Spot USD/KRW Sub 1390, Global Equity Rebound May Help Local Stocks Today

Spot USD/KRW ended extended Monday trade near 1388.5, slightly down on end Friday levels (1390.65). The 1 month NDF ended at 1384.65 in NY trade on Monday, also slightly firmer in won terms. Whilst some higher beta FX faltered amid commodity price weakness, the won likely received some benefit from the better global equity tone.

• Spot USD/KRW remains wedged fairly close to recent highs above 1390. Given the 1390/1400 region has marked 2024 highs, we may see some resistance to a surge in USD momentum through these levels. Still, fresh yuan weakness, following yesterday's rate cuts, worked against the won, providing some offset to the firmer global equity backdrop.
• In US markets, the SOX surged 4%, although we remain comfortably off recent highs. The MSCI IT index rose 1.78% in Monday trade, its first gain in 5 sessions. Key tech earnings are coming into focus, which kick off Tuesday in the US (Tesla and Alphabet).
• For the Kospi, overnight Monday moves may provide some stability following the recent correction lower (-4.5% off mid July peaks). Offshore investors were net sellers of local equities, with -$191.2mn in net outflows on Monday (July to date remains positive though, +$1.56bn).
• On the data front, we have already had the June PPI, which rose to 2.5%y/y from 2.3% in June. This puts us back towards early 2023 levels, although 2022 cycle highs were at 10%y/y.
• Tomorrow, we get July consumer sentiment figures, then on Thursday advance Q2 GDP print.