Little Follow Through For USD/KRW Downside

Spot USD/KRW has moved back below 1300 but found support around 1297. We are now little changed on the day at 1299.7.

• The better China non-manufacturing PMI print aided sentiment, but onshore equities are still down by 1.6%.
• Offshore investors continue to sell local equities, with a further $300mn in net outflows today. This brings net outflows for the week to $604mn, and the month to just under $4.8bn.
• There was no official pushback on won volatility/weakness, but Reuters reported that the National Pension Service has sold a small amount of USDs in the forward market this month, for the first time since early 2020. Some sell-side analysts have noted this was an option being discussed to stem the won's depreciation.
• Earlier, better than expected IP data didn't shift sentiment, while the government stated there would be a 5% increase in the minimum wage next year.
• Note tomorrow June export figures print. The market looks for a sharp slowing in export growth to 3.8% YoY from 21.3% in May. Import growth is expected to remain elevated at 22.0% (from 32%), leaving a wider trade deficit at -4315mn expected (-$1710mn previously).