Consumer Confidence Hits Highest Since 2018

The won strengthened at the open, USD/KRW gapping lower, last trading down 4.10 at 1122.80.

• Pre-market data showed that consumer confidence rose to 105.2 in May from 102.2 previously, the May print was the highest since June 2018. The uptick in sentiment was helped by a bumper GDP figure in Q1 as well as soaring exports. Households' inflation expectations for the next 12 months edged up to 2.2%, a two-year high. Their outlook for interest rates reached 118, the strongest since early 2019.
• South Korea reported 516 daily new coronavirus cases, below 600 for the third straight day Tuesday due to fewer tests over the weekend, but health authorities are concerned over rising infections outside the greater Seoul area. Elsewhere the ruling Democratic Party have recommended the government provide fully vaccinated people with incentives, such as exemptions from self-quarantine and the gatherings ban, in order to speed up the government's vaccine campaign
• Meanwhile, the Chinese ambassador Xi said that China is aware that part of a joint statement from last week's summit between South Korea and the United States is targeted at Beijing, though it made no mention of the country. "For instance, the Taiwan issue is an internal Chinese affair, but that was brought up. There exists no problem with the South China Sea as free transit is guaranteed. That's a matter involving China and its neighbouring countries," Xi said.