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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.
KRW
1 month USD/KRW spent most of the post-Asia close drifting lower. We ended NY at 1261.6, which is not too far away from recent lows. Broadly softer USD sentiment offset continued tech equity weakness.
- The early focus will be on market reaction to the North Korea missile tests. Today's tests are a step-up in provocation and no doubt are designed to coincide with Biden's trip the region.
- Missile tests have been fairly prevalent this year though and are likely to remain part of the geopolitical landscape. Any impact on Korean asset sentiment has been limited and we would expect this to remain the case.
- Equities should remain a more important driver. The won outperformed weaker tech sentiment post the Asia close (see the chart below). The SOX index finished down, off 2.46%, while the MSCI IT index fell by 1.85%. Both indices are back close to recent lows.
- Offshore equity outflows continue, yesterday saw -$283mn, which is the largest daily outflow since early May.
- Still, Nasdaq equity futures are tracking higher in early trade today, so that may help limit some of the fallout. Broadly weaker USD sentiment has also helped keep a lid on USD/KRW.
- Earlier, Korea manufacturing and manufacturing sentiment printed. Manufacturing eased back to 87 from 88, while non-manufacturing rose to 86 from 85.
- The BoK decision is due tomorrow, with a 25bps hike widely expected. Our full preview will be out later today.
Fig 1: USD/KRW & MSCI Information Technology Index
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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