Won Has Best 2-Day Gain Since Mid March

Spot KRW is up 1.35% from closing levels last week. Today's gain plus that on Friday is a cumulative +2.25%, the best 2-day gain for the currency since mid-March in spot terms.

• Spot USD/KRW is also now comfortably below its 50-day MA (1245.8) for the first time since late February.
• The won's sensitivity to broader equity market sentiment has been very much on display today.
• On Wednesday, Korea trade figures are due for May, with the market looking for export growth to improve to 18.4% YoY (from 12.9% previously), with a resumption of activity at Shanghai ports seen as an important driver of this rebound. This would halt a 2-month downtrend in export YoY momentum.
• Today's data on retail sales and department store sales is largely second tier, but showed solid growth in April (+10.6% for retail sales).
• The government also announced it will impose a zero import tariff on 7 major food items until the end of this year to ease inflationary pressures. Items include cooking oil and pork.