The relief for the won has proven to be short lived. Onshore USD/KRW couldn't hold opening levels sub 1430 and dips below this level are being supported. The pair was last at 1433. Broader USD gains are weighing, while the 1 month NDF is +0.70% on NY closing levels.
- The Kospi is higher, up +1.55% so far, back above 2200 in levels terms.
- From the earlier BoK manufacturing survey it showed a fresh deterioration in the profit outlook. The index is not too far away from recent cyclical lows recorded in August, see the chart below, where we overlay this index against the Kospi.
- The deterioration does imply further downside in the Kospi, although the historical correlation between the two series is far from perfect.
- The headline manufacturing index slipped further as well, to 75 from 82, but we are well above 2020 lows (just under 50), while sentiment in the non-manufacturing sector generally stayed at more elevated levels.
Fig 1: Kospi & Manufacturing Sentiment - Profit Forecast
Source: BoK/MNI - Market News/Bloomberg