Economy Slows Amid Fourth Wave

Data earlier showed industrial output fell 0.7% M/M against a rise of 0.3% expected the print means that industrial output, retail sales and investment declined in August, the first time since May that all the metrics declined together. The figures are the latest sign that economic recovery momentum slowed amid the fourth wave of the pandemic. The statistics agency said: "Recovery momentum tapered, led by face-to-face service segments, amid the COVID-19 pandemic and due to July's higher base". Other data showed sentiment among manufacturers fell to 93 from 96, while non-manufacturers sentiment stayed at 81.

• On the coronavirus front there were 2,564 new cases in the past 24 hours. Daily cases have stayed over 1,000 for the last 86 days despite the country having implemented the toughest virus curbs to slow down the nationwide spread. Health authorities warned the peak of the fourth wave of the pandemic has yet to come. "It is difficult to predict whether the virus curve will flatten or not, but it is certain new cases will increase down the road."
• In geopolitics North Korean leader Kim Jong-un said yesterday that cross-border communication lines with South Korea will be restored in early October as part of efforts to improve relations but warned that it is entirely up to Seoul to cement the relationship further down the road.
• Elsewhere Park Ki Young, an economics professor at Yonsei University, has been put forward as a BoK board member to replace the outgoing Koh Seung-beom who became chairman of Financial Services Commission. Koh was a hawk on the board and dissented at the July on hold announcement on the basis of financial stability risks. According to a BoK press release "Park's recent work touches on climate change, text-mining, which are of interest to the bank, as well research into policy ideas. He has also analysed the bank's minutes from policy meetings using data mining and has researched household debt, among others."