We Will Consolidate After The Recent Strong Run?

1 month USD/KRW continued to trade lower post the Asia close, we got to the 1236 handle. These were levels last seen on April 21.

• To recap, spot KRW has had its best 2-day run since mid-April. The cumulative gains in the past two sessions are just under 2.30%.
• We wouldn’t be surprised to see some consolidation following such a strong rally in the won. Early sentiment in equities is a little less buoyant with US futures coming off recent highs. The EU has unveiled its latest sanctions on Russia, which focus on oil import curbs for the reigon and de-Swifting some Russian banks.
• Yesterday, regional equity sentiment was quite buoyant though, with the Kospi at +1.2%. We saw +$361mn in net equity inflows yesterday. The strongest daily pace since late March.
• Earlier, South Korean industrial production figures showed a sharp contraction in the MoM print. It was down -3.3%, the steepest drop since 2020 and below -1.2% expectations. The YoY print held up well though at +3.3% versus +3.2% expected. The cyclical leading index came in at -0.3, the same as last month.
• China official PMIs are also due out later.