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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
Post the Asia close, 1 month USD/KRW couldn't extend gains beyond the 1350 level. We dipped back to around 1345 by the NY close. Note onshore spot ended yesterday at 1350.40, so there could be some downside bias at the start of today's onshore session.
- USD/KRW followed the broad DXY trend overnight, with continued weakness in equities not impacting the FX a great deal. Tech sentiment was again more downbeat than broader bourses. The SOX dipped a further -1.93%, while the MSCI IT lost -1.51%.
- To recap, the Kospi shed over 2% yesterday, although we didn't see large net outflows by offshore investors. There was actually a small net inflow (+$10.9mn), in contrast to -$851mn in outflows from Taiwan.
- In any event, the won is already trading at levels consistent with equities back at their July lows, see the chart below.
- The data calendar is devoid of major releases today. We are still awaiting July retail sales figures, but these are typically not a market mover. Tomorrow IP figures for July are out (the market expects a -0.8% dip, versus the +1.9% gain in June).
- Note the South Korean government will hold a cabinet meeting (10am local time) to decide on the 2023 budget proposal. The Finance Ministry has already flagged spending will be cut next year, the first drop in 13 years.
Fig 1: USD/KRW & Local Equities
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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