South Korea's seasonally adjusted........>

KOREAN WON: South Korea's seasonally adjusted unemployment rate rose to 4.0% in

March, from 3.6% in February. The unemployment rate for young adults (19-25)

rose to 11.6%. President Moon Jae-in has called for re-doubled efforts to create

new jobs for young people, introducing the risk of additional fiscal spending in

pursuit of job gains.

- While unemployment figures tend to be lagging indicators of economic activity,

the BoK pays close attention to them when setting monetary policy. The BoK hiked

rates in November 2017 but pointed to the weakening employment picture as reason

to expect the hiking cycle to be gradual.

- USDKRW continues to trade in a tight and contracting range within a broader

downtrend despite the US's increasingly superior interest rate advantage. US

2-year bonds yield 25bps more than Korea's, the widest spread since 2006, with

expectations re: BoK tightening continuing to decline.

- We continue to see the KRW as relatively attractive among Asian FX, but note

that the region's currencies are increasingly at risk from the ongoing monetary

tightening in the US