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Better buying on the cash open lacks momentum


Equities spill over into Bond and FX

KOREAN WON: USDKRW trades slightly higher today at 1,072.35, up 0.4% on the day.
The won's weakness was in line with the further widening of real interest rate
spreads between the US and Korea. 
- The gap between the USDKRW and where default-risk adjusted real bond yield
spreads between U.S. and Korea suggest is fair value remains around 9%,
suggesting USDKRW should be closer to 1,200 than 1,100. 
- With Korea`s 5-year CDS testing decade lows at 40bps there is little room for
reduced risk premiums to drive the won stronger suggesting that recent
consolidation in USDKRW will turn out to be a basing pattern.