CPI Above BoK Target For Third Month

Won is stronger in early trade, USD/KRW dipped quickly to session lows on the open before bouncing back, the rate last changing hands at 1149.90, down 1.10 on the session.

• Data earlier showed CPI rose above estimates, and above the Bank of Korea's 2% target for the third month in a row. Core CPI rose 1.7% Y/Y, above the 1.5% estimates while headline CPI rose 2.6% against a 2.4% consensus. The pickup in inflation was attributed largely to last year's low base, and the tight supply of farm and livestock products, while high oil prices were also adduced.
• On the coronavirus front there were 1,202 new cases in the past 24 hours, in the 1,200's for the second day in a row and down significantly from peaks. Authorities warn that the fourth wave of the pandemic is far from being under control and have warned they could impose tougher measures should the number of daily cases continue to rise throughout this week.
• Elsewhere Finance Minister Hong said that the government plans to provide over 90% of pandemic relief funds created under the latest extra budget to recipients by end-September. Under the KRW 34.9tn extra budget passed last month KRW 11tn of handouts will go directly to citizens.