South Korea Considers Bond Market Stabilisation Steps, Cutting Fuel Taxes

Spot USD/KRW deals +1.55 fig at KRW1,211.15, holding the prior trading day's range. Bulls look to a push through Mar 28 high of KRW1,227.30 before targeting Mar 15 cycle high of KRW1,244.00. Bears would be pleased by a fall through the 50-DMA at KRW1,207.14, which would expose the 100-DMA at KRW1,196.59.

• USD/KRW 1-month NDF last seen +1.05 fig at KRW1,211.88. Bulls keep an eye on Mar 28 high of KRW1,228.45, while bears look for sales past the 50-DMA at KRW1,209.50 towards the 100-DMA at KRW1,198.84.
• FinMin Hong warned that heightened external uncertainties may hurt corporate sentiment, while short-term volatilities may affect large-scale investment, adding that the spread of Omicron coronavirus variant continues to weigh on the recovery in consumption.
• Elsewhere, the FinMin noted that the government will actively consider steps to stabilise the bond market in case of excessive fluctuations in interest rates. Stabilisation steps might include adjustments to treasury bond volume.
• In addition, Mr Hong said that the government will consider further cutting fuel taxes amid mounting inflationary pressure amplified by higher energy costs. Officials are looking into trimming fuel taxes by 30% from the current rate of 20%.
• South Korea's industrial output grew 6.5% Y/Y in February, building on January's 4.2% expansion and smashing consensus forecast of +4.5%.
• Reminder that monthly trade data and S&P Global M'fing PMI will be out tomorrow.