May 19, 2022 23:45 GMT
1 month USD/KRW dropped sharply post the Asia-close. We fell to the low 1260 region, levels not seen since early May, after touching as high as 1280. We closed just above 1264 in NY. Note that spot closed yesterday at 1277.30.
- A broadly weaker USD, following softer data outcomes and lower UST yields, were the main drivers of the won rebound.
- Tech stocks remained weak, although falls were not as sharp as the previous session. The SOX index edged down a further 0.61%, while the MSCI IT index shed 0.77%. The decline in the VIX likely helped at the margin, while Nasdaq futures are higher in early trade today. China's Golden Dragon index also rebounded 3.2%.
- The Kospi and Kasdaq both finished weaker yesterday. We saw modest net equity outflows from offshore investors, -63mn, bringing net flows for the week down to +108.4mn.
- Earlier today the PPI for April printed, showing a further pick up in YoY momentum to 9.2% (from a revised 9.0% rise in the previous month). The MoM showed some slowing to 1.1%, versus 1.5% in March. Still, the YoY pace remains close to cyclical highs. The Vice Finance Minister noted that the 'grave inflation situation may continue for a while'.
- There is no other domestic data, but a reminder that US President Biden is set to arrive in South Korea today and will depart on Sunday.