Korean swaps are lower today,...........>

KOREA RATES: Korean swaps are lower today, retracing some of the modest rise

that was seen towards the back end of last week in lieu of the BOK's MonPol

decision. 

- 6-month swaps stand at 1.7100%, while 12-month swaps stand at 1.8288%. The

spread between the two has flattened by 1bp to 12.5bp, although the spread

remains close to 1-month highs as markets have become less confident re: a BOK

rate hike in 2018, but more confident that the Bank will tighten in 2019. 

- That said, the longer end of the curve continues to flatten reflecting the

increased likelihood that the BOK's hiking cycle will prove to be shallow. 

- PPI data, due Thursday, may give some indication on whether inflationary

pressures will provide the BOK with enough ammunition to push forward with a

rate hike. However, long-term breakeven inflation expectations point to subdued

price pressures, with the 7-Year metric currently 0.86%.