Market Digest Hawkish BoK Minutes

The won is weaker, having gapped higher at the open on a higher greenback USD/KRW has since retraced some of the move – the pair last up 0.90 at 1117.90.

• Following the release of the BoK May meeting minutes late yesterday many sell side analysts have bought forward hike calls. The minutes showed four out of the six monetary policy board members said it was appropriate to think about potential timing to adjust the degree of monetary easing. Timings of rate hikes have now been bought forward to Q4 2021 from Q1 2022, Citi expects a hike as soon as October 2021.
• JP Morgan says: "In line with the hawkish May MPC communication and BoK officials' follow-up comments last week to hint on rate normalization in the near-term, the May meeting minutes clearly indicated that the overall MPC stance has tilted hawkish. The members broadly shared a view that the outlook on GDP growth and inflation has been materially upgraded and the risk bias remains positive; while concern over financial imbalances has been enlarged from acceleration in leverages with yield-seeking behaviors."