USD/KRW: Export Data and FX Stability In Focus

Export data the early focus, leaders summit includes focus on FX stability.

• USD/KRW 1 month finished close to 1273.50 in NY at the end of last week, having spent much of the post Asian close pushing higher. We are opening a little better for the won in early trade, with 1 month back down to 1270.
• Equity market sentiment should be positive today though, US tech futures are are up by +1%, and we had positive momentum in Asian markets at the end of last week. This should help offset the indifferent lead from US markets during Friday's session, while the China Dragon Index also finished modestly lower.
• Offshore investors bought just over $239mn of Korean shares last Friday, bringing weekly net inflows to just under $350mn. This is the strongest net weekly inflow since March.
• The first 20 days of trade data for May showed headline showed exports up 24.1% in YoY. However, on a daily average basis, exports were up just 7.6% YoY terms. On Friday, Taiwan export order data also surprised on the downside (-5.5% YoY, versus +11.5% YoY expected and 16.8% YoY previously).
• The leaders summit between the US and South Korean Presidents concluded over the weekend. There were lots of discussions around closer military and economic cooperation. The other interesting development is the inclusion of foreign exchange market stability in the joint leaders statement. This has been a clear focus point for Korean authorities in recent weeks.