Net Equity Inflow Momentum May Slow

1 month USD/KRW is back above 1300. The pair spiked towards 1305 post the US payrolls print on Friday. Prior to this we got close to the 50-day MA on the downside at just under 1293. In early trade today we are fairly steady around 1303, near NY closing levels from Friday. Spot is back above 1304, around 0.5% weaker versus closing levels onshore from the end of last week.

• Not surprisingly, the Kospi is down to start this week, off 0.3-0.4% so far. This follows tech underperformance on Friday night (SOX -0.90%, MSCI IT -0.30%), as US yields spiked.
• Note last week, net equity inflows in South Korea were $1.282bn from offshore investors (Friday saw +$331.9mn in net inflows). This is the strongest week of net inflows going back to December of last year. Some slowdown might be expected this week on the basis of higher US yields and the resurgent USD.
• Such a backdrop could keep dips in USD/KRW towards the 1295/low 1290 region well supported. On the topside, moves to 1315 will be eyed.
• The domestic data calendar is quiet today. The South Korean Finance Minister stated that the policy priority is on stabilizing prices in earlier comments.
• Also note that South Korea has indicated that to the US it will join a preliminary meeting of chipmaking countries. The meeting is scheduled to take place towards the end of August/early September. South Korea hasn't indicated it will formally join the alliance though. The US, Taiwan and Japan will be the other countries at the preliminary meeting.