CPI Prints Multi-Decade Highs, But Mostly In Line With Expectations ​​​

South Korea CPI printed close to expectations, 0.5% for MoM (versus 0.4% expected), while the YoY pace was 6.3%, in line with market expectations. The core print came in at 4.5% YoY, also in line with market forecasts.

• Whilst headline inflation is at multi-decade highs, it is the first in line with expectations outcome since December of last year. For the first 6 months of this year the YoY prints had all come in stronger than market expectations (by an average of 0.22ppts).
• Core momentum edged higher from 4.4% last month, but we remain below the late 2008 highs of +5.5% for now.
• The next BoK meeting is on the 25th of August and the central bank is expected to hike again, although comments yesterday from Governor Rhee indicate a 25bps move is likely to be preferred to another 50bps hike.
• We may have needed to see a further sharp upside surprise on inflation today to make the case for a 50bps move. The Korean authorities have stated inflation is expected to remain above 6% for a number of months.
• Note the BoK minutes are also out today from the last policy meeting.