USD/KRW Threatening To Break Higher On Equity Jitters

1 month USD/KRW got to a high of 1317 in late NY trading. Since mid July the 1315/16 region has acted as resistance zone in the pair. The 1 month settled back around 1315 into the close and we are slightly lower in early trade today. Note mid July highs in the 1 month NDF came in just under 1330. Onshore spot is at 1315 currently, around 0.30-0.35% above yesterday closing levels.

• Weaker equity sentiment is evident onshore today, with the Kospi down a further -1.0% so far, following yesterday's -0.67% dip. Today's weakness is in line with weaker offshore leads, with tech generally underperforming overnight amid higher core yields (-2.48% for the SOX, -0.90% for the MSCI IT).
• Offshore investors were still net buyers of onshore equities yesterday, at +$25.7mn, but the rate of inflows has certainly moderated over the past week or so.
• The onshore focus today rests with 2Q short-term external debt figures, which is typically not a market mover.
• Also note that the Finance Minister, Choo Kyung-ho attends a conference on fiscal rules at 2pm local time. The Finance Ministry also releases its monthly fiscal report at 10am local time. There could be more focus on these events given recent comments from the Finance Ministry around curbing fiscal spending in 2023.