The combined annual net income of 694 KOSPI-listed companies, excluding financial firms, rose 18.15% according to the bourse operator.