The BOK's decision to hold rates at 1.50%.....>

KOREA: The BOK's decision to hold rates at 1.50% was in line with expectations,

as were the details of the statement and the accompanying press conference.

USDKRW has thus not shown much of a reaction to the news with the pair

responding mainly to global FX forces.

- USDKRW trades at 1112.7, falling from its opening high of 1115.7, remaining

below neckline resistance. 

- Markets and economists continue to expect a rate hike in Q4 but this is

becoming less likely in our view as the BOK continues to note the weak labour

market and global trade risks.

- Korean swaps are down slightly on the day after an early spike higher, with

the curve continuing to flatten as markets price out future rate hikes. 

- The combination of declining real yield spreads with the US and increasing

fiscal spending puts the won at risk.