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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.
SOUTH KOREA
Jan CPI was a touch below expectations. The m/m was 0.4%, same as BBG consensus and versus a flat outcome in Dec. In y/y terms we were 2.8%, versus 2.9% expected and 3.2% prior. The core, ex food & energy metric was 2.5% y/y, versus 2.7% forecast and 2.8% prior.
- The chart below plots headline and core CPI y/y trends. After a brief blip higher in headline pressures in Q3 last year, we have resumed the downtrend in both metrics.
- In terms of the detail for Jan: in m/m terms drags came from transport (-0.8%) and furnishings (-0.2%). Health (+1.1%) and food (+1.4%) and miscellaneous goods & services (2.4%) were the main positives.
- In y/y terms 9 out of 12 categories saw weaker y/y momentum for Jan relative to Dec. 2 were unchanged and only 1 saw a y/y pick up.
- The South Korean FinMin noted after the release that inflation might rebound to around 3% in Feb/Mar (Rtrs).
- BoK Governor Rhee also noted yesterday that the central bank needs to keep a restrictive stance for a long time to bring inflation down. Hence, this print, while showing an encouraging trend, is unlikely to prompt a policy pivot in the near term.
- Note the next BoK meeting is on Feb 22.
Fig 1: South Korea Headline & Core Inflation Y/Y
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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