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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
KRW
1 month USD/KRW climbed above 1345 overnight but found selling interest above this level. We drifted slightly lower into the close (just under 1343). Note spot ended yesterday at 1339.70, so could still show a modest upside bias in early trading today.
- There is another negative lead for onshore equities today, given broad based falls in major markets overnight. Tech underperformed again, the SOX down 3.72%, the MSCI IT 2.74%.
- Arguably though the won turned weaker prior to this fresh round of risk aversion in equities, so there may be less catch up from this standpoint.
- Offshore investors continue to add to local equities, +$121.8mn yesterday, while net outflows were seen from Taiwan (-$564.6mn). There has been a noticeable divergence between net flows between the two economies in recent months, with South Korea outperforming Taiwan.
- Note late yesterday Taiwan export order figures disappointed on the downside, -1.9% YoY for July, versus +6.2% YoY expected. This is a similar theme from the South Korea first 20 days export figures from yesterday.
- Still, with higher USD/CNH levels, dips may still be supported in USD/KRW in the near term. Moves back to earlier highs/resistance points, just under 1330, may generate USD support.
- Earlier, South Korean consumer sentiment rose to 88.8 from 86.0 last month, see the chart below. Encouragingly, consumer inflation expectations eased to 4.3% from 4.7% in July. This is the first drop in 8 months.
- Coming up later is Q2 household borrowing figures.
Fig 1: USD/KRW (inverted) & Korean Consumer Sentiment
Source: MNI/Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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