South Korea Tightens Social Distancing Measures, Parliament Approves Budget 2022

South Korea's daily Covid-19 cases stayed below 5,000 today but critical cases hit another all-time high, fuelling concerns about the current wave of infections. PM Kim outlined tighter social distancing measures in a reversal of earlier plans to move towards "living with Covid-19." The tightened rules involve a lower cap on private gatherings.

• Lawmakers approved the KRW607.7tn 2022 budget in a delayed vote today. The final bill includes slightly more generous spending compared to the first draft, as parliament agreed to extend additional support measures for small firms and individuals affected by the pandemic.
• Elsewhere, Vice FinMin Lee pledged that the gov't will take steps to curb excessive inflation expectations. Lee added that inflation uncertainty has increased.
• Spot USD/KRW trades at KRW1,176.70, barely changed on the day. A break above Nov 29 high of KRW1,195.70 would shift focus to Oct 12 high of KRW1,200.35. Conversely, a dip through Dec 2 low of KRW1,175.50 would open up the 100-DMA at KRW1,170.26.
• USD/KRW 1-month NDF last seen at KRW1,177.30. Bears see the 100-DMA at KRW1,173.30 as their initial target, while bulls look to a move through Nov 26 high of KRW1,198.18.
• South Korea's data docket next week is headlined by monthly BoP current account balance, due Tuesday.