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Korean interest rate swaps receives a...>

KOREA RATES
KOREA RATES: Korean interest rate swaps receives a boost from stronger than
expected inflation figures out of Korea today, with headline CPI rising to 1.9%
y/y in Sep from 1.6% in Aug and core rising to 1.2% y/y in Sep vs 1.0% in Aug. 
- This has seen the curve shift higher with the 2-year breaking above its
200-dma to trade at 2.0050%. With breakeven inflation expectations rising,
though, hitting a new 4-year high yesterday at 1.22%, real rates are not seeing
much upside, supporting our conviction that the BOK will have to strike a more
hawkish stance just to prevent the won from weakening due to falling real
yields. 
- The BOK next meets on Oct 18. A hike is not expected but risks are to the
upside. 

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