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USDKRW is breaking out of key downtrend.......>

KOREA
KOREA: USDKRW is breaking out of key downtrend resistance at 1128 which marks
the triangle top from the Oct 30 high. A close above 1128.0 would shift the
outlook bullish and mark a continuation of the pair's shift back towards levels
more in line with CDS-adjusted real yield spreads between the US and Korea,
which remains near cycle highs. 
- Rate markets has added to recent gains with the 10 year swap breaking above
resistance to trigger an inverse head and shoulders pattern. However the gap
relative to the US remains extreme suggesting further upside in yields may not
stem won weakness. 
- GDP data and PPI are out tomorrow ahead of Thursday's mon pol decision. We see
potential for the BOK to strike a neutral tone and note an improvement in
financial market conditions which could trigger a further back up in rates. 

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