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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
KRW
South Korea's April CPI beat expectations, raising the pressure on the BoK to contain rising costs of living. Headline inflation accelerated to +4.8% Y/Y, hitting over 13-year high, while consensus was looking for a +4.4% print, with estimates ranging from +4.2% to +4.7%. Core prices also grew faster, at the rate of +3.6% Y/Y.
- South Korea's inflation keeps surprising to the topside, as evidence on the chart below, which shows the rolling 6-month sum of the difference between actual readings and consensus forecasts.
- Per BBG MIPR tool, there is another full 25bp rate hike priced in for the next three months, with the central bank seen having some more work to do. In the meantime, the BoK will publish the minutes from its April monetary policy meeting today.
- Meanwhile, South Korea's PM nominee Han pledged to use every policy tool at his disposal to stabilise the economy for ordinary people, while his Finance Minister in waiting proposed to delay the introduction of a 20% capital gains tax on financial investments planned for next year. Worth noting that President-elect Yoon's team will unveil its 110 key policy tasks today.
- Spot USD/KRW trades at KRW1,267.90, up 2.45 figs on the day, despite the inflation beat. Bulls look to a move through Apr 28 high of KRW1,273.95, while bears would be pleased by sales past Apr 29 low of KRW1,255.25.
- USD/KRW 1-month NDF last seen at KRW1,267.88, with topside focus on Apr 28 cycle high of KRW1,277.09. Bears keep an eye on Apr 29 low of KRW1,254.92.
Fig. 1: South Korean CPI Y/Y Inflation Surprise - Actual Less Consensus
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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